Mobile operators to spend billions on network expansion this year

8 March 2006 News

According to the latest budget figures examined by technology market analyst, ABI Research, many mobile operators worldwide will commit increased capital expenditure to network expansion this year.

The CAPEX data, collected for the company's new 'mobile operator performance benchmarks database', reflect increased mobile telephone usage and growing saturation in mature markets.

"To support the increasing traffic and to enable the deployment of new applications and services, network expansion has become a necessity for mobile operators," says Shailendra Pandey, a research analyst at the firm's UK office.

"Both GSM and CDMA operators therefore are now spending a good portion of their CAPEX on network expansion and on building more capacity. Similarly, operators that have started providing 3G services are also spending more on building out their networks to increase 3G coverage."

Examples may be found on all continents. Verizon Wireless, which continues to record the highest subscriber net additions in the US, is expected to invest $15,7bn on CAPEX of which a significant part will be spent on network and IT systems, with an eye to reaping greater operational savings down the track.

3 Italy is also expected to spend a total CAPEX of around $1,1bn in the next two years, most of which will be spent to extend the 3G network coverage to more than 90% of the population in Italy.

And China Unicom, which spent nearly $4,8bn (with disappointing results) on CDMA network expansion during 2005, will outlay a further $1,5bn on its GSM network in 2006.

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