Test equipment vendors need to focus on smooth upgrades to 3G

April 26, 2005

With the rapid proliferation of wireless technology, telecom carriers are deploying 3G networks to tap the growing demand for new age wireless services. In moving up the technology chain from 2G to 3G protocol, the most pressing issue for a network operator is to ascertain a terminal's capability to handle technology up-drive while supporting multiple end-user applications.

Test equipment vendors, in helping address the challenges of supporting dual technology and data convergence, are using the opportunity to develop a single measuring instrument that supports multiple standards, interfaces, and protocols.

New analysis from Frost & Sullivan, World Wireless Communications Test Equipment Markets, reveals that revenue in this market totaled $1,910.8 million in 2004 and projects to grow to $4,451.4 million in 2011.

The promise of enhanced multimedia services, online gaming, faster wireless Internet access, and cheaper voice calls has increased consumer expectation from 3G services. To capitalize and exploit this business opportunity, 3G service providers, along with network equipment manufacturers (NEMs) and handset vendors, will have to assure quality of service (QOS) for consumers.

"However, owing to issues related to co-existence of 2G and 3G technology and handover conditions in a multi-carrier environment, stability of networks and services is of major concern," notes Frost & Sullivan Industry Analyst Karthik. R. "This presents a challenge as well as an opportunity for test equipment vendors to design and develop products that assure the smooth adaptation and flow of 3G services."

With the continuous evolution of wireless technology, the numbers of service providers shifting their focus to wireless services and carriers operating in the 3G spaces are climbing. Therefore, in a multi-carrier environment, vendors will need to design their equipment to handle multi-carrier tests. Although this poses a serious functional handicap, consolidations among service providers worldwide expects to dilute this challenge in the end.

Concerning base stations, 3G base stations are unique, since they are smaller and are required in larger numbers. Subsequently, the price that a service provider pays for such base stations is less because of the volume count.

Therefore, the ability to deliver test equipment at a high price-performance feature point expects to be a key differentiator among vendors, especially since the majority of the base station tests happen at the radio frequency (RF) parametric level and the test devices deployed for these purposes in most cases are bench-top general purpose equipment.

The emergence of low-cost wireless fidelity (Wi-Fi) services and their increasing demand are causing much concern among 3G service providers and test equipment vendors alike. With WLAN operating in the unlicensed band, demand for test equipment to ensure QoS has been limited, unlike the case of 3G services where QoS testing is essential.

However, it is unlikely that Wi-Fi hotspots will eliminate the need for a wide area solution. Consumers could quickly become addicted to streaming music and downloading games and short videos, but will want to carry out these activities wherever they happen to be - not just in airports, hotels, and coffee houses.

Among the competing wireless standards, code division multiplex access (CDMA) is gaining in popularity as a standard capable of delivering high rates for data. There has been strong adoption of the service in South Korea and Japan and growth has been equally high in important North American markets. With the introduction of CDMA2000 1x services in India and Australia, the demand for test equipment in this segment expects to soar in the short term.

Nevertheless, global system for mobile communication (GSM) standards is likely to remain the strongest driver for growth and demand of wireless test equipment.

"GSM is the most prevalent wireless standard in the world and further moves to adopt GSM standards along the evolution path to 3G by North American telecom carriers have opened up opportunities for test equipment vendors," says Karthik. "With market expectations of greater spread of 2.5G services in the Asia Pacific region and the eventual rollout of 3G wideband CDMA (WCDMA) networks, this market shows strong growth potential for test equipment."