No Network Left Behind: CAPEX on Wireline Infrastructure Accelerates

    Slide Show

    Five Considerations When Selecting Voice and Data Plans for Business

    The common wisdom is that wireless networks have exploded while the wireline world has followed way behind or even contracted.

    Undoubtedly, the first part of the statement is true. By any measure, the amount of wireless traffic is accelerating and the networks designed to carry that data are expanding.

    The second part of the statement, however, apparently is not really the case. The reality is that wireline infrastructure is expanding quickly as well. Channel Partners Online discusses a report from Transparency Market Research that points to a broadening, not narrowing, of the wireline world.

    Indeed, the report portrays a sector that is growing significantly. Channel Partners says that the wireline market, which it values at $19.1 billion this year, will reach $35 billion in 2020. That’s a compound annual growth rate (CAGR) of almost 10.4 percent.

    The fascinating element of this is that growth is heaviest in a very specialized area and is strong enough to play a major role in expanding the overall infrastructure:

    The oil and gas industry is a big driver. Transparency says there has been a continuous increase in the exploration and production activities of oil and gas in finding new areas of unconventional resources, which has immensely bolstered the growth of the global wireline services market. These wireline services are required by the oil and gas industries for exploration, drilling, completion, stimulation and intervention. The growth in wireline services is directly proportional to the drilling and completion activities around the world.

    Reportstack released a report last week that provides insight into the growth of wireline networking in industrial facilities. The press release on the report, Global Industrial Wireline Networking Market 2014-2018, doesn’t offer many details. It does point to a robust CAGR of 25.02 percent.

    The Dell’Oro Group is the third group that notes the increase in wireline expenditures. The firm found that combined wireline and wireless service provider telecom expenditures will grow by $30 billion between 2013 and 2018. That’s a CAGR of 2 percent. That follows the period between 2008 and 2013, the great recession, when the CAGR was -1 percent. The release said that wireline expenditures represented 70 percent of the growth.

    The expenditures on wireline seem to be growing on both the wired and wireline levels. The most dramatic growth seems to be in specialized and intensive industrial networks.

    Consumer-oriented infrastructure also is getting its share of investment. Announcements of gigabit networks are so common that they hardly qualify as news any longer. The cable industry is on the verge of upgrading from one version of the Data Over Cable Service Interface Specification to the next (DOCSIS 3.0 to DOCSIS 3.1), a move that will lead to direct and indirect investment. Likewise, phone companies are in the act. For instance, Frontier Communications will spend $63 million between 2015 and 2017 as a condition of its acquisition of AT&T’s local exchanges and statewide fiber network in Connecticut.

    The dual nature of the growth from specialized and consumer networks bodes well for wireline networks. It certainly paints a prettier picture than the common wisdom of an inexorable and almost full transition to wireless networking.

    Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at [email protected] and via twitter at @DailyMusicBrk.

    Carl Weinschenk
    Carl Weinschenk
    Carl Weinschenk Carl Weinschenk Carl Weinschenk is a long-time IT and telecom journalist. His coverage areas include the IoT, artificial intelligence, artificial intelligence, drones, 3D printing LTE and 5G, SDN, NFV, net neutrality, municipal broadband, unified communications and business continuity/disaster recovery. Weinschenk has written about wireless and phone companies, cable operators and their vendor ecosystems. He also has written about alternative energy and runs a website, The Daily Music Break, as a hobby.

    Latest Articles