LTE reversing downward trend in RAN capex

Deployment of LTE in developing markets will help improve the market for new base stations, which have languished of late as spending on 3G networks declines, according to a report from ABI Research.

LTE deployments in developing markets are being funded via a variety of mechanisms, said ABI. For example, Rwanda is deploying LTE through a government-sponsored initiative, while private ventures are backing LTE deployments in markets such as Sri Lanka.

Investments in 3G radio access networks (RANs) are falling in many markets worldwide. For example, ABI noted that China Mobile is expected to sharply reduce its spending on TD-SCDMA as the operator shifts its focus to rolling out TD-LTE.

ABI said LTE expansion will not totally compensate for the global reduction in 3G capital expenditures this year. "4G equipment spend is taking up some of the slack, but there will still be a 6 percent drop this year," commented Jake Saunders, ABI vice president and practice director of core forecasting.

Nonetheless, the base station market is stabilizing, giving much needed relief to infrastructure vendors. Ericsson (NASDAQ:ERIC) Chairman Leif Johansson recently said the Swedish vendor anticipates a more stable and healthy market for network equipment in 2013 as demand grows in the United States, and China begins its march toward LTE.

ABI expects LTE to further boost operator capex next year. "2014 should see rising wireless investment as 4G deployment and capacity build-up gain momentum," said Saunders.

ABI forecasts spending on LTE base stations will reach $12.3 billion this year. "LTE has helped to reverse the downward trend in RAN expenditure in Western Europe last year and will do the same in Eastern Europe, Latin America and [the] Middle East in 2013 and Africa in 2014," the firm said.

For more:                  
- see this ABI release

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