2005 North American telecom carrier capex to grow 5% to $61B, says report
April 11, 2005 Boston, MA -- North American service providers' capital expenditures were just under $58 billion in 2004, an increase of a fraction of a percent from 2003, and are projected to increase 5% to $61 billion in 2005, according to a report from Infonetics Research, an international market research and consulting firm covering the data networking and telecommunications industries.
"We saw some meaningful changes in the North American capex environment in 2004, with aggregate spending holding steady after three years of drastic cuts, and ILECs increasing their investments," explains Kevin Mitchell, directing analyst for Infonetics Research. "Another noteworthy trend is how fast mobile subscribers are closing in on access lines, with mobile subscribers now at 90% of PSTN lines, up from 77% at the close of 2003. North American mobile subscribers grew 13% between 4Q03 and 4Q04, from 145 million to 164.3 million."
The report's highlights include:
* DSL subscribers increased 44% between 4Q03 and 4Q04 to 16.5 million.
* Cable Internet subscribers increased 27% between 4Q03 and 4Q04 to 21.4 million.
* RBOCs and Canadian ILECs increased their capex in 2004 and will increase it again in 2005, particularly on IP/MPLS routers.
* Cable companies decreased their capex between 2003 and 2004, but will increase spending a bit in 2005, mostly on voice equipment and IP/MPLS routers.
* Broadband lines equaled 21% of access lines in North America.
* North American carrier revenue is projected to be flat in 2005 after inching up in 2004.
"We could easily see mobile overtake access lines in 2005," concludes Mitchell.
The firm notes that its projection from one year ago was only 4% lower than actual results for 2004 capex, and only 1% lower than actual revenue.
The firm's biannual "Service Provider Capex Analysis, North America" report tracks North American public mobile carriers and wireline service providers, including Canadian ILECs, RBOCs, CLECs, IOCs, IXCs, ISPs, and MSOs. The report presents revenue, capital expenditures, and capital expenditure-to-revenue ratios by individual service provider and by service provider type.
Capital expenditures per provider type are presented in eight categories: access aggregation equipment, CPE, multi-service switches, IP/MPLS routers, optical equipment, voice equipment, and all other telecom and datacom network equipment, and non-telecom and data network equipment. The number of access lines and DSL, cable broadband, and mobile subscribers per service provider is also included.