Press release:  Future looks uncertain for mobile equipment vendors

February 2007 – It seems that mobile equipment vendors are facing an uncertain future, according to two new reports, Network Evolution from 2007 to 2012: HSPA+, LTE, WiMAX and femtocells and 3G Infrastructure Sharing: the future for mobile networks produced by Sound Partners and published by Analysys.

"Mobile equipment vendors may be depending on 3G enhancements such as Long Term Evolution (LTE) to secure the future of their businesses, by enabling mobile operators to offer network-intensive services such as broadband services to the home and mobile TV services," said Dr Alastair Brydon, co-author of the reports. "However, our modelling shows that LTE may not be necessary at all."

The lack of a compelling business case for 3G network enhancements, combined with an increase in network sharing, will have a profound impact on the cellular network infrastructure market.

Key findings from the new reports include the following:

• Mobile operators may not need the capacity gains offered by LTE, because mobile services will increasingly be delivered using alternative technologies, such as femtocells and broadcasting networks.
• LTE will not be widely available before 2010, which is too late to play a significant role in the provision of broadband services to homes and businesses, because of the widespread availability of low-cost DSL and cable services.
• T-Mobile and 3 in the UK announced in December 2007 that they had entered into a network sharing agreement. This announcement is indicative of a trend that is set to spread as operators struggle to expand 3G coverage and make funds available for alternative investments.

"3G network evolution is about to change course", says Dr Mark Heath. "With doubts about the viability of LTE, the move towards network sharing couldn't come at a worse time for network infrastructure vendors. It is imperative that vendors increase market share to compensate for the future consolidation of 3G networks."

3G Network Evolution from 2007 to 2012 examines the evolution of 3G networks in order to identify realistic timescales for, and the capabilities of, 3G enhancements. The report also defines the most effective deployment strategies for mobile operators. It considers key 3G enhancements, including HSUPA, HSPA+, LTE and femtocells, quantifying the services and customer usage profiles that can realistically be supported. The complementary report 3G Infrastructure Sharing considers the strategic impact of extensive network sharing on mobile operators, equipment vendors, regulators and other market players.