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Mobile network expenditure falls in Europe despite 4G

September 26, 2012 | Jean-Pierre Joosting | 222903225
Mobile network expenditure falls in Europe despite 4G Mobile capital expenditure in Western Europe contracted 3.8% quarter-on-quarter (QoQ) even though mobile operators are building out coverage for 4G, and to a lesser extent enhancing capacity and coverage of their 3G networks.
Not only was QoQ spend down but also, year-on-year (YoY) growth was down significantly (19%). “Overall capital expenditure for the region is expected to drop 12% to $14.4 billion for the year. Western European carriers are at different stages in development which will very likely impact 4G adoption patterns,” said Jake Saunders, VP for Forecasting at ABI Research:

T-Mobile’s capital expenditure in the first half of 2012 was 4.9% lower than the previous year, although it is prioritizing LTE roll-out. The operator’s capital expenditure in the Europe region as a whole was €792 million; a YoY decline of 8.8%. The operator cited the difficult economic climate and tightened access to funds.

Vodafone also trimmed its capital expenditure. Spending was down £0.1 billion YoY but the investment continued to make improvements to coverage and quality of service.

For France Telecom, investment in networks, which represented 55% of the group’s capital expenditure in the first half of 2012, rose 6%. In France, there was an acceleration of investment in very high-speed mobile 4G and an increased investment in mobile capability. In Spain, an increase of €40 million YoY was linked to the acceleration of the mobile access network renewal program.

For Telefonica, capital investment was a mixed bag in Europe. In Spain, capex for the 1H-2012 year was €787 million, down -12.7% YoY. The operator claims that because it has achieved substantial “quality indicators improvements,” it meant the operator could reduce capex. In UK, capex reached €375 million by June 2012 with a YoY increase of 9.5%. Telefonica UK improved coverage and capacity of its mobile network, and refarmed 900 MHz spectrum in urban areas. In Germany, the boost in capital expenditure of €271 million in 1H-2012 was driven by an expansion in LTE network deployment.

www.abiresearch.com










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