g., the Nokia-Siemens and Alcatel-Lucent mergers).
A business founded on traditional telecommunications equipment (e.g., selling telephone
switches for several millions of dollars) cannot survive against vendors selling
next generation IP-based equipment (e.g., a Thomson-Cirpack softswitch for $100,000).
Vendors have to adopt new models.
Table 3.1 shows capital expenditures for public wireline and mobile service providers
headquartered in North America, Europe, and Asia Pacific (the data is from Infonetics??™
TABLE 3.1 Public Service Provider Capital Expenditures
Capital Expenditures (in billion of dollars, U.S.)
Region 2004 (A) 2005 (A) 2006 (E)
North America $58 $63 $67
Percent change 8% 6%
Europe $60 (?‚¬ 49) $61 (?‚¬ 51) $71 (?‚¬ 56)
Percent change 6% 9%
Asia Pacifi c $61 $62 $65
Percent change 3% 5%
Total $179 $180 $190
Percent change 0% 6%
114 Chapter 3
Service Provider Capex Analysis series published in April 2006). Note that regional
assignment is based on where each company is headquartered, and in many cases, revenue
and CAPEX information includes data beyond the home region. Projections are
based on Service Provider guidance and Infonetics Research estimates.
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