Global Wireless Infrastructure will Increase with 3G Implementations

date: September 28, 2001

According to a recently published Yankee Group Report, "Infrastructure Capex: How Much Will It Cost, and Which Vendors Will Win?," global capital expenditure (capex) for wireless mobile network infrastructure will increase from $99.4 billion in 2001 to a maximum of $120.2 billion in 2004 before declining to $114.6 billion in 2006. The lion's share of expenditure will be for GSM, GPRS, and WCDMA infrastructure. Furthermore, it is expected that the proportion of capex associated with infrastructure electronics will increase from approximately 53% of the total capex in 2001 to as much as 63% of the capex in 2005, as operators overlay 2.5G and 3G infrastructure on their existing networks. This comprehensive analysis is derived from a sophisticated model developed by the Yankee Group's Wireless/Mobile Technologies research and consulting practice, using regional market information for North America, Latin America, Europe, and Asia-Pacific.

"There has been a great deal of speculation surrounding the cost of 2.5G and 3G network implementations. It is evident that it is going to be expensive, particularly for operators that are transitioning between generic technologies," said Phil Marshall, an analyst at the Yankee Group. "However, with the imminent obsolescence of 2G technologies and the promise of next-generation services, operators cannot avoid these costs without the risk of losing market share." This expenditure cannot come soon enough for the infrastructure vendors that are relying on the 2.5G and 3G technologies that they have aggressively promoted.

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