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May 21, 2014

Worldwide Carrier Network Upgrades to Cost $354 Billion this Year

Ever since the rise of LTE, mobile expenditures have been on the rise, with several government and private sector initiatives throwing whatever money it can at projects to expand networks. Infonetics Research, a research firm dedicated to gathering data on the telecommunications market, has released a report called “Service Provider Capex, Revenue, and Capex by Equipment Type”. In its detailed analysis of the mobile market, the firm has concluded that capital expenditures by telecom companies around the world will reach $354 billion this year.

Stéphane Téral, principal analyst, for mobile infrastructure and economics at Infonetics Research, spoke publicly about the report, saying, “As the fourth year of this new investment cycle continues, we're forecasting worldwide telecom capex to rise 4 percent and hit $354 billion by the end of 2014, with the bulk of the investment coming from China's massive LTE rollouts led by China Mobile and China Telecom, and from Deutsche Telekom's and Vodafone's major network upgrades across Europe.”

Last year, this growth was at 6.7 percent and hit $340 billion after adjusting for inflation of other currencies against the U.S. dollar. LTE was a hot market, with a healthy demand for IP voice services leading to an increased amount of IMS-based LTE rollouts and VoLTE becoming a concern in every carrier's priority list. Other telecom-related markets that grew included those for TDM voice, video infrastructure, and customer-premises equipment (CPE).

Of course, the companies making these enormous investments aren't exactly doing it at a loss. From 2012 to 2013, worldwide telecom revenue has risen 1.4 percent, totaling a whopping $1.97 trillion. To put that into perspective, that's two percent of the world's entire cumulative gross domestic product.

Infonetics Research's paper also demonstrates that global telecom service revenue will slow to a growth of 1.7% from 2013 to 2018. Of course, this was foreseeable, since the market will consolidate after the gold rush.

Edited by Maurice Nagle

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