Infonetics: Network gear market slips despite LTE rollouts

Network gear vendors' bottom lines are increasingly reliant upon LTE deployments, but even the rush to LTE is not enough to prevent the overall mobile infrastructure market from slipping.

Top 4 mobile infrastructure vendors by 1q13 global revenue share

Source: Infonetics Research

During 2013's first quarter, global LTE infrastructure revenue reached $2.7 billion, a 108 percent year-over-year rise, said Infonetics Research, which added that appreciation of the U.S. dollar against the Japanese yen erased at least 5 percent of revenue.

Over the same three-month period, the worldwide 2G/3G/4G mobile infrastructure market totaled $9.8 billion, a 2 percent year-over-year slide, "despite another LTE ramp-up driven by North America and Europe," said the firm.

Stephane Teral, Infonetics' principal analyst for mobile infrastructure and carrier economics, noted that typically strong 2G and 3G markets, China in particular, failed to rescue the infrastructure industry in the first quarter, largely because they were busy selecting future LTE vendors.

"LTE is the highlight of our long-term 2G/3G/4G infrastructure forecast, growing at a 16 percent compound annual growth rate (CAGR) over the five years from 2012 to 2017," said Richard Webb, directing analyst for microwave and carrier Wi-Fi at Infonetics.

The firm added that Ericsson (NASDAQ:ERIC) continues to dominate the radio access network (RAN) market, with double the revenue market share of second-place Nokia Siemens Networks.

The contracting network gear market has led vendors such as NSN and Alcatel-Lucent (NYSE:ALU) to restructure and revamp their business focuses.

For example, Alcatel-Lucent just announced its Shift Plan, which in wireless increasingly targets LTE and small cells and moves away from investments in legacy technologies. The plan is aimed at producing cost savings of about $1.34 billion as well as another $1.34 billion gain from unspecified asset sales.

Meanwhile, NSN's future is in the balance as co-owner Siemens has reportedly approached private equity companies to discuss NSN's possible sale.

For more:
- see this Infonetics release

Related articles:
Alcatel-Lucent's shift may help it survive but could also aid its rivals
Rumour Mill: NSN's future in the balance as Siemens scouts buyers
Report: U.S. LTE opex to outpace capex starting in 2015
LTE reversing downward trend in RAN capex
Madden: Cloud RAN or small cells?
Small cells will generate 9% of mobile RAN revenues in 2016
Network infrastructure vendors face tough Q2, road ahead

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