Cambridge, MA, August 11, 2004

According to the new Pyramid Research report, Global Mobile CAPEX Handbook, infrastructure CAPEX continues to decline with forecasted 2004 spending reaching $33.5bn, down from a high of $38.5bn in 2001. Pyramid expects GSM spending to decline from $21.5bn in 2001 to just over $15bn in 2004 as operators shift their focus towards building out WCDMA networks.

Vendors seeking to thrive in the upcoming years must focus on China, specifically China Mobile and China Unicom. Beyond China, India and the US are markets where GSM and CDMA spending will be significant.  Mobile operators in these three countries account for 49% of global infrastructure spending over the next five years.

“What we are seeing is a general decline in infrastructure spending due to the operators’ ability to consolidate contracts and leverage their size in obtaining favorable pricing,” comments report author Taha Rangwala.  While positive indicators are numerous regarding mobile operator’s CAPEX, infrastructure spending continues to decline.  Pyramid Research forecasts an additional 800m mobile subscribers worldwide by 2008, but “the networks are established and major expenditures will focus on upgrades and maintenance, as infrastructure equipment purchases will continue to decline for the foreseeable future,” adds Rangwala.  Areas of CAPEX growth will be handsets, channel cards and other ancillary products and services.

Also discussed in the new Global Mobile CAPEX Handbook is the likelihood of major mergers, primarily a Sprint/Nextel merger.  Nextel will likely decline the $4.8bn proposal from the FCC that grants rights for the 1.9 GHz spectrum due to the time and costs involved in solving the 800 MHz public service interference problem and will make the necessary efforts to acquire Sprint PCS, giving it some much-needed spectrum in the 1.9GHz band to launch high-speed data services. Taha Rangwala expects to see major mergers in the upcoming years as the US mobile market pushes for stability