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Carriers to invest more in infrastructure in 2013

Telecom infrastructure spending is projected to bounce back in the year ahead, with investment in North America and Asia driving growth. Infonetics Research is projecting worldwide growth of roughly 4%, as even operators that have been delaying investments finally start spending. “Service providers have no choice but to invest in their networks now; some have been restricting capex for so many years that they are experiencing network outages, unable to handle exploding traffic,” said Infonetics analyst Stéphane Téral.

Infonetics projects that carrier spending on every type of telecom equipment except optical and TDM voice will be up in 2013, and that capital expenditures will focus on fiber-based wireline broadband, 2G mobile network capacity expansion, 2G migration to 3G, and migration to LTE projects through 2015.

2012 has been a year that many infrastructure providers “would rather just forget,” said Daryl Raiford, CFO of Genband. “Now everyone is waiting to see what 2013 has in store for us.” Raiford thinks that small cells and small cell backhaul will be a focus for 2013 infrastructure spending, as will semiconductor solutions that can increase bandwidth. Raiford also noted that late last year infrastructure spending was projected to increase about 4% for 2012, but in reality spending turned out to be down.

The outlook brightened last month when AT&T announced Project Velocity IP, a $14 billion investment in network infrastructure planned for the next 3 years. Then Deutsche Telekom said it would invest almost $40 billion over the next 3 years, with much of that investment slated for its T-Mobile USA unit and for MetroPCS, which is merging with T-Mobile USA. Verizon Wireless has not released a dollar amount for its planned investment next year, but has outlined the areas that it will prioritize.

Competitive carriers should also account for a significant portion of capital investment in the year ahead. Infonetics says that in 2012, independent wireless operators bucked the downward trend, increasing their capital expenditures by 12%.

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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