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China is expected to defy the downturn in the global wireless infrastructure equipment business in 2009, as the nation’s 3G network rollout drives world-beating double-digit growth in carrier capital spending, according to iSuppli Corp. The market research company expects spending on wireless infrastructure equipment in China to rise to $6.2 billion in 2009, up 13.2% from $5.5 billion in 2008. In contrast, global carrier spending on wireless infrastructure gear in 2009 will decline by 3.5% to $39.7 billion down from $41.1 billion in 2009. No other nation will generate such robust revenue growth, though India represents the second-fastest rising region at 4.5%.

In May 2008, China’s government announced plans to award three 3G licenses as part of a major restructuring plan. It crated three telecom providers—China Mobile, China Netcom (GSM), and China Unicom/Telecom—each with fixed-line and mobile assets. This move led to the rise in the nation’s infrastructure spending in 2009. In fact, iSuppli expects China Mobile to build on its TD-SCDMA trial in major cities and continue rolling out a nationwide TD-SCDMA network in 2009. China Unicom and China Telecom will get their official 3G licenses in the first quarter of 2009, and China Unicom will launch its W-CDMA services in the second half of 2009.

China Telecom has begun to secure quotes from equipment suppliers for the build-out of its 3G cdma2000-1x-EVDO network. According to iSuppli, the carrier will have to invest a significant portion of its capital spending on the networking core in addition to basestations, gateways, and switching centers. This bucks the trend in the rest of the world, as the global contracture in wireless infrastructure spending primarily will be driven by carriers in developed nations. These carriers will slow down the pace of their investments in data-centric 3G/3.5G technologies as they seek to maintain a positive cash flow in 2009. 

“In the emerging markets of India, South Asia, and Africa, carriers will continue to invest in expanding the coverage of their voice-centric 2G/2.5G networks in the face of strong subscriber growth in these parts of the world. But these carriers are not immune to the global economic downturn, and the pace of investments in networking infrastructure will be slower than originally forecasted,” said Jagdish Rebello, director and principal analyst, wireless communications, with iSuppli.

Also, iSuppli believes the Indian operators will be cautious in their 3G investments in 2009 as they conserve cash flow following any expenditure on spectrum acquisition. The bulk of the India 3G spend will start in 2010. Global carrier spending on wireless infrastructure equipment will remain essentially flat in 2010, before rebounding with 4% growth in 2011.