Asia Pacific telecom spending for the first three quarters of 2007 topped US$47.1 billion, up six per cent from the first three quarters of 2006.
Outside of Japan, however, telco capex for the region rose at a much stronger 19.5 per cent to $31.8 billion, according to an Ovum report released today.
Wireless infrastructure is a clear beneficiary of emerging market growth, but wireline optical (ON), DSL, and packet transport (PT) segments all enjoyed increased sales.
Again based on year-to-date figures, DSL was up 24 per cent to $0.8 billion, PT up 15 per cent to $1.8 billion, and ON was up four per cent to $2.5 billion.
Optical spending for the Asia Pacific region excluding Japan rose at faster 11 per cent clip, and a similar disparity is evident for other equipment segments.
Ovum's senior analyst for network infrastructure, Matt Walker, said NTT's long anticipated next-generation network buildout is largely still on hold, so vendors heavily reliant on this market are struggling.
"APAC's big emerging markets, though, are another story as carriers race to extend mobile coverage and introduce new services," he said.
"India is the biggest single contributor to growth in these markets, where the capex focus is rapid construction of low-cost mobile networks.
"Along with India, a number of other markets in South and Southeast Asia have good growth prospects over the next several years as penetration rises."
Even China, whose equipment sector has slowed in previous quarters, has seen carrier capex intensity (capex divided by revenues) increase in the first nine months of the year, from 23.7 per cent to 24.8 per cent.
Capacity expansions to support broadband growth and scaling new broadband value added services are factors in China, as is wireless spending aimed at improving quality of service, supporting rural expansion, and lifting ARPU of urban subscribers.
Much of the growth in APAC's emerging markets outside Japan and China has similar sources, but network transformation is also becoming a driver in markets such as Australia and Korea.
For APAC carriers revenues were up 10.5 per cent to $240.7 billion and net income has risen 20.7 per cent to $30.6 billion.
Huawei led vendor rankings for optical networks followed by Alcatel-Lucent and NEC.
Cisco led packet transport with 39.9 per cent market share followed by Huawei (14.6 per cent) and Juniper (13.3 per cent).
In the DSL network equipment category Huawei led with 31.5 per cent followed by ZTE with 21 per cent and Alcatel-Lucent with 15.4 per cent.