Europe : As service providers around the globe install and upgrade networks to handle the growing number of mobile subscribers, demand for radio access network (RAN) equipment also climbs, with overall unit shipments up 8% in 2006, says Infonetics Research in its latest report.

However, overall RAN revenue is down for the year, due to a 14% drop in the massive GSM equipment market in 2006, evidence that more providers are choosing to replace their aging 2G GSM networks with faster W-CDMA and CDMA/CDMA2000 3G networks that can accommodate more subscribers.

RAN equipment manufacturers will also face pricing pressure in coming years, with the average price per unit for GSM, W-CDMA, and CDMA/CDMA2000 coming down significantly by 2010.

"GSM has held up amazingly well so far considering the number of carriers migrating away from it. GSM is a fast, cheap, mature technology suitable for emerging markets, so we're still seeing new GSM rollouts in emerging countries in Asia, Africa, and South America that do not have ad hoc PSTN infrastructure. Unlike with W-CDMA upgrades, which require a new core network, recouping the cost of a GSM network is pretty much guaranteed," said Richard Webb, directing analyst at Infonetics Research.

"Still, GSM equipment revenue will decline rapidly through 2010, while W-CDMA and CDMA/CDMA2000 revenue will grow, because carriers are pushing to deliver higher speed data, multimedia, video, and mobile TV services over 3G networks in competitive developed markets," Webb added.

Market Highlights

• Worldwide RAN equipment revenue dipped 2% to just over $10.0 billion in 4Q06, and is down 2% to $41.6 billion in 2006
  
• Overall base transceiver station (BTS) revenue is up 14% in 2006; base station controller (BSC) revenue is down considerably
• Worldwide W-CDMA equipment revenue is up 41% and CDMA/CDMA2000 equipment revenue is up 7% in 2006
• The number of mobile subscribers grew 26% to 2.5 billion in 2006, and is forecast to grow to almost 3.6 billion in 2010
• Asia Pacific accounts for 47% of worldwide mobile subscribers
• Asia Pacific accounts for 38% of worldwide RAN equipment revenue in 2006, EMEA 29%, North America 17%, and CALA 16%
• Ericsson, Alcatel-Lucent, Nokia, and Siemens together account for over 70% of the worldwide RAN equipment market in 2006

Infonetics' RAN report tracks mobile subscribers (split by 2G/2.5G GSM, 2G/2.5G CDMA, 3G W-CDMA, and 3G CDMA2000), and BTSs and BSCs (split by GSM, CDMA/CDMA2000, W-CDMA, microcell, and picocell).

Forecasts are updated quarterly for all regions. Companies tracked include Alcatel-Lucent, Ericsson, Huawei, LG, Motorola, Nokia, Nortel, Samsung, Siemens, ZTE, and others.