China to Top Capex Table

China’s operators are set to commit a massive $50 billion in capital expenditure in 2009, according to a report by Pyramid Research .

The report, "Capex in Asia-Pacific," notes that just over half of this will be spent by China Mobile Ltd. (NYSE: CHL) on the rollout of its 3G network and the expansion of its 2G services. (See China Mobile Preps 3G Surge.)

The 2G investment will increase capacity and extend services into rural areas and is expected to account for about two thirds of China Mobile's capex outlay in 2009, according to the report, demonstrating how much growth remains in the country’s voice market.

Unsurprisingly, Pyramid's analysts believe Chinese vendors will be the main beneficiaries of such network expansion projects. According to the report, 81 percent of China Mobile's $8.6 billion second-round 3G tender was awarded to three local vendors -- Datang Telecom Technology Co. Ltd. , Huawei Technologies Co. Ltd. , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- giving them significant momentum in the global telecom equipment market, which is set to be worth about $297 billion this year. (See Global Capex Set for 2010 Rebound.)

China is not the only Asian market cocking a snook at the global economic downturn by investing large wads of cash in its telecom infrastructure.

The report cites LTE and HSPA+ network evolution in Japan and the expansion of 2G and the introduction of 3G in India as further examples of expected investment in Asia/Pacific. (See Indian Operator Expects Lengthy 3G Delay ).

In addition, new government-backed national broadband networks in Australia, Malaysia, Singapore, and South Korea will require investments of nearly $42 billion during the next four years, the report states. (See Singapore Unveils Digital Hub Vision and Telstra Dumped From FTTx Project.)

— Catherine Haslam, Asia Editor, Light Reading

somanvenugopal 12/5/2012 | 4:09:23 PM
re: China to Top Capex Table

Most of the Capex round the globe seems to be inclined towards expanding and building Wireless Networks. China and India should be a dominant force. Is there a difference in Capex regionwise, as a percentage to the Total Revenue of the Operator?

-á15% as a Capex of the Total Revenue should be considered healthy

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