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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 (http://www.instat.com). 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 $31 billion dollars, 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. 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.
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