Wireless Infrastructure in the World Market

Report Highlights

• The wireless infrastructure market was valued at just under $100 billion at the end of 2000.
• The market is conservatively estimated to increase at an average annual growth rate (AAGR) of 13.9% to more than $180 billion by 2005.
• Base stations account for more than 86% of all infrastructure spending.
• Growth will be somewhat slower, at an AAGR of 12%, over the period.
• Nearly 11% of the market is for semiconductor devices, sales of which will increase at an AAGR of 16.6% through 2005.
• Spending on towers will rise the fastest, from $2 billion in 2000 to nearly $15 billion in 2005, at an AAGR of more than 48%.

INTRODUCTION

The tremendous increase in worldwide demand for wireless communications services in the 1980s and 1990s created a significant increase in demand for a corresponding wireless infrastructure. Expanding wireless services required the installation of an infrastructure for the operation and support of these services. Wireless devices, e.g., mobile phones, palm computers, and a variety of personal digital assistant (PDA) devices that use a combination of wireless and Internet services enable mobile and other customers to use mobile and Web-initiated telephony, unified messaging, advanced conferencing, etc. These users demand, and indeed are entitled to, the same quality of service they can obtain from wireline sources.

Besides, such ubiquitous and always available, high quality services create much strain on service providers and their infrastructures. One reason for this is that the medium for wireless transmission is limited in scope. There is a fixed amount of radio frequency spectrum or wireless bandwidth available for the delivery of wireless services. Therefore, wireless infrastructure vendors are confined to developing and deploying equipment and systems that can deliver the desired services in spite of environmental constraint. Their goal is to increase capacity, coverage and call quality within the fixed amount of wireless spectrum.

STUDY GOAL AND OBJECTIVES

The goal of this study is to discuss the wireless infrastructure industry a way that provides the nonspecialist industry enthusiast with a good understanding of the industry. Objectives include the following:

• report_highlights major equipment of wireless infrastructure
• discuss vendors and their operating strategies
• discuss various wireless technologies
• quantify the wireless infrastructure market
• provide an historical perspective and also report_highlights current wireless industry developments
• discuss various risks and government regulations in the industry.

REASONS FOR DOING THE STUDY

The wireless industry experienced such explosive growth in the 1990s that it has become attractive to investors in spite of the current economic downturn. This study aims to take the investor behind the scenes to examine the potentials and challenges of the industry. What are entry barriers to the industry? What government legislation and environmental regulations affect operations? What is the size of the market? Who are the major players? Answers to these and similar questions are useful preparations for strategic planning for any new entrant into the wireless infrastructure industry.

METHODOLOGY AND INFORMATION SOURCES

Telephone conversations and interviews were held with industry executives. Considerable research was done using the Internet and information from various Web sites was studied and analyzed. The overriding objective throughout the work has been to provide valid and relevant information. This has led to a continual review and update of the contents so information is current as of April 2001.