Network infrastructure spending positions carriers for 4G services but proves competitive for vendors

2008 is delivering mixed results for mobile infrastructure vendors such as Nokia Siemens Networks, Ericsson, and Alcatel-Lucent. "Spending on radio access network infrastructure equipment is expected to grow just 3.4% in 2008 to US$53.9 billion by the end of the year," says ABI Research Asia-Pacific vice president Jake Saunders. "But while a number of mobile operators such as Vodafone and Orange have reported reductions in end-user mobile services spending, the need to upgrade key elements of the network is starting to build and is expected to become even more pressing in 2009."

ABI Research forecasts the number of base stations to grow from 3.6 million in 2007 to 5.2 million in 2013. In developed markets, mobile operators are looking to cut their underlying operating costs and secure competitive edge through the deployment of 3.5G technologies such as HSDPA and CDMA2000 Rev A. Furthermore the introduction of mobile Internet devices such as RIM's Bold, Nokia's E71, Samsung's Omnia, and Apple's iPhone is boosting web-based traffic and email access. Mid-tier devices are also contributing to congestion as they stimulate the adoption of messaging bundles, games and music downloads. "Music, games and messaging are boosting the amount of network traffic," notes senior analyst Nadine Manjaro. "Hence the need for network upgrades."

Carriers are looking further afield too. While such 3.5G technologies are helping carriers to roll out new applications and services, they are well aware that 4G technologies such as LTE and WiMAX will be needed to deliver any fundamental shift in the underlying cost of delivering Mbps.