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New Opportunities for Vendors Emerge as Global Capex Rebounds

Published by: Yankee Group

Published: Sep. 27, 2006 - 16 Pages


Table of Contents


I. Introduction

II. Global Carrier Cost Structure Trends

Drivers of Capex and Opex Change

III. Regional Analysis of Capital Expenditure Trends

Asia-Pacific

EMEA

Latin America

North America

IV. Regional Analysis of Operational Expenditure Trends

Asia-Pacific

EMEA

Latin America

North America

V. Conclusions and Recommendations

Recommendations to Vendors

Recommendations to Carriers

VI. Further Reading

Abstract

This Yankee Group Report focuses on the global trends for carrier capital and operational expenditure intensity. To understand how these metrics have evolved during the past 5 years, it is important to understand how spending has changed relative to revenue. As a result, we averaged these financial metrics against carrier revenue.

Although capex spending may be increasing in absolute terms, the important question for vendors is whether capex is growing faster than revenue. Those carriers with capital expenditures that are keeping pace with or declining relative to revenue growth do not represent the same level of opportunity for vendors. They are spending their capex dollars on maintaining and operating their network rather than on undergoing a major network upgrade.

The global equipment rebound, which is one component of capex, and the growth seen in international regions; it also displays our forecast for regional equipment spending for 2006 through 2008. This rebound is especially pronounced in Asia-Pacific, which has seen a significant growth in both its industrialized and emerging markets—most notably Japan, Korea and China. Growth is also very strong in the North American and EMEA regions.

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