According to Infonetics Research, worldwide telecom carrier capex is expected to increase by four per cent to reach $354 billion in 2014.
The research firm further states that the majority of the telecom investment will be coming from China?s massive long term evolution (LTE)-based network rollouts by operators such as China Mobile and China Telecom. In addition, investments in the telecom sector will also get a boost following network upgradation projects initiated by Deutsche Telekom and Vodafone Plc. across Europe.
According to Infonetics Research, in 2013, telecom carrier capex grew 6.7 per cent to $340 billion, as a result of a significant forex adjustment that eroded billions of operator revenue and capex when converted to the US dollar. The research firm underlines, that in 2013, the Japanese and Indian currency depreciated by more than 30 per cent and 10 per cent against US currency.
However, Infonetics Research points out that the depreciation in currency is not reflected in revenue of leading telecom network vendors such as Ericsson, Nokia and Alcatel-Lucent, etc. In fact, despite challenges, all the three network vendors are in the process of restructuring their operations to cut down operational costs and identify new revenue streams.
Going forward, the research firm concludes that global telecom services revenue is expected to grow at a compound annual growth rate of 1.7 per cent from 2013 to 2018. The two primary factors leading to slow growth in telecom service revenue include market saturation and intense competition in telecom markets world wide.
