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The spending on Long-Term Evolution (LTE) base stations will hit US$ 12.3 billion in 2013 as countries around the world join the high-speed club. Membership is not exclusive to the developed economies as emerging markets close the digital divide by aggressive network roll-out. Some of these emerging market LTE deployments are government-sponsored initiatives as in Rwanda while others are private ventures as in Sri Lanka. LTE has helped to reverse the downward trend in RAN expenditure in Western Europe last year and will do the same in Eastern Europe, Latin America, and Middle East in 2013 and Africa in 2014.
“There are, however, differences in the type of capital expenditure (CapEx) incurred in different regions. Operators in the developed markets are already taking steps to upgrade their networks to LTE-Advanced this year. Going forward, amidst skyrocketing data traffic, they will also invest a larger proportion of their RAN spend on LTE small cells, which will yield significant savings on CapEx in addition to increased capacity for wireless operators,” noted Ying Kang Tan, research associate at ABI Research.
Besides tangible infrastructure, intangible LTE spectrum licenses also have cost operators dearly. For example, the 4G mobile spectrum license acquired by France’s SFR constituted 38.9% of its CapEx last year. Mobile carrier CapEx can be quite ‘lumpy’. 2013 will see a sharp reduction in China Mobile’s 3G investments in TD-SCDMA. In other markets, 3G equipment spend has already declined. “4G equipment spend is taking up some of the slack but there will still be a 6.0% drop this year,” commented Jake Saunders, VP and practice director of core forecasting. “2014 should see rising wireless investment as 4G deployment and capacity build-up gain momentum.”
ABI Research’s “Mobile Operator CAPEX” Market Data focuses on the regional and global mobile operator capital expenditure which includes base station and core network spend. It is part of ABI Research’s Mobile Capex Database.
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