CAMBRIDGE, Mass.—Carriers are spending less on their network deployments thanks to increasingly inexpensive equipment, according to a new report from Pyramid Research.
Carriers’ operating and capital expenses are declining in part due to pricing wars sparked by low-cost infrastructure players like Huawei Technologies Co. Ltd. and others. And carriers themselves are helping to drive down costs with huge equipment purchases.
Specifically, the firm said telecom equipment costs have dropped by nearly 20 percent annually over the past four to five years.
Pyramid Research pointed out several key trends within this trend:
c Carrier consolidation has helped increase carriers’ buying power. Indeed, cost savings from joint procurement deals are often put forward as justifications for mergers and acquisitions. And massive carriers, such as those in India and China, generate enough volumes to influence market prices.
c Low-cost equipment suppliers like Huawei are helping to drive down prices. Indeed, some carriers seek out Huawei’s participation in order to make sure that other manufacturers will make competitive proposals.
