W-CDMA and CDMA2000 infrastructure markets up, GSM down

Market Wire, March, 2007

As service providers around the globe install and upgrade networks to handle the growing number of mobile subscribers, demand for radio access network (RAN) equipment also climbs, with overall unit shipments up 8% in 2006, says Infonetics Research in its latest Radio Access Network Equipment and Subscribers report.

However, overall RAN revenue is down for the year, due to a 14% drop in the massive GSM equipment market in 2006, evidence that more providers are choosing to replace their aging 2G GSM networks with faster W-CDMA and CDMA/CDMA2000 3G networks that can accommodate more subscribers.

RAN equipment manufacturers will also face pricing pressure in coming years, with the average price per unit for GSM, W-CDMA, and CDMA/CDMA2000 coming down significantly by 2010.

"GSM has held up amazingly well so far considering the number of carriers migrating away from it. GSM is a fast, cheap, mature technology suitable for emerging markets, so we're still seeing new GSM rollouts in emerging countries in Asia, Africa, and South America that do not have ad hoc PSTN infrastructure. Unlike with W-CDMA upgrades, which require a new core network, recouping the cost of a GSM network is pretty much guaranteed," said Richard Webb, directing analyst at Infonetics Research.

"Still, GSM equipment revenue will decline rapidly through 2010, while W-CDMA and CDMA/CDMA2000 revenue will grow, because carriers are pushing to deliver higher speed data, multimedia, video, and mobile TV services over 3G networks in competitive developed markets," Webb added.

Market Highlights

--  Worldwide RAN equipment revenue dipped 2% to just over $10.0 billion
    in 4Q06, and is down 2% to $41.6 billion in 2006
--  Overall base transceiver station (BTS) revenue is up 14% in 2006; base
    station controller (BSC) revenue is down considerably
--  Worldwide W-CDMA equipment revenue is up 41% and CDMA/CDMA2000
    equipment revenue is up 7% in 2006
--  The number of mobile subscribers grew 26% to 2.5 billion in 2006, and
    is forecast to grow to almost 3.6 billion in 2010
--  Asia Pacific accounts for 47% of worldwide mobile subscribers
--  Asia Pacific accounts for 38% of worldwide RAN equipment revenue in
    2006, EMEA 29%, North America 17%, and CALA 16%
--  Ericsson, Alcatel-Lucent, Nokia, and Siemens together account for over
    70% of the worldwide RAN equipment market in 2006
    

Infonetics' RAN report tracks mobile subscribers (split by 2G/2.5G GSM, 2G/2.5G CDMA, 3G W-CDMA, and 3G CDMA2000), and BTSs and BSCs (split by GSM, CDMA/CDMA2000, W-CDMA, microcell, and picocell).

Forecasts are updated quarterly for all regions. Companies tracked include Alcatel-Lucent, Ericsson, Huawei, LG, Motorola, Nokia, Nortel, Samsung, Siemens, ZTE, and others.

Download sample data at www.info.infonetics.com . For sales, contact Larry Howard, vice president, at larry@infonetics.com or 1 (408) 583-3335.

Infonetics Research ( www.infonetics.com ) is the premier international market research and consulting firm specializing in data networking and telecom. Services include market share and forecasting, end-user survey research, service provider survey research and capex analysis.

Press Contact: Richard Webb Directing Analyst, Wireless Infonetics Research 1 408-583-3369 VoIP line 44 (0) 1689-851-618 Email Contact