After conducting an extensive research in ‘Worldwide Mobile Infrastructure Capital Expenditure’ ABI Research, a market intelligence company specializing in global connectivity and emerging technology, forecasted that mobile operator capital expenditure on key network items will see a three percent marginal growth in 2010.

The key network equipment spending in the areas of Radio Access Network “RAN” and Core Network “CN” will dominate most of the capital growth in 2010 with RAN CAPEX growing by 3.5 percent and CN CAPEX expected to increase by eight percent.

Jake Saunders, ABI Research (News - Alert) vice president for forecasting said, “The long-term prospects for network infrastructure revenues are not rosy. The consequences can already be felt in the marketplace as competition cuts equipment prices and forces equipment vendors to consolidate. ABI Research expects there to be a material shift in operator capital equipment spending patterns by 2012.”

Mobile operators are currently enjoying a buyers’ market with the mobile network market being dominated by multinationals such as Vodafone (News - Alert), France Telecom, Telefonica and MTN. By establishing framework agreements, these multinational mobile operators get the best deals from equipment vendors, thereby experiencing capital growth.

However, equipment vendors such as Ericsson and NSN are facing a tough competition from other vendors such as Huawei and ZTE. To stay ahead in the game, Vendors such as Motorola (News - Alert) and Nortel have diversified their main infrastructure business. According to Saunders, there is possibility of one of the vendors merging with Chinese vendors to gain market share however there might be a strong opposition of such a merger from political factors.

The research also shows that the radio access network “RAN” constitutes the major share of equipment spending. Mobile operators are gearing up for next generation network system and calling for an upgrade of their core networks. The increasing popularity of multimedia streaming, social networking and messaging signifies the increase in internet traffic.

Although 4G cellular services is yet to gain market, 4G CN equipment expenditure is bound to exceed 3G CN equipment spending by 2012 with the total spending forecasted to exceed $12 billion in 2010. Also 4G enabled IMS and RCS equipment expenditure is expected to rise since leveraging these. Mobile operators can offer media-rich and voice-centric services to gain significant economic boost.