×

The construction of LTE networks is a key driver for development of mobile equipment market. J’son & Partners Consulting presents main results of the research of market tendencies and development in the sphere of global wireless communication infrastructure in 2012-2017.

 

Key market drivers and development barriers

The number of active SIM card in the world as of 3Q 2013 was 6,6 bln pcs and will be over 8,4 bln pcs in 2017 according to Ericsson forecasts. 3G and 4G/LTE networks develop rapidly and the global revenues from mobile data transfer is expecting to reach 200 bln USD. The traffic of data transfer is growing mainly because of smartphones’ and TabletPCs’ popularity, increasing network throughput rate. In order to fill the fast growing demand on mobile data transfer and services, mobile operators will have to invest in wireless communication infrastructure. Mobile traffic is growing much faster than operators’ revenues and costs for traffic unit are constantly decreasing. The implementation of LTE will decrease twice costs for data transfer for operators in comparison with 3G/HSPA networks. Such new technologies as LTE are also helping to slow down the subscribers’ churn by provision new services and increase the level of customers’ satisfaction. Operators widely use femtocells, unload mobile traffic via Wi-Fi, start use WiMAX and TDD-LTE as backhaul for small cells, etc. All these factors are drivers for equipment market development in these market segments.

 

On the other hand there are problems in the process of transition to the new generation of networks:

 

       deficit of available spectrum in most regions;
       there is no fixed architecture for provision of voice services in LTE and heterogeneous networks ;¹;
       expectance of investments’ payback in 3G.

 


  ¹Wireless networks that include the classic base stations (macrocells), small cells (femto-, pico- & microcells) and WI-FI points of carrier class.

 

However, the investments in 4G infrastructure will keep growing till 2017, at this point the branch will pass the first step of LTE commercialization, early deployment of LTE Advanced (LTE-A) networks and will enter the “era” of heterogeneous networks:

 

 

In October 2012, Russian company Skartel (trade mark Yota) accomplished first world test of LTE Advanced on commercial network in Moscow. First in the world commercial network LTE-A was launched in June 2013 by South Korean operator – SK Telecom. According to GSA data, as of December 2013, 4 operators in the world launched LTE Advanced (3 in South Korea and 1 – «EE» - in UK). Around 20 operators are testing and implementing this technology.

 

The commercialization of heterogeneous networks is expecting in 2015-2017. They will provide “smooth” (for subscribers) roaming in the network and mobile management between macrocells, small cells and Wi-FI points. The market of LTE small cells will overstep 3G small cells already at the end of 2014.

 

LTE-projects in Russia

Russian mobile operators continue investing in mobile network infrastructure, as well in LTE networks deployment. According to licence requirements and terms, “Big 4” operators (MTS, “Megafon”, “VimpelCom”, “Rostelecom”) should invest in 4G deployment annually until 2019 not less than 15 bln RUB.

 

MTS is planning to invest in LTE construction in Russia around 40 bln RUB in 2013 – 2014. MTS and Nokia Siemens Networks (NSN) announced 3 year contract for construction and maintenance of LTE network in Moscow region and Central federal region in Russia (contract for 200 mln.USD). Ericsson will construct LTE in Privolzhsky, Siberia, the Urals and Southern Federal districts, and also will be the supplier in North-West Federal region. It is expected not less than 10 thousand base stations for the first round of 4G network deployment by Ericsson. The construction of 4G in North-West federal region is happening under the 3 year contract, concluded in 2013 between MTS and Samsung Electronics. MTS’s LTE networks are operating currently in Moscow, Moscow region, Tambov, Amur, Rostov and Kaluga regions, Zabaykalsky Krai, Kirov region, Republic of Udmurtia, the Republic of North Ossetia, Pskov region, Khabarovsk, Novosibirsk and Krasnoyarsk Krai.

 

MTS is planning to launch 4G in 2014 in Saint-Petersburg and region, Arkhangelsk region and Republic of Komi.

 

“VimpelCom” had chosen the contractors for LTE construction in 6 licensed regions: NSN, Huawei and ZTE. In Moscow the network is constructed on the base of Ericsson’s equipment.

 

LTE networks Yota/”Megafon” are constructing on Huawei’s equipment, NEC equipment is also used. “Skartel” purchased 10 LTE microcells from CJSC “NEK Neva Communication Systems”. Microcells support the technology of shared use of network radio access (Multi-Operator Core Network, MOCN), SON functions (self-organized networks) and HetNet (heterogeneous networks). Microcells have been purchased by “try and buy” system (tested first and then had been paid).

 

“Rostelecom” held a tender for LTE construction with installation of 658 base stations in 7 licensed regions (Nenetsky and Chukotsky Autonomous Areas, the Jewish Autonomous Region, Sakhalin Oblast, Republic of Khakassia, Khanty-Mansi Autonomous District and Republic of North Ossetia - Alania). Price bid opening was 2 bln RUB, the final price was 1,2 bln RUB. Russian “Inline Telecom Solution” had been chosen as the contractor for LTE turnkey construction. The network is constructing on Huawei and Ericsson equipment. “Rostelecom” had also launched LTE network in Krasnodarsky region including the territory of Gorny and other territories, close to the place where Olympic Games will be held (tender was held in 2011).

 

“Osnova Telecom” announced about the technological readiness of TD-LTE network in 18 from 40 cities (where the construction is in process) in November 2013. The network consists of 1700 base stations, the total volume of investments is over 6 bln RUB (the deployment of network’s infrastructure in 40 cities, over 2000 base stations). The company had planned total investments around 2-3 bln. RUB for LTE construction in 165 cities in Russia (based on Alcatel-Lucent and Huawei equipment).

 

“Vainah Telecom” signed an agreement on equipment supply for LTE-network core and 180 base stations (have been built at 2013, costs were 300 mln.RUB). 200 base stations were planned to construct in the regional centers and cities in 1Q2013, now the timeline is 2Q2014. The company is planning to cover with LTE network the entire plain, partly the foothills and mountainous territory of the Chechen Republic. The equipment that had been used: LLC “Center of wireless technologies”, subsidiary of CJSC “Research-production firm “Mikran”” and Nokia Siemens Networks (NSN).

 

The implementation of technological neutrality could be an additional driver for LTE equipment market development. National Radio Spectrum Commission had legalized the use of GSM-frequencies 900/1800 MHz for LTE deployment and imposed requests for covering urban areas with small cells.²

 


 ²Operators that are prolonging or receiving licenses for the use of frequencies in the bands less than 1GHz – will be obliged to cover with network all urban areas with over 1000 population, in the band 1 – 2 GHz – with population over 2000, 2,2 – 3 GHz – with population from 10 000,http://minsvyaz.ru/ru/news/index.php?id_4=44210

 

 

Forecasts

Ericsson and Huawei are the leading vendors on the wireless infrastructure market. They have large subscribers’ bases, consisting from first level of operators (Tier 1). Nokia Siemens Networks and Alcatel-Lucent are following them up. According to preliminary data of TBR, Samsung is one of five leading vendors of the LTE infrastructure industry with market share dynamics from 7% in 2012 to 9% in 2013. Mind Commerce forecasts stable state of global operators’ expenditures on wireless infrastructure until 2017: in 2013 – 2105 will be a peak period – around 53 bln USD that will be decreasing until 50 bln USD in 2017:

 

The highest growth rates of wireless network infrastructure in 2012 and 2017 are expecting in Asia Pacific region (APR) – market will grow for 5% and will be at the point of 29 bln USD till 2017:

 

 

Supply of macrocells will be decreasing in 2012 – 2017 (CAGR - 2%) and the number in 2017 will reach 1,4 mln. cells. Nevertheless, the revenues of macrocells’ supplies will grow (CAGR – 1%) and will reach 1, 4 bln. USD till 2017.

 

Wi-Fi infrastructure of carrier class and small cells are expecting to be the most fast growing market’s directions. Wi-Fi infrastructure of carrier class will grow with an average annual growth rate in 62% till 2017 and at the end of forecasted period will overcome 12 mln. access points:

 

 

Revenues from supplies of Wi-Fi carrier class infrastructure will be increasing with an average annual growth rate of 50% and will reach 4,5 bln USD till 2017. Smallcells’ supplies will reach 6 mln. cells at 2017 and CAGR will be 84%:

 

 

The average annual growth rate of revenues from smallcells’ supplies will be 62% and will reach 4 bln USD till 2017. Femtocells will dominate on the market until 2017 (5 mln. femtocells will be supplied). Picocells market is forecasted as 1 bln USD, femtocells as 3 bln (CAGR - 71%, 2012-2017). Microcells market will lose its position per 16% yearly and will be only 20 mln. USD. Technological market structure will change – small cells LTE will be the key. The supplies till 2017 is forecasted at the number of 3 bln USD, it means small cells will take ¾ of the total market ($).

 

Detailed results of the research are presented in the full version of the Report: «Wireless communication infrastructure. Tendencies and market development perspectives (2G, 3G, LTE, WiMAX, Wi-Fi), 2012-2017» (84 p.)

 

   Target audience: telecom operators, developers and suppliers of wireless communications infrastructure

 

Content

Resume
1. Main technologies of wireless networks
       1.1. GSM
       1.2. W-CDMA
       1.3. HSPA
       1.4. TD-SCDMA
       1.5. CDMA-2000/EV-DO
       1.6. WiMAX
       1.7. LTE
       1.8. Wi-Fi
       1.9. Small cells
              1.9.1. Femtocells
              1.9.2. Picocells
              1.9.3. Microcells
              1.9.4. Metrocells
       1.10. Segmentation by infrastructure: Radio access networks and Core network
              1.10.1. Radio access network (RAN)
              1.10.2. Core Network
2. Promising business-case of the wireless network infrastructure
       2.1. Key market drivers
              2.1.1. Increasing demand on mobile broadband access
              2.1.2. Decrease in total cost of ownership (TCO)
              2.1.3. Increase in subscriber’s base of mobile operators
              2.1.4. Increase in subscribers’ satisfaction
              2.2.1. The availability of the spectrum
              2.2.2. Architecture of voice transfer and availability of devices
              2.2.3. The limitation of capital expenditures
       2.3. The creation chain of add value of wireless network infrastructure
       2.4. Road map of wireless network infrastructure, 2010 – 2017
              2.4.1. 2010 – 2012: LTE networks’ commercialization
              2.4.2. 2013 – 2014: First tests and launch of LTE Advanced networks
              2.4.3. 2015 – 2017: «Era» heterogeneous networks – massive integration of macrocells, small
                        cells and WI-FI carrier class
3. Case studies of investments in wireless network infrastructure
       3.1. AT&T
       3.2. NTT DoCoMo
       3.3. Telus
       3.4. Thai AIS
       3.5. Oi Brazil
       3.6. China Mobile
       3.7. Everything Everywhere
       3.8. Russian operators
              3.8.1. MTS
              3.8.2. Vimpelcom
              3.8.3. Rostelecom
              3.8.4. Alternative scenario
4. Overview of vendors
       4.1. Matrix of vendors ranking
       4.2. The range of products and vendors’ strategies
              4.2.1. Ericsson
              4.2.2. Huawei
              4.2.3. Nokia Siemens Networks (NSN)
              4.2.4. Alcatel-Lucent
              4.2.5. ZTE
              4.2.6. Samsung
              4.2.7. Cisco
              4.2.8. Alvarion
              4.2.9. NEC
              4.2.10. Fujitsu
              4.2.11. Datang Mobile
              4.2.12. Acme Packet
              4.2.13. Airvana
              4.2.14. Aptilo Networks
              4.2.15. Aruba Networks
              4.2.16. Contela
              4.2.17. Ip.access
              4.2.18. Juniper Networks
              4.2.19. Kineto Wireless
              4.2.20. Motorola Solutions
              4.2.21. Ruckus Wireless
              4.2.22. Ubee-AirWalk
              4.2.23. Ubiquisys
5. Market analysis and forecasts
       5.1. Global market of wireless network infrastructure (WNI), 2010–2017
              5.1.1. Costs on WNI in the world, 2010 – 2017
              5.1.2. Costs on WNI in the world, by technologies, 2010 – 2017
              5.1.3. The comparison of costs of RAN and Core Network, 2010 – 2017
              5.1.4. The comparison of costs on WNI, by regions, 2010 – 2017
       5.2. Global market of macro cells, 2010 – 2017
              5.2.1. Global supplies of macrocells, $, cell, 2010 – 2017
              5.2.2. Global supplies of macrocells, $, cell, by technologies, 2010 – 2017
              5.2.3. Regional comparison of costs on macronetworks RAN, 2010 – 2017
       5.3. Expenditures on wireless network infrastructure, by world regions, 2010 – 2017
              5.3.1. Asia-Pacific region
              5.3.2. East Europe
              5.3.3. Latin and Central America
              5.3.4. Middle East and Africa
              5.3.5. North America
              5.3.6. West Europe
       5.4. Global market of Wi-Fi carrier class, 2010 – 2017
              5.4.1. Global supplies of Wi-Fi carrier class equipment, $, pcs., 2010 – 2017
              5.4.2. Global supplies of access points and controllers of Wi-Fi carrier class, 2010 – 2017
              5.4.3. Unload via Wi-Fi and standard Wi-Fi access points, 2010 – 2017
              5.4.4. Regional market overview, 2010 – 2017
       5.5. Global market of small cells, 2010 – 2017
              5.5.1. Global supplies of microcells, $, cell, 2010 – 2017, 2010 – 2017
              5.5.2. Global supplies of microcells by types of cells, $, cell, 2010 – 2017
              5.5.3. Global supplies of femtocells, $, cell, 2010 – 2017
              5.5.4. Global supplies of picocells, $, cell, 2010 – 2017
              5.5.5. Global supplies of microcells, $, cell, 2010 – 2017
              5.5.6. Global smallcells’ supplies, $, cell, by technologies, 2010 – 2017
              5.5.7. Regional market overview, 2010 – 2017
Annex. List of companies mentioned in the report

List of tables

Table 1. Matrix of WCI RAN vendors
Table 2. Matrix of vendors of network core

List of illustrations

Fig. 1. The creation chain of add value of wireless network industry
Fig. 2. Road map of wireless communication industry, 2010-2017
Fig. 3. Global market of wireless networks infrastructure, mln. USD, 2010-2017
Fig. 4. Global market of wireless infrastructure, by technologies, mln.USD, 2010-2017
Fig. 5. Global market of wireless infrastructure, by technological generations (2G,3G,4G), mln. USD, 2010-2017
Fig. 6. Global market of radio equipment and equipment for backbone networks, mln.USD, 2010-2017
Fig. 7. Global market of wireless networks infrastructure, by regions, mln.USD, 2010-2017
Fig. 8. Global suppliers of macrocells, thousand cells, 2010 - 2017
Fig. 9. Global market of macrocells, mln USD, 2010-2017
Fig. 10. Global market of macrocells by technologies, thousand cells, 2010-2017
Fig. 11. Global market of macrocells by technologies, mln. USD, 2010-2017
Fig. 12. Global market of macrocells, by technological generations, thousand cells, 2010-2017
Fig. 13. Global market of macrocells, by technological generations, mln. USD, 2010-2017
Fig. 14. Global market of macrocells by regions, thousand cells, 2010-2017
Fig. 15. Global market of macrocells by regions, mln. USD, 2010-2017
Fig. 16. Market of wireless infrastructure in ATP, mln. USD, 2010-2017
Fig. 17. Macrocells supplies in ATP, thousand cells, 2010-2017
Fig. 18. Macrocells supplies in ATP, mln USD, 2010-2017
Fig. 19. Market of wireless infrastructure in East Europe, mln USD, 2010-2017
Fig. 20. Market of macrocells in East Europe, thousand cells, 2010-2017
Fig. 21. Market of macrocells in East Europe, mln. USD, 2010-2017
Fig. 22. Wireless infrastructure market in Latin and Central America, mln. USD, 2010-2017
Fig. 23. Market of macrocells in Latin and Central America, thousand, 2010-2017
Fig. 24. Market of macrocells in Latin and Central America, mln. USD, 2010-2017
Fig. 25. Wireless infrastructure market in Africa and Middle East, mln. USD, 2010-2017
Fig. 26. Wireless infrastructure market in Africa and Middle East, thousand, 2010-2017
Fig. 27. Market of macrocells in Africa and Middle East, mln. USD, 2010-2017
Fig. 28. Wireless infrastructure market in North America, mln. USD, 2010-2017
Fig. 29. Market of macrocells in North America, thousand, 2010-2017
Fig. 30. Market of macrocells in North America, mln. USD, 2010-2017
Fig. 31. Wireless infrastructure market in West Europe, mln. USD, 2010-2017
Fig. 32. Market of macrocells in West Europe, thousand, 2010-2017
Fig. 33. Market of macrocells in West Europe, mln. USD, 2010-2017
Fig. 34. Global market of infrastructure Carrier Wi-Fi, thousand, 2010-2017
Fig. 35. Global market of infrastructure Carrier Wi-Fi, mln. USD, 2010-2017
Fig. 36. Global market of access points and controllers, thousand, 2010-2017
Fig. 37. Global market of access points and controllers, mln. USD, 2010-2017
Fig. 38. Global market of operators’ WI-FI points for traffic unload and standard access points, thousand, 2010-2017
Fig. 39. Global market of operators’ WI-FI points for traffic unload, thousand, 2010-2017
Fig. 40. Global market of standard Wi-FI points, thousand, 2010-2017
Fig. 41. Global market of standard access points and points for traffic unload, mln. USD, 2010-2017
Fig. 42. Global market of standard Wi-FI access points for traffic unload, mln. USD, 2010-2017
Fig. 43. Global market of standard Wi-FI access points, mln. USD, 2010-2017
Fig. 44. Global market of equipment Carrier Wi-Fi, thousand, 2010-2017
Fig. 45. Global market of equipment Carrier Wi-Fi, mln USD, 2010-2017
Fig. 46. Global market of small cells, thousand, 2010-2017
Fig. 47. Global market of small cells, mln. USD, 2010-2017
Fig. 48. Global market of small cells, by types of cells, thousand, 2010-2017
Fig. 49. Global market of small cells, by types of cells, thousand USD, 2010-2017
Fig. 50. Global market of femtocells, thousand, 2010-2017
Fig. 51. Global market of femtocells, mln.USD, 2010-2017
Fig. 52. Global market of picocells, thousand, 2010-2017
Fig. 53. Global market of picocells, mln.USD , 2010-2017
Fig. 54. Global market of microcells, thousand, 2010-2017
Fig. 55. Global market of microcells, mln.USD, 2010-2017
Fig. 56. Global market of small cells, by technologies, thousand, 2010-2017
Fig. 57. Global market of small cells, by technologies, mln.USD, 2010-2017
Fig. 58. Global market of small cells, by regions, thousand, 2010-2017
Fig. 59. Global market, by regions, mln.USD, 2010-2017