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4G to drive up wireless infrastructure expenditures

Posted: 12 Aug 2010     Print Version  Bookmark and Share

Keywords:4G wireless infrastructure  4G networks 

After two years of declining disbursements, global capital expenditures on wireless infrastructure equipment is poised to rebound with a projected growth of Rs.1.89 lakh crore ($40.3 billion) in 2011 as carriers in the developed world start unfolding next-generation 4G networks. According to iSuppli Corp. this projected spending of Rs.1.89 lakh crore ($40.3 billion) in 2011 results into 6.7 per cent growth from 2010.

Capital disbursement on wireless infrastructure worldwide is projected to reach Rs.1.89 lakh crore ($40.3 billion) in 2011, up 6.7 per cent from Rs.1.78 lakh crore ($37.8 billion) in 2010. This will draw-up the downward trend that occurred in 2009 and is projected to continue this year. Spending decreased 5.7 per cent in 2009, and in 2010 will dip by an additional 2.3 per cent to Rs.1.78 lakh crore ($37.8 billion).

Source: iSuppli Corp.

Source: iSuppli Corp.

Jagdish Rebello, senior director and principal analyst (wireless research) at iSuppli, analyses that the upturn in 2011 signals renewed commitment within the wireless industry to move on expansion plans that had been delayed or put on hold because of the global recession. He says, "Starting in 2011, wireless carriers in industrialised countries will start to deploy 4G in order to attain faster speeds and to unclog the heavy data traffic generated by the exploding use of smart phones. This 4G-driven growth in capital spending will continue at least through 2014."

Rebello notes that the level of spending on infrastructure equipment represents a revealing metric for the health of the entire wireless industry; as infrastructure capital spending accounts for approximately 30 per cent of total wireless capital outlay—with the remaining portion spread out between spending for software upgrades and maintenance on one hand, and capital costs on site procurement on the other.

In developed countries, iSuppli predicts carriers will favour Long Term Evolution (LTE) over WiMAX as choice of 4G in 2011. Over the next decade, LTE will become the dominant technology, while WiMAX will be relegated to the status of a niche 4G technology. A number of wireless carriers have already pledged support for LTE, including NTT DoCoMo and KDDI in Japan, as well as Vodafone and Orange in Europe. In the United States, Verizon Wireless has announced it will roll out LTE by the end of this year, with AT&T and T-Mobile expected to follow in 2011.

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