Infonetics Research: Hike in telecom carrier capex expected in 2H09, though overall capex still down in 2009

CAMPBELL, CA, May 19 (MARKET WIRE) --
Market research firm Infonetics Research recently released its Service
Provider Capex, Opex, ARPU, and Subscribers report, which features
analysis on how the current economic recession is impacting telecom
markets by region, as well as which telecom equipment segments are most
and least affected.

Highlights from the market research report follow, and clients are invited
to participate in a live call with Q&A time led by principal analyst
Stephane Teral this week (see https://infonetics.webex.com for multi
region-friendly times).

"As we anticipated, the first quarter of 2009 was ugly for equipment
vendors because service providers were very cautious, pulling back
significantly in some areas, particularly TDM and IP voice infrastructure
and SONET/SDH optical equipment spending. On the other hand, it was a
stellar quarter for large service provider shareholders, as free-cash-flow
among service providers is at an all-time high. Overall, service providers
around the globe are maintaining clean balance sheets, telco revenue
continues to show resilience, and consumers are increasing mobile Internet
usage on their iPhones and other smartphones. Meanwhile, China's massive
stimulus plan is kicking in, the US stimulus package is about to kick in,
money is flowing in Russia, and Brazil and China are getting back on track
and will grow faster than the developed world. This all adds up to a
likely capex hike in the second half of 2009, driven by the learned
lesson that if operators don't invest in their increasingly
traffic-burdened networks to maintain high-quality service, they risk
losing customers to competitors," said Stephane Teral, Principal Analyst,
Mobile and FMC Infrastructure, Infonetics Research.

REPORT HIGHLIGHTS

-- Global service provider capex (capital expenditures) hit a plateau at
$298 billion in 2008, marking the end of a five-year investment cycle

-- This represents a 12.9% increase in capex spending from the previous
year, with much of the growth due to currency appreciation against the US
dollar, which peaked in July 2008

-- 2008 also marked the beginning of a three-year disinvestment cycle,
although this one will not be as dramatic as the one that followed the
great telecom crash of 2000

-- Infonetics projects a 2.8% downturn in worldwide carrier capex in
2009, followed by a flat 2010 and a slow return to growth in 2011 with the
start of a new investment cycle

-- Worldwide service provider revenue is expected to weather the economic
storm and grow from $1.7 trillion in 2008 to $2 trillion in 2013

-- Incumbent carriers entered the global recession on solid financial
ground, and will likely exit the crisis even stronger, maintaining if not
increasing their lion's share of capex and revenue

-- Fueled by currency appreciation on top of double-digit growth rates in
native currencies, Asia Pacific service providers now spend the largest
share on telecom capex, followed very closely by service providers in EMEA
(Europe, Middle East, Africa)

-- Mobile infrastructure capex will continue to dominate total global
telecom and datacom spending, followed by voice equipment

-- The world's 10 largest service providers (ranked in order by 2008
revenue) are AT&T, NTT, Verizon, Deutsche Telekom, France Telecom,
Vodafone, China Mobile, Telefonica, BT, and Sprint (the strong euro tends
to push the European service providers closer to the top)

REPORT SYNOPSIS

Infonetics' capex report series tracks revenue, capex, capex-to-revenue
ratios, opex, ARPU, subscribers, and access lines of 171 public and
semi-private/government-owned service providers on a monthly and biannual
basis. The reports include past, current, and forecast capex and revenue
data through 2013 and equipment forecasts through 2009, market drivers,
analysis, service provider demographics, and customizable pivot tables to
analyze data by service provider, service provider type, and equipment
category. Each series includes a Fundamental Telecom/Datacom Market
Drivers report with analysis of overall market conditions for service
providers, enterprises, subscribers, and the global economy.

Reports are available for North America, EMEA (Europe, Middle East,
Africa), Asia Pacific, CALA (Central and Latin America), and worldwide.

DOWNLOAD OR BUY THIS REPORT

If you're already a member of the Infonetics online portal, log in at
http://www.infonetics.com/login Or create a new account here:
http://www.infonetics.com/cgp/newaccounts.asp

Once on the portal, go to Download Research or Download Sales Lit, then
select SERVICE PROVIDER CAPEX.

For sales, please contact Larry Howard, vice president, at
larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research is an international market research and consulting
firm serving the communications industry since 1990. A leader in defining
and tracking emerging and established technologies in all world regions,
Infonetics helps clients plan, strategize, and compete more effectively.

Infonetics is now on Twitter; follow us at http://twitter.com/infonetics.

Join Infonetics' online research portal to access free content and more
at: http://www.infonetics.com/cgp/newaccounts.asp

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=985590

Lead Analyst:
Stephane Teral
Principal Analyst, Mobile and FMC Infrastructure
Infonetics Research
(408) 583-3371
Email Contact
http://twitter.com/infonetics

Copyright 2009, Market Wire, All rights reserved.

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