Global service provider capex to reach $278 bln by 2009

Service provider CapEx spending made a nice rebound in 2004 with worldwide spending totaling $207 bln, indicating a brighter future for the service provider WAN equipment market, reports In-Stat. Service provider CapEx budgets will continue to grow moderately over the next five years, as wireline service providers invest in new triple-play and converged MPLS networks, and wireless service providers build new 3G infrastructure, the high-tech market research firm says. Worldwide service provider CapEx budgets are forecast to reach $278 bln in 2009.

The largest component of worldwide WAN equipment sales in 2004 was mobile wireless infrastructure, which was about 29% of total worldwide network CapEx budgets. Voice circuit switches, which used to be the largest component of wireline networking hardware, accounted for only about 5% of WAN equipment sales to service providers in 2004. DSLAM port shipments continued to grow strongly in 2004, but revenues declined because of reduced prices due to stiff competition among suppliers.