Although telecom service providers in general have suggested they will spend 10% to 15% less this year than they did in 2008, their capital expenditures for the first quarter appear to be down about 20%, UBS analysts said in a research note today, citing discussions with industry sources.
As far back as December, UBS predicted US telco spending could drop 10% this year. Even that estimate has been revised to a range between 10% to 15%.
Ciena offered one of the first glimpses into first-quarter carrier spending this month when it reported results for its fiscal first quarter, which includes January 2009. The vendor’s CEO said that despite their publicly announced capex budgets, carriers were scrutinizing spending decisions on a monthly basis. Ciena missed its revenue target for the quarter and announced a 9% workforce cut.
Still, in today’s note — reporting lower expectations for Juniper Networks’ first quarter, citing slowed spending in both the carrier and enterprise markets — UBS reiterated expectations for a rebound in the second half of the year.