U.S. Carriers Spent $109 Per Citizen in CapEx in 2013

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U.S. carriers shell out about $109 in capital expenditures per citizen annually, according to a new report from Recon Analytics. In 2013, US wireless capital expenditure spending hit an all-time high. AT&T and Verizon Wireless were going head-to-head to see who could finish their 4G LTE deployment first. According to Roger Entner of Recon Analytics, “AT&T’s attempt to overtake Verizon in network quality had the company spending roughly $11.5 billion on network improvements, while Verizon Wireless spent another $9.75 billion improving its network. Let me put this into context: AT&T and Verizon together spent more money improving their networks in 2013 than all 20 operators serving the five largest EU countries (EU5) combined.” That’s not counting Sprint and T-Mobile, who took the “slow and steady wins the race” approach during their 4G LTE build out.  Once we add the capital expenditure of Sprint and T-Mobile, which both spent more on network improvements last year than they had in previous years, US operators spent more than twice as much as the EU5 operators did to improve their infrastructure covering roughly the same number of subscribers, Entner explained. “So, with US wireless carriers at the upper bounds of investing in infrastructure, is it reasonable to assume that they will spend even more money to deploy small channel networks that are slower and less efficient? Most investors will tell you that that is not a tenable outcome,” according to Entner. “So what does this mean? In the US, the carriers that have the largest swaths of contiguous spectrum will be able to provide fast download speeds. Only Sprint is continuously in this fortuitous situation and in some markets T-Mobile, due to pure happenstances, also has 20×20 MHz contiguous spectrum. The other carriers will have to rely on costly and still unproven “carrier aggregation technology” to achieve results similar to what is possible with wider, contiguous spectrum blocks,” he explains.
June 11, 2014 |
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