SAN JOSE, Calif. Wireless carriers will buy as much as $240 million in gear for the 4G Long Term Evolution networks this year as four providers launch new services. The market for LTE gear will skyrocket to $5 billion by 2014, but still only represent ten percent of a wireless systems market dominated by today's 3G wideband CDMA technology.
That's the projection from market watchers at Dell 'Oro Group who unveiled their latest forecasts Wednesday (March 17). NTT DoCoMo, Verizon Wireless and Net4Mobility, a joint venture of carriers Tele2 AB in Europe and Telenor in Mexico will launch LTE services before the end of the year, said Scott Siegler, senior analyst for mobility infrastructure research at Dell 'Oro.
"The killer app is HD video," said Siegler. "There will be more machine-to-machine devices and maybe even LTE embedded in set-top boxes, but we won't know for sure what 4G devices will come until the networks are up with the data rates supported," he said.
Sales of wireless infrastructure gear is expected to stay flat at $38 billion in 2010 with declines in GSM and CDMA system sales offsetting growth in wideband CDMA (3G) and LTE.
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LTE can support downlink data rates up to 100 Mbits/s and uplinks of up to 50 Mbits/s.
Carriers bought nearly $5 billion in 3G gear in the last quarter of 2009 alone, surpassing sales of GSM equipment for the first time. Growth will continue with the 3G technology representing as much as three-quarters of all network infrastructure spending in 2014, Dell 'Oro forecasts.
China has temporarily slowed a big burst of building 3G nets, but growth could resume late this year. Incumbent vendors Hua Wei and ZTE benefited heavily from that spending, gaining share against rivals in data and voice equipment.
In the U.S., AT&T and T-Mobile spent heavily on a move to the HSPA 7.2 flavor of 3G. T-Mobile is spending again in 2010 to move to HSPA+, but AT&T will only upgrade in select areas, transitioning others later directly to LTE, Siegler said.
India has schedule auctions for 3G spectrum for April 9. The deals include requirements to deploy those nets within five years.
Steep declines in sales of gear for GSM and CDMA offset strong growth in WCDMA, keeping wireless gear spending to $38 billion in 2009. GSM sales fell 40 percent in 2009 and will decline another 22 percent this year, so overall wireless gear spending will remain flat in 2010, according to Dell 'Oro.