Telco Emphasis on Wireline CAPEX Not Enough to Offset Declining Wireless Investments, According to Dell'Oro Group

CAPEX to Decline at Faster Pace than Revenues over Next Three Years

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Sep 21, 2016, 08:00 ET

REDWOOD CITY, Calif., Sept. 21, 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, reveals that telco emphasis on wireline CAPEX in the first half of 2016 was not enough to offset declining wireless investments. CAPEX is forecast to decline at a faster pace than revenues over next three years.

"Given the state of carriers' mobile networks and the asymmetry between mobile and fixed broadband coverage, penetration, and performance, carriers are increasingly shifting resources away from wireless towards wireline to ensure networks are ready for a more converged future," said Stefan Pongratz, analyst at Dell'Oro Group. "Many of the developments that characterized the first half of 2016 will likely prevail in the second half of the year and will continue over the next couple of years. Operators are aligning their investments with top-line revenue trends, which will continue to be impacted by slow growth in wireless," explained Pongratz.

Despite the challenges to identify new growth engines in a maturing smartphone market, Dell'Oro Group remains optimistic about Service Providers' ability to curb the potential downside and projects CAPEX will decline at a faster pace than revenues over the next three years, driving capital intensities to improve from 18 percent in 2015 to 16 percent in 2018.

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