Survey Says: Capex Up

According to Infonetics, capital expenditures by telecom service providers climbed to $202-billion last year, and it is expected to hit $236-billion by 2009. In total, this will mean capex of $1.1-trillion over the next four years. "Collectively spending over a trillion dollars in five years sounds like a lot of money, but it’s actually significantly less than it would be if there weren’t so much consolidation going on," said Stéphane Téral, principal analyst with Infonetics Research. "The number of providers is decreasing due to mergers, which is increasing the economies of scale for the combined entities, resulting in considerable capex savings. This is why overall capex growth is slow now." Infonetics expects service provider revenue to grow 4% annually over the next five years: from $1.2 trillion to $1.4 trillion between 2005 and 2009.

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