Double Trouble Ahead for Worldwide Telco CAPEX in 2016, According to Dell'Oro Group

REDWOOD CITY, Calif., March 30, 2016 /PRNewswire/ -- A recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, networks, and data center IT industries, shows double trouble ahead for worldwide telco CAPEX with investments declining around the world, particularly in China and Europe, and constant currency revenue growth slowing down in all regions.

With revenue and subscriber growth slowing, carriers are realizing that network investments are essential to ensure sustainable leading market positions and are accelerating the shift toward fiber, IP, LTE, and the Cloud. However, these efforts have not yet translated into increased revenues.

"Diverging revenue and investment trends are expected in the short-term – however, carriers tend to balance investments between the wireline and wireless groups and align longer-term investment objectives with their respective revenue potential," said Stefan Pongratz, analyst at Dell'Oro Group. "In 2016, worldwide telco investments are expected to decline 6 percent in constant currency terms, primarily reflecting weaker investment trends in China and Europe. The anticipated CAPEX decline, coupled with flattish revenue growth, will undoubtedly normalize capital intensity trends in 2016," continued Pongratz.

The report suggests worldwide capital intensity increased for the full-year 2015, reaching a new high for the 2010-2015 period. However, the outlook for the equipment vendors is tilted downward – Dell'Oro Group's most recent forecast update suggests the combined manufacturer equipment revenues in Dell'Oro's Access, Mobile Packet/RAN/Voice, Routers and Carrier Ethernet Switches, Service Provider WiFi, and Optical Transport Reports will decline slightly in 2016.

About the Report
The Dell'Oro Group Carrier Economics Report provides in-depth coverage of carriers' revenue, capital expenditure, and capital intensity trends.  The report provides actual and forecast details by carrier, by region by country (United States, Canada, China, India, Japan, and South Korea), and by technology (wireless/wireline).  To purchase this report, please contact Matt Dear at +1.650.622.9400 x223 or email [email protected].

About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, networks, and data center IT markets.  Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions.  For more information, contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com. 

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SOURCE Dell'Oro Group

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