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Annually, Yankee Group assesses the health of the global telecom market by analyzing regional capital spending plans of telecommunications service providers. These plans not only take measure of the global and regional spending plans of the operators themselves, but also serve as a barometer for the prospects facing solution vendors highly exposed to the telecom sector. Key findings from the firm for 2011 include:
- Capital spending will increase 2.9 percent from 2010 levels, from U.S.$267.9 billion to U.S.$275.7 billion. Stabilization of the macroeconomic environment will lead to overall capital spending growth after two straight years of decline. Yankee Group forecasts that global telecom capital spending will continue to rise through 2014.
- EMEA and Latin America will grow capex the most. EMEA will grow by 5.1 percent, while Latin America–buoyed by strong demand for mobile broadband and value–added services (VAS) and aggressive investment by multi–national operators such as Telefonica–will grow by 6.2 percent.
- Asia-Pacific will remain resilient. The Asia–Pacific region, which was predicted to experience a dramatic drop in spending among Tier 1 operators in China, proved to be remarkably resilient in their spending levels for 2010 and came in roughly flat (we had expected a drop of more than 10 percent). A continuation of this investment cycle is expected in 2011, with capex growing 4.4 percent year over year.
- North American capex will decline by 3 percent. North American operators will decrease spending slightly, from $70.8 billion in 2010 to $68.7 billion in 2011, making North America the only region reducing capex in 2011.
The telecom industry turned out to be remarkably resilient in the face of the severe recession spurred by the global financial crisis that began back in 2007. Nearly every sector of the economy saw significant contraction, but the telecom industry, propped up by explosive demand for mobile data products and services, continues to achieve steady growth.
Most vendors in the telecom space will look to emerging markets to find new organic growth in the current environment and need to focus on taking share from competitors in mature markets while competing on managed and/or professional services in all markets. While telecom services have crossed the chasm from luxuries to necessities (in the same vein as electricity), fierce competition, in particular from the Chinese vendors Huawei and ZTE, will ensure growth will not be easy.
Hear more about the trends of the mobile and wireless telecommunications ecosystem at 4G World 2011, produced by Yankee Group. The event will take place Oct. 24–27 at McCormick Place in Chicago, Ill. and will host 200+ expert speakers, 12,000 attendees and the largest global 4G expo. Learn more and register at www.4gworld.com.
About Yankee Group
Yankee Group is the preeminent research and advisory firm equipping enterprises to profit in a mobile world. The core of the firm’s content is proprietary research and analytics on the attitudes, behaviors and usage patterns of mobile users. |
