Subject: [NEXTEL-1] Lack of high speed data hurting base station sales

From: [email-masked]
Date: Thu, 02 Oct 2003 11:48:07 -0400

The year 2003 has been a very trying year for cellular service providers deploying
infrastructure, especially for those that have invested large amounts for 3G
licenses and equipment, reports In-Stat/MDR. Without the drive of high-speed data
demand, the trend in units and overall base station revenue is down. Last year,
total cellular base station revenue was over US$31 billion, and with continuing
price pressures, spectrum efficiency increases and slowing subscriber growth
rates, the high-tech market research firm forecasts this same revenue to be almost
half that in 2007.

"Unfortunately, cellular providers have assumed that mobile data would emerge from
fixed-line data in the same way that
mobile voice services emerged from fixed-line voice," said Allen Nogee, a
principal analyst with In-Stat/MDR. "While
voice and mobility naturally fit together, data and mobility don't." However,
In-Stat/MDR finds that the number of cellular
subscribers continues to grow, and infrastructure is getting better and cheaper.
Still, for 3G to be successful, even as a voice technology, handsets must be
reliable, and cost effective. While CDMA2000 1X handsets have met this challenge,
UMTS handsets have fallen short here by a wide margin. It will take several years
for UMTS handset prices to drop to a reasonable point, and for other UMTS handset
issues to be resolved. By 2006, UMTS should be a viable solution, whereby
operators will deploy UMTS without any second thoughts.

In-Stat/MDR has also found that while cancellations of UMTS base stations have
decreased the number of UMTS base stations that will be shipped this year, a large
number of UMTS base stations will still be shipped and installed.  In-Stat/MDR
believes that when the smoke clears, more than 40,000 UMTS base stations will have
been shipped this year.
From 2002 to 2007, the total number of new base stations sold every year is
forecast to decrease from about 230,000 in 2003 to 163,000 in 2007, a CAGR of -7%.

Total new worldwide base station revenue is forecast to decrease at a greater rate
than the units themselves. From 2002 to 2007, total new base station revenue is
forecast to decrease at a CAGR of -12.8%. For some types, such as GSM, this
decline will even be much greater.

http://www.cellular-news.com/story/9842.shtml

Posted to the site on 02-Oct-03

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