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July 10, 2009

LTE Base Station Spending to Hit $3.3 Billion in 2011: Report

An IT market research firm is reporting that wireless operators will spend about $3.3 billion on buying and building 142,000 Long Term Evolution base stations and related equipment throughout 2011.
“Vendors will be shipping base station equipment in significant quantities in 2010 ahead of limited trials that typically last about a year, followed by full commercial launches,” said Nadine Manjaro, senior analyst at Wireless Infrastructure Research Service for ABI Research (News - Alert).

Research analysts at the firm also announced that LTE (News - Alert) base station equipment spending is expected to increase almost vertically between 2011and the end of 2012. All these figures are well aligned with another market research, which predicted that the LTE Mobile Broadband market segment will generate global revenues to the tune of $70 billion by the end of 2014.
That report also claims that download speeds will increase to 100 mega bits per second (mbit/s), which translates to newer and better LTE equipment requirements, helping businesses and individuals to perform transactions much faster than they are doing today, a prime motivating factor for the technology to be universally adopted, provided service providers can keep prices competitive.
This information recalls a report claiming that mobile or wireless broadband (Wi-B) usage has sky-rocketed by 84 percent from 2007 to 2008 and that by 2013 more than 33 percent of all mobile subscribers will be Wi-B enabled.
“Many operators have been talking about re-use of existing equipment, but ABI Research understands that while there may be sharing of masts and cabinets most of those 142,000 base stations will have completely new baseband and RF components, because operators will generally try to keep the new LTE networks separate from their legacy networks.”
Interestingly, a survey revealed that the used equipment revenue was nearly $2.5 billion in 2008, which translates to 6.5 percnet of networking Original Equipment Manufacturer (OEM) market share, and more than 50 percent of the respondents said that since companies are refraining from buying product upgrades and investing in infrastructural migrations they are demanding second hand spares and guaranteed repair back-up for all pre-owned asset purchases.
“Due to LTE’s propagation characteristics and higher frequencies, operators will eventually have to deploy extra sites to iron out gaps in coverage,” Jake Saunders, vice president at ABI Research.
The research firm says that Alcatel-Lucent, Ericsson, and Starent Networks have already been awarded major contracts from Verizon Wireless, while in Japan NTT DOCOMO and Ericsson (News - Alert) are supporting NEC and Fujitsu. In Scandinavia, operators such as TeliaSonera, Tele2 and Telenor appear to be finalizing Huawei as a preferred vendor, and TeliaSonera has confirmed that one of its vendors is Ericsson.
Another report from a different organization claimed that major operators such as Verizon Wireless and NTT DoCoMo were still committed to launching LTE in 2010, but because the economy will still be tough then, that factor could hit rollout schedules and takeup, and that the LTE scenario should improve by 2012.
“There may be a new opportunity here for Nokia (News - Alert) Siemens Networks,” said Manjaro. “Nortel was early to market with LTE base station equipment, but its bankruptcy preempted that market push. With NSN’s acquisition of Nortel’s (News - Alert) LTE assets, it is well placed to benefit from that early market presence.”

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Vivek Naik is a contributing editor for TMCnet. To read more of Vivek's articles, please visit his columnist page.

Edited by Michael Dinan


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