The worldwide mobile macrocell infrastructure market plunged 14% in 2016 from the previous year, according to IHS Markit, as LTE buildouts waned.
The market generated $11 billion in the fourth quarter, up 7% sequentially, driven by “strong activity” in Asian markets including India, Myanmar and Vietnam, the firm said. LTE investments were up 6% quarter-over-quarter thanks to E-UTRAN (evolved UMTS terrestrial radio access networks), but down 16% annually. And 2G and 3G activity was up 10% sequentially in the fourth quarter on W-CDMA investments in Japan.
“But none of this was enough to save the year for mobile infrastructure,” IHS wrote in a press release. “Looking at the full-year 2016, worldwide mobile infrastructure revenue totaled $43 billion, falling 10 percent from 2015’s $48 billion and also dragged down by all regions, with China in the driver’s seat. Revenue for the software that goes with 2G, 3G and 4G networks grew just 2 percent in 2016 from 2015, to $15.5 billion, mostly driven by LTE-A (LTE-Advanced) upgrades.”
Ericsson was the largest infrastructure vendor in terms of market share, followed in order by Huawei and Nokia. Chinese vendors struggled with declining demand in their home market.
And while the emergence of 5G networks will buoy the market in the coming years, it won’t provide significant relief any time soon, IHS said.
“All indicators point to a year of LTE decline in 2017 as a result of diminishing rollouts worldwide. Moreover, we forecast the LTE market to decline at a compound annual growth rate of -12.4 percent from 2016, sinking to $12 billion from its peak of $25.9 billion in 2015,” the firm predicted. “Early 5G rollouts won’t be enough to push the overall market back into growth territory, although by 2021 mobile infrastructure is projected to be a multibillion-dollar market worldwide.”