Here is an unhappy news for wireless infrastructure providers. In-Stat research report foresees a 22% decline in revenue in 2009 following a period of high-growth, especially 2005-07 witnessed a robust growth in worldwide cellular base station sales to network operators. One of the primary factors that could be attributed to this drastic reduction in growth is the dilly-dallying of 3G network rollouts in some part of the world. This is a factor also from India as now only our Union Telecom Ministry and Finance Ministry have arrived at a consensus for a base price for spectrum auction in India, with the two ministries having agreed on a floor price of Rs 4,040 crore for the auction of 3G spectrum on June 20.
Declining base station shipments worldwide is one clear reason for this 22% decline in revenue. Also, intense price battle from Chinese base station manufacturers ZTE and Huawei have fueled reduction of base station price, resulting in reduced margin and reduced revenue. Network operators who face the challenges of declining ARPU also demand that infrastructure manufacturers decrease cost.
Future Growth
The volume of base station shipment actually depends on how much data and voice usage is happening worldwide for operators, how many subscribers are there, the land area covered, and the next generation technologies coming out to the market. If a dramatic growth in these areas are witnessed, manufacturing of next generation base stations and shipments can repeat the golden era.
“As voice revenue per subscriber drops, base station demand depends on data growth,” says Allen Nogee ( inset ), In-Stat analyst. “Operators have spent billions on 3G, and are reaping the benefits of increased data revenue. Operators are so worried about not having the fastest wireless network, that they will spend billions more on LTE and WiMAX, though not at the spending pace seen with 3G.”
Though 3G networks will fuel the base stations growth, the fast growth of GSM will contribute more to the base station market growth. As we know, crores of people in our country, and neighbouring country China, and Africa are buying handset for the first time.
While already there are about 300 mn subscribers, more subscribers from these big regions will enormously drive the growth of base station market in the near future. Apart from this the next big push will be from LTE for the market growth.
Major findings of the report:
Base stations enabled for LTE will exceed 166K by 2013.
Deployed WCDMA base stations will exceed one million by 2012.
New LTE base station revenue in Eastern Europe will be nearly $700 million in 2013.
The last unit shipments of CDMA2000 1X RTT base stations will occur in 2009, with less the 1,200 new base stations being deployed. All future CDMA base station shipments will be EV-DO.
Shipments of new GSM base stations should remain strong for a few more years.
kannan@cybermedia.co.in
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