SAN JOSE, Calif. The market for cellular infrastructure gear declined 10 percent in the third quarter to $9 billion due in large part to fewer 3G deployments in China, according to a new report from market watcher Dell'Oro Group.
The vast majority of China's planned 2009 deployments of 3G services were completed in the first half of 2009. As a result shipments of WCDMA and CDMA base stations in the third quarter experiencing double-digit declines over a record-setting second quarter of this year, the report said.
China gave mobile gear makers a welcome boost during the recession of 2008-2009 when it gave a long anticipated green light to deployments of 3G cellular systems. Now the initial burst of sales—much of which went to China's own OEMs such as HuaWei and ZTE—is now apparently over.
As a result, "Each of the top five [mobile infrastructure] vendors experienced steep declines in base station shipments during the third quarter due to their slower sales to China," said Scott Siegler, a senior analyst at Dell'Oro, speaking in a prepared statement.
In addition, "The average selling price of wireless infrastructure equipment rose in the third quarter, because a greater percentage of equipment was sold in more developed countries, where prices are generally higher than in China," he said.
3G spending in China is expected to stay depressed for the remainder of this year, the report said. However heavy spending by China Unicom and China Telecom is expected to resume in 2010, and will be a prime contributor to both the WCDMA and CDMA markets, it added.