U.S. Mobile Backhaul Networks at Capacity, More Investment Needed
Wireless networks in the United States are operating at 80 percent of total capacity, the highest of any region in the world, according to a report prepared by investment bank Credit Suisse.
The firm argued that wireless carriers likely will need to increase their spending on infrastructure, as a result. Globally, average peak network utilization rates are at 65 percent, and that peak network utilization levels will reach 70 percent within the next year, the report says.
Investors may be underestimating the level of equipment spending that is required on an ongoing basis to support rapid growth in wireless data, Chaplin adds.
Some 23 percent of base stations globally have capacity constraints, or utilization rates of more than 80 to 85 percent in busy hours, up from 20 percent last year. In the United States, the percentage of base stations with capacity constraints is 38 percent, up from 26 percent in 2010.
Credit Suisse analyst Jonathan Chaplin says “wireless capex expectations may need to increase longer-term.” Chaplin thinks investors seem to expect capital intensity to start to decline in 2012, once LTE spending is largely complete, but that might not be correct.
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