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Industry News

Commercial Market

July 1, 1997
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Commercial Market

New Silicon/GaAs MMIC Report to be Released

In a report about to be published, Allied Business Intelligence Inc. anticipates a breakthrough in the quest for the universal mobile phone made possible by the introduction of the dual-mode/band power amplification MMIC, which will allow users to operate a cellular phone in two modes, such as analog and digital. According to the report, “RF and Microwave Silicon and GaAs MMICs: Wireless Markets and the Implementation of Dual Mode,” users no longer will be confined to their service provider’s coverage area, but will be free to roam where they please and use whichever standard or service they desire. This product market is expected to grow from zero earlier this year to over 30 million units by 2001 and to change the face of the cellular industry forever.

The major developments and trends affecting the market and the systems that utilize MMIC components are discussed, including cellular telephony, personal communications systems (PCS), direct-broadcast television, digital cordless telephones, pagers, low earth orbiting satellites and other satellite communications systems. One section of the report examines developments in the cellular and PCS handset market and the complex interactions between technology and market forces. The continuing struggle between silicon and GaAs technologies for dominance in the multibillion-dollar wireless communications component market is also detailed. GaAs is predicted to become the undisputed champion of the cellular and PCS power amplifier market, which is estimated to be worth over $200 M this year and is expected to more than double over the next five years. For more information, contact Allied Business Intelligence Inc. (516) 624-3113, fax (516) 624-3115.

Gigabit Ethernet Products Slated to Grow

In a separate report, “The LAN Backbone: Changing Technologies and Topologies and Their Impact on LAN Interconnecting Markets,” Allied Business Intelligence Inc. also predicts that the market for gigabit Ethernet products in the local area network (LAN) backbone market will grow 263 percent before 2000. These products are expected to find a niche in LANs after their introduction. Similar to fast Ethernet products today, gigabit Ethernet products will be used to link high performance servers and, in some instances, to interconnect fast Ethernet switches or hubs in building backbones and wiring closets. As the technology becomes more ubiquitous in LANs and as LAN administrators learn how to install and maintain it and how to use its management features, gigabit Ethernet could emerge as a powerful tool for solving large LAN administrator issues of network growth and versatility. For more information, contact Allied Business Intelligence Inc. (516) 624-3113, fax (516) 624-3115.

Alcatel to Build Communications Network for Major Gas Pipeline

Detroit-based ANR Pipeline Co., a natural gas subsidiary of The Coastal Corp., has awarded a contract to Alcatel to build a high capacity digital telecommunications network along portions of ANR’s southwestern gas pipeline that terminates in three midwestern states. The network will be used to help monitor and regulate the flow of gas from the source to many destination terminals, and will become even more critical when supplies are required to be redirected in response to unanticipated market needs caused by severe weather or other factors. The project will include work to replace or upgrade existing analog radios operating in the 2 GHz frequency band with digital radios operating in the 6 GHz band.

Current plans call for Alcatel to have installed 23 hops, or station-to-station links, for ANR by June. On average, each hop is spaced 20 to 30 miles apart and consists of four Alcatel model MDR-5606 digital transmit and receive radio units. The MDR-5606 units have a capacity of 672 voice or 64 kbps data channels. As part of the continuing project, lower capacity model MDR-6000 digital radios could be installed along spur routes off the main communications backbone, and both inside and outside plant equipment is being installed. Inside equipment consists of microwave radios and other communications gear requiring shelter. Outside equipment consists of microwave towers, antennas, shelters and other equipment needed to create the links. A hot standby, space diversity protection system will be used to provide automatic restoration in the case of equipment failure that would cause a long-term service disruption. In addition, the system will allow radio receivers to alternate between antennas to obtain the clearest and strongest signal.

Wireless Voice Industry Will Serve 5.3 Billion Subscribers by 2000

According to Mobile Phone News , a Giga Information Group report predicts worldwide penetration for wireless voice subscribers will increase from 1.65 percent in 1995 to 4.75 percent in 2000. The report, “Wireless Communications Market Trends,” states that Western Europe and the Asia-Pacific regions will account for the bulk of the growth for cellular. The 4.75 percent penetration represents 5.3 billion cellular and PCS subscribers.

Estimates are provided on handset sales; handset replacements; churn; subscribers; new subscribers added per year; and average retail prices for handsets, handset revenue and service revenue worldwide by region and technology. Western Europe is predicted to lead the world in shipments and come in second place in terms of installed base of subscribers and annual service revenue by 2000. An estimated 27 million handsets will be shipped to Western Europe in 2000, which will have a total subscriber population of 75.7 million and a total annual service revenue of $39.9 B.

However, not all of the report’s findings are good. Due to declining rates, companies signing on cellular customers will have to bring the average cost per subscriber down to $160 to maintain a payback period of six months. This decreased cost per subscriber means that both connection payments and operating costs will have to be pared from current levels. It is suggested that revenue lost from declining rates can be made up by offering new data services. Wireless data services on all networks in Western Europe are predicted to amount to revenue of $770 per subscriber in 1999. On the other hand, the annual revenue per cellular voice subscriber is expected to drop to $332 by 2000.

The Asia-Pacific region will have higher service revenue (an estimated $62.6 B in 2000) than Western Europe due to higher pricing, a large population and low teledensity. Even though prices in the region are significantly higher than elsewhere, they are falling — average monthly revenue per subscriber in 1996 was $124.81.

Ericsson Receives $122 M Order from CDP

Ericsson has signed a new contract with Central Japan Digital Phone (CDP) for expansion and functionality upgrades of CDP’s mobile telecommunications network this year. The terms of the $122 M agreement include a major software upgrade with advanced functions, as well as expansion of the network with new switching centers and radio base stations to further increase the service performance level.

CDP is one of three operators in the digital phone group who is licensed to operate a personal digital cellular 1500 MHz network and offers service in the Tokai region where Nagoya is the main city. The company has been in operation since July 1994 and currently has more than 500,000 subscribers in its network. The number of subscribers has more than doubled since January 1996.

Japan is now the fastest-growing cellular market in the world with over 4.5 million subscribers joining the networks in the first half of 1996. Currently, there are more than 16 million cellular subscribers in Japan. This number is expected to grow to over 53 million by 2000 when most subscribers will be using digital systems.

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