Yenra : 3G : 3G Price : Pressure on cost of base stations, controllers, microcells, picocells, and other equipment deployed in 3G wireless networks

Wireless Phone

Makers of critical infrastructure equipment for next-generation wireless services are under mounting pressure to cut their prices to attract new customers, according to a major new report released today by Heavy Reading.

The report, "Next-Generation Wireless Infrastructure: A Heavy Reading Competitive Analysis," evaluates vendor products and strategies in 14 key next-gen wireless market segments, including base stations, controllers, microcells and picocells, and other equipment deployed in third-generation (3G) wireless networks. The report includes in-depth, feature-by-feature analyses of nearly 150 different products from 34 manufacturers, including industry leaders Cisco Systems, Ericsson, Motorola, and Nortel Networks.

Prices for some 3G wireless equipment have dropped up to 60 percent in the past 12 to 24 months, notes Heavy Reading analyst Tim Kridel, who authored the 82-page report. "If anything, vendors will be under more pressure to slash equipment prices [in the future]," Kridel notes. "One reason is that mergers, such as Cingular Wireless's pending acquisition of AT&T Wireless, are creating more super-operators whose scale gives them enormous bargaining power."

The good news for equipment makers is that carriers are starting to spend more on 3G equipment. Even carriers that already have major 3G deployments will be increasing spending to make up for significant gaps in their coverage areas, Kridel says.

Other key report findings include:

Microcells and picocells are a significant growth area in wireless, but few vendors offer those products today. Microcells and picocells give carriers a low-cost way to plug small but potentially costly holes in their network coverage areas. Equipment makers that don't get into the microcell market will be missing out on a prime growth opportunity.

3G wireless remains the industry's best upgrade option. Although technologies such as WiMAX and 802.11 potentially offer more bandwidth, those options are years away from being deployable in significant scale in carrier networks. 3G technologies such as CDMA, GSM, and GPRS are available now and are proven to be carrier-class.

Vendors from China are making aggressive moves to become global players. UTStarcom has made several key acquisitions in the CDMA market, while ZTE is now expanding manufacturing operations in Brazil, India, Pakistan, and Russia.

"Next-Generation Wireless Infrastructure: A Heavy Reading Competitive Analysis" is published in PDF format and priced at $3,495.

Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.