IHS Markit: Mobile Infrastructure & CAPEX Stuck in a Funk; Project CORD Gains Traction

by Stéphane TéralSenior Research Director, Mobile Infrastructure and Carrier Economics

The mobile infrastructure market outlook remains cloudy as 2017 brings us 2 years past the LTE peak, with fewer and fewer potential 2G/3G mobile networks that need to be upgraded to LTE. In the Q4 edition of our Mobile Infrastructure Market Tracker – Regional, released 1 December 2016, we had 537 live commercial LTE networks and a total of 560 in the forecast for the full year. As we believe there are roughly 750+ mobile networks worldwide and those left with no LTE have small footprints in the range of fewer than 1,000+ nodes, the LTE infrastructure hardware market is poised for steep decline this year.

Telecom spending (CAPEX) appears to be very flat at best! Little has changed since last year, and in our most recent biannual Service Provider Capex, Revenue, and Opex Market Tracker – Regional report, released in November 2016, we still expect worldwide capex to barely budge from $341.5B last year to 342.8B by year end—just 0.4% YoY growth.

For an update, please visit https://techblog.comsoc.org/2017/06/05/sk-telecom-rolls-out-4-5g-service-in-south-korea-plans-1g-bsec-service-in-2018/


Separately, IHS-Markit’s Michael Howard writes that 70 percent of respondents to an IHS Markit survey plan to deploy CORD in their central offices — 30 percent by the end of 2017 and an additional 40 percent in 2018 or later.

The Central Office Re-Architected as a Data Center (CORD) combines network functions virtualization (NFV) and software-defined networking (SDN) to bring data center economics and cloud agility to the telco central office. CORD garnered so much attention in 2016 that its originator — On.Lab‘s Open Network Operating System (ONOS) — established CORD as a separate open source entity. And non-telcos have joined the open source group, including Google and Comcast.

IHS Markit found that 95 percent of operators surveyed are using or planning to deploy servers and storage in selected central offices to create mini data centers to offer cloud services. And they will use them as the NFV infrastructure on which to run virtual network functions (VNFs).


The survey results are based on interviews with router purchase decision-makers at 20 global service providers that control 36 percent of worldwide telecom capex and a third of revenue.

In other survey findings, operator respondents indicated that 100-Gb/s Ethernet is the wave of the future. They said that it will make up 38 percent of their 10-, 40- and 100-Gb/s Ethernet port purchases during 2018, which is more than two times that of 2016.

In addition, 70 percent of operators surveyed are deploying packet-optical transport systems (P-OTS) or plan to do so by 2018. Between 2016 and 2018, the percentage of nodes with P-OTS is anticipated to grow six-fold in core/long haul and almost double in access, aggregation, metro core, and regional.

“We believe these plans will keep a damper on router sales,” writes IHS Markit senior research director Michael Howard in a summary of the report. “And despite much industry talk, respondents have little current demand for a multilayer data/transport control plane.”