Fundamental Changes Coming to the Wireless Infrastructure Market

14th April , 2004

Europe : The organisers of the conference "The Commodity Basestation: When, How and Who Wins?" (Bath, UK, April 28th & 29th) announced that speakers from major companies across the entire basestation value-chain will come together to consider fundamental changes coming to a global market worth more than $10bn (1).

The conference will provide a unique forum where Marketing, Product Management, Business Development and Supply Chain Management professionals with an interest in the basestation market can explore the business impacts of this market transition with companies leading the changes.

Speaking companies include Credit Suisse First Boston, 3, Intel, Nokia, Siemens, Lucent, Motorola, Powerwave, Andrew Corporation, Hughes Software Systems, PA Consulting, picoChip, Xilinx, Analog Devices and Arete Research.

Conference programme organiser Pete Keevill commented: "This is a tough subject, but many in the industry are beginning to recognise that commoditisation of their basestation products is a real issue that they will have to deal with very soon. It looks like the transition to UMTS will provide the trigger for a major reshaping of the way the industry works."

Eiji Aono, Director of Telecom Equipment Equity Research at Credit Suisse First Boston, who will be speaking at the conference, agrees: "UMTS is a complex, new technology with major development costs but operators are not tolerating premium pricing for the new systems and competition between vendors is intense. Our research indicates that the price per channel for UMTS infrastructure equipment is already less than 30% of the GSM equivalent. The pressure on margins means vendors are looking to outsource R&D effort to their suppliers, which places substantial new expectations on those companies. The whole value chain is changing and there will be winners and losers in the transition."

Two new standards are emerging, the Open Base Station Architecture Initiative (OBSAI) and the Common Public Radio Interface (CPRI), to "open up" the basestation architecture to competing module suppliers. Senior representatives of both OBSAI and CPRI initiatives will be explaining the business benefits of their standards at the conference.

The emergence of these standards is a key development according to Jason Chapman, Principal Analyst for Mobile Communications at Gartner Dataquest and co-author of a recent report (2) who will be speaking in a Panel Session at the conference: "The Wireless Infrastructure market is maturing and vendors have to find new ways to do business as margins are squeezed. Building basestations out of common modules looks to be the most promising approach to controlling costs, allowing vendors to focus their efforts on differentiating features with higher margins. Fixing the module interface specifications brings opportunities and threats to all the players in the value chain, but the net result should be good for the whole mobile industry." However, Chapman believes the new standards are not where they need to be yet: "OBSAI and CPRI should merge and focus on the long-term goal of true plug and play modules."

References:

(1) "Mobile Network Infrastructure Revenue: Worldwide 2002-2007" August 2003, Jason Chapman et al. Gartner Dataquest.

(2) "Fixed Interfaces Will Transform Mobile Infrastructure Market" 15th March 2004, Jason Chapman and Stan Brederle, Gartner Dataquest

TODAY'S PRESS RELEASES
All Material Subject to Copyright. All logos, graphics and trademarks are the property of their respective owners.

Home ProZone Subscribe To Newsletter 3G Forum