U.S. Broadband Provider Investment Growing

11.04.2013

USTelecom today issued its latest capital investment research revealing that U.S. broadband providers in the wireline telecom, wireless telecom, and cable industries spent $68 billion in capital expenditures in 2012, up from a revised $67 billion in 2011.  Since 1996, broadband providers have invested more than $1.2 trillion in fixed capital. In recent years, broadband providers invested through difficult economic times to bring the latest, most advanced broadband technologies to U.S. consumers and businesses.

The broadband industry’s expanded investment was flagged in the Progressive Policy Institute’s 2013 U.S. Investment Heroes Report, which ranks nonfinancial companies by capital spending in the U.S. The PPI analysis covers the top six telecom and cable providers in the U.S. USTelecom data expand on PPI’s report by providing comprehensive industry-wide estimates and historical data back to 1996.

Broadband provider capital spending supports near term economic recovery and long-term investment in our nation’s information technology infrastructure, which enhances productivity, international competitiveness and consumer welfare over time. In fact, recent USTelecom analysis suggests that the U.S. is performing relatively well in Internet usage, which is a useful measure of international broadband performance. Continued investment in broadband networks will be essential to accommodate data traffic growth arising from increased adoption of more powerful and innovative technologies and applications.

The wireline telecom industry continues to contribute a significant portion of broadband industry capital spending. In 2012, the wireline telecom industry invested nearly $25 billion and, from 1996 through 2012, it invested approximately $660 billion. Wireline telecom investment in fiber and other technologies is important for building the networks to support growth in consumer, business and data center demands.

Faster home connections will be needed for growing IP video entertainment, video calling, in-home networks, and the Internet of Things. Small and large business will need faster fixed connections to deploy the latest enterprise applications via the private and public “clouds.” Data centers will need faster connectivity for increasingly sophisticated cloud computing and content delivery. Cellular and WiFi networks will require faster fixed backhaul connections to accommodate rapidly growing wireless data usage. Network backbone capacity will have to grow to in order to aggregate and transport the growing volume of traffic across the nation and the globe.

The USTelecom investment data show that the broadband industry is investing large amounts of capital in communications infrastructure. Wireline telecom operators are no exception, though they are currently burdened with maintaining legacy networks. The faster we as a nation can make the IP transition, the more resources we can shift to the IP-centric networks of the future and the sooner consumers and the economy can realize the benefits.

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