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Wireless infrastructure expenditures to increase in 2011, as 4G advents

Posted: 11 Aug 2010 ?? ?Print Version ?Bookmark and Share

Keywords:4G? Long Term Evolution? WiMax?

iSuppli Corp. cites reversal of downward trend in declining disbursements on capital expenditures for wireless infrastructure equipment coming in 2011. Spending is projected to reach $40.3 B in 2011, up 6.7 percent from that in 2010.

After two years of declining disbursements, global capital expenditures on wireless infrastructure equipment is poised to rebound on its growth in 2011 as carriers in the developed world start unfolding next-generation 4G networks.

Capital disbursement on wireless infrastructure worldwide is projected to reach $40.3 billion in 2011, up 6.7 percent from $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 percent in 2009, and in 2010 will dip by an additional 2.3 percent to $37.8 billion.

Source: iSuppli Corp.

Source: iSuppli Corp.

Dr. Jagdish Rebello, senior director and principal analyst (wireless research) at iSuppli, analyzes 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 industrialized 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 percent of total wireless capital outlaywith 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 favor 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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