Mobile network spending to rebound, Dell'Oro says

Global spending on mobile infrastructure has been falling for the past two years despite rising demand for network capacity, but investment will rebound this year, according to a forecast by Dell'Oro Group.

Carriers' spending on mobile infrastructure equipment registered a double-digit decline in 2009 and a single-digit drop last year, but it will rise again in 2011, Dell'Oro analyst Stefan Pongratz said in a forecast released on Monday. Dell'Oro expects the mobile infrastructure market to grow from US$34 billion in 2010 to $42 billion in 2015.

The past two years have seen dramatic growth in mobile demand according to many indicators, including sales of typically data-hungry smartphones -- up 75 percent worldwide in 2010, according to IDC -- and the sheer amount of traffic hitting mobile networks. AT&T said late last year that traffic on its network had grown more than 3,000 percent over the past three years. But carriers actually spent less on cellular infrastructure in both 2009 and 2010, Dell'Oro said.

Investment fell in 2010 after Dell'Oro had forecast flat spending for the year. The drop came as the global economy suffered through one of its biggest financial and economic crises ever. But falling prices, driven in part by Chinese vendors such Huawei Technologies, and the hangover from a big 2G spending spree in 2008 in developing countries have also been blamed.

Dell'Oro expects spending on mobile networks to finally mark an upturn from 2010 and continued growth for the rest of the five-year period to 2015. But only a fraction of that expansion will be fueled by LTE (Long Term Evolution), the next-generation high-speed technology that some have painted as the savior of heavily loaded cellular networks, according to Pongratz.

Spending on LTE equipment will grow from $350 million in 2010, at the dawn of the technology's deployment, to nearly $7.7 billion in 2015, he forecast. However, investment in WCDMA (Wideband Code-Division Multiple Access) will continue to dwarf that of LTE at least through 2015. Carriers spent about $16 billion on the 3G mobile system in 2010, and that sum will nearly double to almost $30 billion by the end of the forecast period, according to Pongratz.

That discrepancy in spending will reflect the reality of actual mobile use around the world, Pongratz said: Even in 2015, 3G networks will carry the majority of mobile traffic, he said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

• Bookmark this page
• Share this article
  •  
  • facebook
  • slashdot
  • digg
  • Reddit
  • stumbleupon
  • linkedin
  • twitter
• Got more on this story? Email Computerworld
• Follow Computerworld on twitter

• Share
  Share this article

  •  google+
  • facebookfacebook
  • slashdotslashdot
  • diggdigg
  • RedditReddit
  • stumbleuponstumbleupon
  • linkedinlinkedin
  • twittertwitter
• print
• email
• Bookmark