Mobile Operators Spending Billions on Network Expansion in 2006

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According to the latest budget figures examined by 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 report 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 in global forecasting based in 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 United States, is expected to invest US$15.7 billion 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 US$1.1 billion 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 US$4.8 billion (with disappointing results) on CDMA network expansion during 2005, will outlay a further US$1.5 billion on its GSM network in 2006.

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