Thursday, November 7, 2002
The carriers' downward spiral of capital expenditures will bottom out by mid-2003, research firm iSuppli Corp. predicts. While the toll on chip companies feeding the wired network will continue to be heavy, some bright spots can be seen, particularly in metro access, the report says.
The downturn's impact might be mitigated if carriers find a way to charge on a data-type basis vs. bulk data, and if governments in developing nations make communications a national priority, the report says.
"No single metric in wired communications carries as much weight as service-provider carrier capital expenditures [capex]," the report said. "For OEMs and component suppliers to the wired communications industry, capex is the barometer of future profits or losses."
As things stand now, iSuppli predicts modest 2 percent growth for 2003 over 2002, and doesn't expect carriers to reach financial stability until 2005 or 2006. Aggressive reinvestment in their networks won't restart until 2007. "All hope of recovery in 2002 has vanished and 2003 is in question," the report says.
Outside the United States — which will remain the largest market for comms equipment — China has been the dominant communications market, but even that nation hasn't been immune. ISuppli said in January 2002 that capital spending on wired communications in China would decline 8.5 percent this year, but has lowered that forecast to a 23 percent decline for the year, resulting in a $2 billion drop in purchases.
By: DocMemory
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