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Introduction

Final year-end 2014 earnings results are now in for communications providers (CPs). Revenues were flat for telcos (aka CSPs), while their capex grew 3% to $340bn. Adjacent market providers helped deliver growth in 2014.

Highlights

  • For the second straight year, revenue growth rates in both the fixed and mobile CSP segment were essentially flat in 2014. Mobile growth retains a slight advantage, but the mobile-fixed growth gap has been shrinking. ICP revenues grew at 9% YoY, while the smaller CNP segment grew 14%.
  • Capex from ICPs grew 24% in 2014 to $57bn. Data center and related cloud spending is strong among both ICPs and traditional CSPs. Select ICPs are having an outsized impact on industry debates.
  • The strongest CSP capex increases in 2014 came from China, MEA, and India, respectively. China’s single-country capex in 2014 reached $65.8bn, more than the Europe (ex-Russia) total of $61.5bn for the year. North America remains the capex leader, spending $80.3bn in 2014, up 4% YoY.

Features and Benefits

  • Assesses 2014 revenue and capex growth trends for three segments of communications providers.
  • Contrasts revenue trends for fixed and mobile CSPs, Internet content providers (ICPs), and carrier-neutral providers (CNPs).
  • Identifies pockets of capex growth.
  • Analyzes outlook for capex and revenues in light of recent trends.
  • Reaffirms projections from our latest market forecast.

Key questions answered

  • What factors are driving or constraining capex growth across the communications provider landscape?
  • How much of their revenues do the different provider types spend on capex, and is this changing?
  • Who are the biggest spending individual companies in the CSP, ICP, and CNP segments of the communications provider industry?

Table of contents

Summary

  • In brief
  • Ovum view

ICPs continue to grow, boosting total capex; data centers a hotspot for all provider types

  • Revenue growth strong in ICP and CNP segments; CSP revenues flat
  • CP capex surpasses $400bn in 2014
  • Capital intensity trends

Market outlook

  • 2014 results in line with latest forecast

Appendix

  • Methodology
  • Ovum now segments communications providers into three groups
  • Further reading
  • Author

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