[January 11, 2005] Capacity Trumps Coverage in the World of Wireless Infrastructure CAPEX, According to ABI Research Tweet OYSTER BAY, N.Y. --(Business Wire)-- Jan. 11, 2005 -- With most industrialized regions enjoying widespread cellular coverage, wireless operators are choosing to increase the capacity of existing systems instead of building more infrastructure, according to the latest study from ABI Research. While wireless operators were deploying their 2G networks and switching from analog to digital, they didn't hesitate to spend money on infrastructure. The bursting of the economic "bubble" in 2000 compounded the fact that many areas in the developed world were reaching saturation in terms of mobile coverage. That one-two punch put an abrupt end to most infrastructure CAPEX for several years. According to ABI Research analyst Brian Pellegrini, 2004 saw a slight increase in spending. But he emphasizes that this does not mean a change in the trend. "Yes, the push to deploy 3G networks has produced some increase," he says, "but companies are still afraid of over-extending, and the biggest factor driving down spending is the high cost of base stations." Instead of broadening coverage, operators are increasing their capacity to handle more subscribers. Compared to buying base stations, says Pellegrini, increasing capacity is cheap. One server can handle hundreds of thousands of new subscribers, and most base station upgrades now involve software more than hardware. Many wireless operators are doing their best to find revenues from value-added services that don't require much infrastructure. What does this mean for infrastructure vendors? "They won't want to hear this," admits Pellegrini, "but there will probably be some consolidation in the industry between now and the end of the decade." The new study, "Wireless Infrastructure CAPEX and Base Station Spending", covers spending on all major technologies, and forecasts the regional prospects for the respective technologies. Capital expenditure for the major operators of each of the markets is discussed, along with the strategies of those operators for the future. Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.2500. [ Back To TMCnet.com's Homepage ]