Where is Telco Capex Going?

As global carriers are in the midst of capital planning exercises for 2009, one key question their suppliers must grapple with is what changes might be forthcoming. Analysts at ABI Research perhaps optimistically think global carrier capex will dip just about 1.3 percent from 2008 levels, when capex grew a bit more about eight percent.

Ovum believes the most likely scenario is a generally mild impact on the telecoms industry, with growth and spending slowing but not declining. The scenarios are described in the October edition of Ovum’s Straight Talk Monthly communication to clients.

Researchers at Ovum say they aren't yet sure, but offer three possible scenarios. In the optimistic forecast, 2009 capex will be at the level of 2007, reflecting a slower 2008 spending pattern.

The most-likely outcome is slower spending through 2009, though. In a worst-case scenario,
capex could fall as much as 28 percent, a level somewhat consistent with the "nuclear winter" years after the Internet and telecom bubble just after the turn of the century.