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Wireless infrastructure spending up 9% in 2011

Posted: 28 Dec 2011     Print Version  Bookmark and Share

Keywords:wireless  networks  infrastructure  market report 

Global spending on infrastructure for wireless networks will reach Rs.2.17 lakh crore ($42.5 billion) in 2011, according to IHS. This is a 9.1 per cent increase over 2010's Rs.1.99 lakh crore ($38.98 billion). "This result comes after a 7.2 per cent decline in 2009 and flat performance in 2010."

IHS expects that spending by wireless carriers worldwide on wireless infrastructure equipment will stay low at single-digit rates until 2015. The market by then is expected to be worth over Rs.2.30 lakh crore ($45.1 billion).

"Throughout the world carriers are seeing the value of upgrading their wireless networks," said Jagdish Rebello, director, communications and consumer electronics, IHS. "Despite significant economic headwinds, demand for higher data rates is compelling carriers to invest in new equipment, driving growth in infrastructure gear sales in 2011 and beyond."

The expansion of the wireless infrastructure market in 2011 is fuelled by carriers around the world investing in 3.5G/3.75G network upgrades, and the migration to 4G long term evolution (LTE) by some carriers in Europe, Japan, the United States and South Korea, IHS report said.

All of the carriers in the developed nations are focusing on investing in incremental network technology upgrades to 3.5G, 3.75G and 3.9G technologies. However, several carriers are going further and have commenced trials and are beginning to deploy and commercially operate 4G LTE networks.

Meanwhile, carriers in many of the emerging markets also are upgrading their 2.5G networks to 3.5G technologies and offering new data-centric services to customers. To be sure, carriers are not immune to the global economic downturn in the emerging markets of Latin America, South Asia and Africa, and the pace of investments in networking infrastructure has been slower than in previous years.

But as data traffic has grown on their networks, many carriers have started to roll out 3G/3.5G networks. IHS expects that carriers in these regions of the world will move to transition their networks to 3.75G/3.9G technologies during the next few years.

"While 3.5G/3.75G is still the dominant air interface technology in terms of the mobile infrastructure market, the market for 4G LTE mobile infrastructure is gaining momentum."

Beginning in H2 09, the 4G LTE deployment started to gather momentum in 2010 with approximately 160 mobile network operators announcing their intent to launch, trial, deploy or commercially operate LTE technologies by the end of the year. To date, the number of carriers has grown to slightly less than 200 operators globally.

IHS expects that LTE soon will be the dominant 4G technology, but it will require significant infrastructure capital investments, given that existing 3G base stations will not be compatible without LTE or if significant modifications are not made.

Beginning in 2012, factory revenue for 3G/3.5G wireless technologies will start to decline as carriers migrate to 4G LTE. Starting in 2013, 4G will account for the largest portion of the global wireless infrastructure market, increasing to approximately Rs.1.84 lakh crore ($36.1 billion) in 2015.

For more statistics and forecasts, click here.

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