North American carriers cut spending: Yankee Group

Telecommunications carriers may be reducing equipment purchases thisyear, but the recession should not result in deep cuts to wirelessspending in the long term, according to The Yankee Group.

TheBoston-based market research firm last week released its GlobalTelecommunications Capex forecast, which predicts worldwide, carrierswill trim capital spending by four per cent this year.

DaveVorhaus, a senior analyst for The Yankee Group, said North Americancarriers this year will spend $66.1 billion on capital purchases, downseven per cent from $71.3 billion in 2008. Canadian carriers arepredicted to spend $7.65 billion this year. All figures are in U.S.dollars.

“Generally speaking, you are seeing a decline for corewireline equipment,” he said in an interview with Network World Canada.“If a wireless provider has a migration strategy that’s taking them tomass market adoption of (Long-Term Evolution) by 2013, that’s still ontrack.”

Though wireless carriers may cut their budget this year,they will have to make up for this in the future so they can meet theirdeadlines for fourth-generation wireless rollouts.

Worldwidecapital spending was US$284 billion in 2008, and the Yankee Grouppredicts this will drop four per cent to $272 billion. The “hugegrowth” in the Asia-Pacific region is “masking cuts” that we’re seeingelsewhere, Vorhaus noted, adding the seven per cent drop in NorthAmerica is “a pretty significant figure.”

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