Global telecom industry capex to touch $224 bn by 2015

Global telecom industry capex to touch $224 bn by 2015

New Delhi: Riding on high demand for mobile services in developing countries, the capital expenditures of the telcos globally is expected to rise to $224.5 billion by 2015, a report said.

According to the market analysis report by US-based The Insight Research Corporation, mobile operators in developing countries would continue increasing their capital outlays to meet the pent up demand for service.

“Capital expenditures (capex) by telecommunications service providers globally is expected to increase at a compound rate of 2.4%, from $199.6 billion in 2010 to $224.5 billion in 2015," the report stated.

According to the study, capital expenditure in various global regions would be very uneven with major sectors witnessing slump or decline. Demand for mobile services in developing nations would offset lag in spending in developed countries, it added.

In developing countries, capital expenditure growth slowed in 2009, but did not turn negative due to the buoyancy provided by the growth in mobile subscriber.

“This growth is expected to continue during the forecast period. India’s capex outlook is prima facia evidence of this trend," the report said.

However, fall in spending in China is a result of slowdown in mobile subscriber growth rates, rock-bottom equipment prices and operator margin pressure, it added.

Meanwhile, capex spending among fixed-line operators is expected to continue to decline in the next few years.