Telecom CAPEX to Grow 3% in 2014

In a recently published carrier economics report conducted by the Dell’Oro Group, it was found that telecom CAPEX will grow around 3% in 2014, but it’s expected to decline $6 billion in 2015. “While we maintain our view that worldwide CAPEX will grow around 3% in 2014, we believe multiple factors will contribute to a decline in CAPEX during 2015,” said Stefan Pongratz, Dell’Oro Group’s Carrier Economics analyst. “Higher device penetration, decelerating mobile data growth rates, lack of new revenue streams, and increased competition in both the developing and developed markets have caused worldwide revenue growth to decelerate in the last couple of years. Slower growth in service revenues coupled with the rapid network progress during 2014 in China, North America, Japan, and Europe will also put some pressure on worldwide CAPEX upside in 2015,” continued Pongratz. Other highlights in the report include, “The amount of mobile CAPEXrequired to support incremental mobile data usage has declined more than 50% per year since the smartphone boom started. Fiber and LTE coverage build-outs will continue to drive telecom equipment investments in 2H14 and 2015. The proportion of CAPEX that will be allocated to new technology enablers and network topologies including NFV and small cells is expected to be negligible over the next six quarters.”