INTELLIGENCE FROM THE BROADBAND ECONOMY

Public carriers in North America, Europe and Asia are on track to increase their capital expenditures for the third year in a row in 2006, although the increases vary by type of company and country and aren't as spectacular as the next-generation network hype might lead one to believe. According to Infonetics Research, carriers in those three regions will increase spending by 6% to just under $190 million in 2005, after 9% annual growth in 2004, with the increases going to next-gen technologies such as packet voice, broadband, metro Ethernet and IP/MPLS routers, said analyst Kevin Mitchell. “The total capex pie isn't getting that much larger because the new spending is being offset by winding down of legacy spending,” he said. In addition, some market segments, such as Asian incumbents and North American cable multiple systems operators, will actually cut back capex spending because they've already built out the infrastructure on which they will offer new services. “The four RBOCs are increasing their spending 9% in 2005 over 2004,” Mitchell said. “That's the biggest chunk in North America, and they are growing that chunk.”