Wireless carrier market set for further decline

Bucking the recent trend towards recovery in networking markets, analysts at iSuppli have today released figures suggesting that the wireless carrier infrastructure market will decline in 2010 for the second year on the trot. Total capital spending on wireless comms infrastructure this year will re

Bucking the recent trend towards recovery in networking markets, analysts at iSuppli have today released figures suggesting that the wireless carrier infrastructure market will decline in 2010 for the second year on the trot.

Total capital spending on wireless comms infrastructure this year will reach $120.6bn (£80bn), a decline of 1.8% from 2009, said iSuppli.

"All the major wireless carriers in the developed nations will be extremely cautious in their investments," said iSuppli senior director wireless research principal analyst Jagdish Rebello.

"Given the continued uncertainties of the global macroeconomic environment, iSuppli expects that wireless subscribers will reduce their spending on wireless voice and data communications - in the process adversely affecting the revenue streams of carriers," he added.

According to Rebello, the knock-on effect of this slowdown will be that carriers scale back their investments and seek to proliferate or maintain 3G technologies at the expense of innovation in 4G technologies such as LTE.

Mass deployment of 4G technology is not expected to occur for at least another 12 months, said iSuppli, allowing carriers to recoup their investments in 3G.

Of the three major components comprising total capital spending, software and maintenance services are expected to account for approximately $60.9bn 50% of the wireless market during 2010, while capital expenditure on wireless infrastructure will hit $36.7bn.

Carriers will, however, continue to invest selectively in some key areas, specifically data and video services, because the need to offset declining voice revenues is becoming more urgent.


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