Mobile service provider infrastructure spending fell 14 percent in 2017, though climbing in the fourth quarter by 15 percent, says IHS Markit
Service provider capital investment always occurs in waves: climbing as a next-generation network in built, then declining as construction nears completion. Also, investment occurs in different markets at different times. Generally speaking, the lower capex reflects the end of major 4G mobile network builds in many countries.
“The worldwide mobile infrastructure market gained some steam in the fourth quarter, but it was not enough to bring the whole year back into positive territory,” said Stéphane Téral, executive director, mobile infrastructure and carrier economics research at IHS Markit.
Also, Moore’s Law, open source and disruptive pricing are at work. Service providers want lower-cost networks and are going to get those networks. As is the case in every other area using computing, capabilities simply costs less than they used to.
“Despite relative stability in North America and a slight pickup in Japan, full-year 2017 mobile infrastructure revenue declined in all regions, and even more so in China,” said Stéphane Téral, IHS Markit executive director. “All of this confirms we are now in the second year of the post-LTE peak era.”
For the full-year 2017, global 2G/3G/LTE 2017 macro hardware revenue totaled $37.2 billion, declining 14 percent from $43.3 billion in 2016
When excluding 5G from the forecast, the global 2G/3G/LTE mobile infrastructure hardware market is projected to slowly decline to $13 billion by 2022 — a five-year (2018–2022) compound annual growth rate (CAGR) of -18.4 percent.
When including 5G in the forecast, 2G/3G/4G/5G hardware revenue is anticipated to increase to $25 billion by 2022, with a five-year CAGR of -7.8 percent.
5G hardware revenue is expected to reach $11 billion in 2022, starting from a very low base of early adopters in the US in the second half of 2018, followed in 2019 by South Korea and China’s massive trial that will generate revenue for vendors
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