This week in telecom news, a report from the Dell'Oro Group projects that overall telecom Capex will drop in 2015,...
despite a 3% increase this year. Dell'Oro points to slower mobile data growth and increased market competition among the reasons for the projected drop in spending. Meanwhile, GE is strengthening its industrial Internet of Things (IoT) plans by partnering with Cisco, Verizon and Intel to strengthen its Predix software platform.
In other news, New York Governor Andrew Cuomo is continuing his push for greater broadband access throughout the state and is seeking $1 billion in funding from the public and private sectors to build a 6,000-mile fiber network.
2015 telecom Capex expected to decrease as revenue slows
It's a familiar story: If carrier services revenue isn't going up, it's hard to justify investing more in network infrastructure. In 2014, overall worldwide telecom operator capital expense will be about 3% more than in 2013, according to Dell'Oro Group estimates, as operators invest heavily in their fiber and wireless LTE network infrastructure. Illustrating the problem, investment in mobile network infrastructure saw double-digit growth in the first half of 2014, while carriers' mobile service revenues increased in the single digits.
In its Carrier Economics report, Dell'Oro Group projects overall telecom Capex will drop to about 2% in 2015 due to multiple factors, most of which point to the slowdown in carrier revenue. According to Dell'Oro carrier economics analyst Stefan Pongratz, those factors include high mobile device penetration, slower mobile data growth, lack of new revenue streams and increased competition from developed and undeveloped markets.
A drop from 3% to 2% in 2015 Capex translates into $6 billion less in spending compared to 2014, according to EE Times.
Telecom operators' fiber and LTE infrastructure buildouts will continue to drive telecom equipment investments in 2015, the report said. The amount of Capex allocated to new technologies and network topologies like network functions virtualization and small cells will be negligible over the next six quarters, according to Dell'Oro. -- Kate Gerwig
GE teams up with Cisco, Verizon and Intel to push industrial IoT
General Electric is putting greater focus on industrial IoT by teaming up with Verizon, Cisco and Intel to strengthen its industrial offerings.
GE plans to make smart equipment like turbines and engines by connecting products to its Predix software platform, dubbing this venture into IoT as the "industrial Internet."
Cisco and Intel will work with GE to create "Predix-ready" devices, which will connect equipment and devices to the cloud and integrate into existing infrastructure. Cisco will work to integrate Predix with its next generation of networking products, while Intel will focus on integrating Predix with its processor and software products.
"From networked systems utilized in railways and electric power grids to edge switches and client devices that connect assets like laptops, field devices and wireless access points, Cisco and Intel enable Predix to be distributed to the edge, even in some of the most severe conditions," said Bill Ruh, vice president of GE Software, in a press release.
Meanwhile, Verizon will work with GE to connect its cloud platforms for Predix to offer services like remote monitoring and diagnostics.
GE said the Predix platform will be open to users and developers sometime in 2015. The platform will allow for customized industry applications, management and security.
New York governor seeks fiber network
New York Gov. Andrew Cuomo hopes to build a statewide fiber network and is looking for $1 billion in funding to do it.
Cuomo said he is seeking $500 million in state funds for what he is calling the New NY Broadband Fund, which will be used to build a 6,000-mile fiber broadband network throughout the state. Cuomo is also asking service providers and others that are interested in expanding their fiber services to match state funds for a total of $1 billion for the buildout.
"Broadband availability is going to be what the interstate road system was in the '50s," Cuomo said at an industry event, according to the Albany Times Union. "The way you needed road access and access to basic utilities to do business, electric and phone -- you're going to need access to broadband if you're going to be competitive."
The goal of the New NY Broadband Fund is to offer New York residents a fiber network with speeds of at least 100 Mbps. Funding priority would be given to providers that can offer the fastest service at the lowest cost, according to the Times Union.