3G Future Success

World : Total wireless infrastructure contract values are down roughly 40% year-over-year from the first half 2002, compared with that of the first half of 2003. Much of the decline, however, is attributed to the large contracts awarded last year in North America for the TDMA transition to GSM/GPRS. While only a one-time event, this transition provided a solid cushion in an otherwise down market for wireless infrastructure. According to technology market research firm ABI, for the first half of 2003, 3G contracts represented about 13% of all deals signed, with significant strength still evident in 2G and 2.5G technologies.

"Despite the number of 2G and 2.5G contracts signed, future strength in this market lies in the 3G, WCDMA segment," declares ABI's Director of Research Edward Rerisi. "Though other technologies should not be ignored, considerable upside opportunity lies ahead in the WCMDA segment." According to ABI research, current individual 3G contract awards are worth roughly twice that of those for 2G and 2.5G networks.

Over $1 billion in contracts have been signed for WCDMA since the beginning of the year, representing 13% of all signed contracts. The good news is that the number of awards has been increasing rather consistently over the first six months of 2003. However, a significant portion of these awards is for 2G/2.5G equipment entering emerging markets. While these wins are not insignificant, equipment vendors are more heavily focused on gaining WCDMA business. These initial contracts will most likely bring in future business, as operators often use the same vendor for network expansion deals.

"Long-term success will only be brought by early contract wins," adds Mr. Rerisi. According to ABI's findings, current leader Ericsson holds the top slot, with 44% of all WCDMA contract awards this year alone. Other WCDMA contracts this year have been awarded to Alcatel, Lucent, Nokia, Nortel and Samsung.

An examination of the pending transition to 3G, as well as the various hurdles faced by operators, equipment providers and startups, are included in ABI's Wireless Infrastructure Subscription Service. A regional review is also included, giving subscribers a view of how networks are changing worldwide.