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Managing Editor

Stable spending

Mar 23, 20041 min

* Firm finds that severe cuts in capex are behind us

North American service providers’ capital expenditures totaled $48.2 billion in 2003, 22% less than in 2002, according to Infonetics Research.

The new numbers represent a revenue-to-capex percentage of 14.3%. Multicable system operators (MSO)will continue significant capex cutting this year, but other segments will be plus or minus a few percentage points, resulting in a total reduction of just 2% between 2003 and 2004, from $48.2 billion to $47.4 billion, the firm notes.

“The severe aggregate capex cuts are behind us, and service providers are transitioning capital budgets to next-generation technologies to introduce new service offerings and promote revenue growth,” states Infonetics analyst Kevin Mitchell.

Forty-four percent of the $48.2 billion spent by public wireline service providers in North America in 2003 was on telecom and datacom equipment, such as access aggregation equipment, CPE, ATM/frame relay switches, IP/MPLS routers, optical equipment, voice equipment, and Layer 2/Layer 3 switches and servers. Key requirements for these purchases were support of 11.4 million DSL subscribers and 16.7 million cable Internet subscribers.

Infonetics also found that there were just under 200 million access lines in service as of the fourth quarter of 2003.

Service providers tracked in the report include Canadian ILECs, RBOCs, CLECs, IOCs, IXCs, ISPs, and MSOs headquartered in North America.

Managing Editor

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at

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