Global telco capex to remain flat to 2019
Source: View: 256 Date: 2014-04-16

Annual global operator capex will remain broadly flat between 2014 and 2019, predicted Ovum on Tuesday.

According to the research firm, the world’s telcos spent $346 billion in 2013; by 2019 that figure will have edged up to around $367 billion. In total, Ovum expects communication service provider capex to come in at $2.1 trillion in the 2014-2019 period.

Looking geographically, Ovum expects the U.S. will account for the single largest share of global CSP capex during the forecast period. China and Japan will come in second and third respectively (see chart).

Flat spending has the potential to make life tougher for telecom vendors too. This is compounded by the emergence of software-defined networking (SDN) and network functions virtualisation (NFV), which puts them in competition with IT vendors. However, with more companies besides telcos investing in network infrastructure, the vendors’ addressable market is expanding to include a new and diverse array of customers, such as digital media companies and Internet players.

"The telecom world is changing. Established market boundaries are falling by the wayside," said Matt Walker, principal analyst, network infrastructure, at Ovum.

"Despite flattish CSP capex, there is a new sector of companies building network infrastructure, partially offsetting the CSP weakness," he said, in a research note. "To profit from this digital media growth though, vendors will need strengths in both telecom/hardware and IT/software, and [will need to] learn to serve this new customer type."

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