The growth rate of Internet traffic in North America has slowed significantly over the past year. At face value, this data point suggests negative implications for telecom investment, since the excess capacity in backbone networks will take longer to absorb. In actuality, however, the slowdown in traffic growth should have little impact on carriers' investment plans. At some level, the slowdown has been anticipated: As the absolute traffic volume grows ever larger, it is unreasonable to expect continued triple-digit growth rates. Furthermore, traffic never was and will not be a primary driver of capital investment decisions. RHK believes capital expenditures (capex) by the wireline service providers will remain stable even as traffic growth slows.
展开▼
