* Increase driven by significant investments from Cingular, Sprint, Verizon and AT&T
Publicly owned service providers in North America spent just under $63 billion on capital expenditures in 2005, an increase of 8% from 2004, according to data from Infonetics Research.
These service providers are projected to increase capex 4% in 2006, to more than $65 billion, according to Infonetics.
The increase from 2004 to 2005 was driven by significant investments made by Cingular, whose capex jumped 117%, and by Sprint, Verizon and AT&T. More investments were made in wireless equipment than wireline, but spending is up on both, the firm reports.
Of the capex going to telecom and datacom equipment, the top three investment areas are voice, mobile RAN, and optical equipment. Voice network spending is generally trending up in dollars and as a percentage of capex due to increased spending on broadband, next-gen voice, wireless networks, and the move to IP/MPLS/Ethernet networks, Infonetics states.
The capex-to-revenue ratio was 17% in North America. The recent wave of consolidation among ILECs will result in 56% of total capex owned by just AT&T and Verizon in 2006, according to the firm.
Infonetics also found that the combined revenue of all public North American carriers inched up 2% in 2005 to $398 billion, and is expected to top $408 billion in 2006. Also of note is that, between the fourth quarters of 2004 and 2005, mobile subscribers increased 12% to 184 million; DSL subscribers increased 36% to 22 million; and cable Internet subscribers increased 21% to 26 million.
RBOCs, IXCs, MSOs, Canadian ILECs, IOCs and wireless carriers all increased their capex in 2005, while CLECs and ISPs decreased their capex “fairly significantly,” according to Infonetics. RBOCs will increase their capex in 2006 by about 18%, mostly on IP/MPLS routers, optical equipment, voice equipment, broadband aggregation equipment, and mobile RAN, the firm states.
