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The Commercial Market
New 3G Wireless Infrastructure Study Published
Forward Concepts has announced the publication of what is probably the definitive in-depth study of the market and technology of the worldwide cellular infrastructure. The new report, "Wireless Infrastructure Technology and Markets: The Challenge of 3G," details infrastructure markets through 2006 and the technology changes necessary as cellular evolves from the circuit-switched, voice-only digital second-generation (2G) through combination circuit-switched voice and packet-switched data 2.5G to the all-IP multimedia-centric third-generation (3G) of the future.
The report forecasts that worldwide cellular subscribers will grow at a 13.6 percent rate, from 1.1 billion in 2002 to 2.0 billion in 2006. However, fueled by competition among cellular service providers and their aggressive subscriber rate plans, the report predicts that infrastructure capacity demand will grow at an estimated 35 percent compound rate as a result of both increasing air time and greater bandwidth use by wireless subscribers.
The worldwide capital investment in base station and mobile switching system electronic equipment will grow at a compound rate of 8.3 percent from $49.5 B in 2002 to $68.6 B in 2006. The report details worldwide investment by major air interfaces, by regions. "3G deployments will be both evolutionary and revolutionary," according to Dr. James E. Gunn, Forward Concepts senior consultant and author of the report. He elaborated, "In spite of the current difficult economic and telecom environment, we observe many positive trends. These positive trends include:
1. Many actual and pending 2.5G/3G deployment,
2. Significant interest in emerging market possibilities,
3. Non-voice revenue by operators climbing to 10 percent or more, and
4. Semiconductor and wireless handset industry indicators are exhibiting positive trends.
We believe that the economic environment will continue to improve and that the many standards and technical issues will soon be resolved. The value proposition that 2.5G and 3G brings to subscribers appears to be confirmed."
Dr. Gunn emphasized the technical content of the report, saying, "We believe that DSP and semiconductor technology advances will be sufficient by late 2003 to support Software-Defined Radio (SDR) technology deployments in both mobile terminal and infrastructure markets. The main issues will be the market needs, the supporting RF and mixed-signal technologies, and the cost of implementation. For mobile terminals, SDR will enable worldwide roaming by a single user with a single handset. For infrastructure, SDR will provide economies of scale, flexible 2.5G to 3G transition and flexible provisioning." The report predicts early 3G deployments in Japan and Korea will soon be eclipsed by a rapid rollout over an already-installed 3G infrastructure in Europe. Wireless Internet deployment will likely be regionally motivated, with greatest opportunities in countries with lesser wireline Internet penetration, like Japan and China. Since the US is the only country where wireline Internet penetration leads wireless, the largest wireless Internet opportunity will probably be outside of the US.
Details of the report are available on the company Web site at www.forwardconcepts.com.
Consumers Set to Get on Wireless Home Networking Train
As the wireless home networking space evolves to one which involves the wireless connection of the PC cluster of devices (broadband modem, router/AP device, desktops, laptops, PDAs, web tablets) to the entertainment cluster of devices (audio and visual equipment such as TVs, DVD players, MP3 players, gaming devices and home theater devices such as high end displays and DVRs), Wi-fi technology will take the lead. High tech market research firm In-Stat/MDR projects that with 802.11b already being accepted into the home and 803.11a already beginning to penetrate early adopter homes, worldwide annual Wi-fi node shipments will be 33 million in 2006, up from approximately 6 million nodes expected to ship out in 2002.
"With Wi-fi AP gateway devices available for about $120, and with PC cards falling to the $50-70 range at retail and e-tail, as of 2H of 2002, end-users are readily accepting Wi-fi as an attractive method of wirelessly sharing broadband Internet access," says Gemma Paulo, a senior analyst with In-Stat/MDR. "The popularity of Wi-fi in the home has generated increased interest in extending this wireless home network to entertainment and home automation clusters, opening the door to Wireless Personal Area Network (WPAN) technologies such as Ultra-wideband (UWB) and Zigbee."
In-Stat/MDR also found that:
- Low end networking hardware specialists such as Linksys, Buffalo, Netgear, D-Link, SMC, SOHOware and Actiontec have driven the success of Wi-fi in the home, as they have driven costs down, increased the variety of Wi-fi products on the market and have focused on making set-up and installation easier.
- Although the US is expected to remain the largest market for wireless LAN equipment in the home and SOHO space through 2006, Asia Pacific is quite notable for its growth. Japan, South Korea, Taiwan, Hong Kong, Australia and Singapore all present good areas for growth of Wi-fi.
- Although Wi-fi is expected to be embedded in consumer electronic devices going forward, its lack of multimedia support and bandwidth limitations have opened the door to UWB as a potential contender in the video distribution arena. Quality of Service (QoS) enhancements are expected to be added to the 802.11 standard by next year; however, UWB does offer much higher throughputs, albeit at much shorter ranges.
- Other promising wireless technologies for the home include Zigbee, designed for home automation of lighting and security, as well as Spike, a technology designed initially for video game controllers. Mesh peer-to-peer technology may also show up in the home of the future, possibly to extend the range of WLAN or WPAN technologies.
Consumer Broadband Not a Revolution but a Healthy Evolution
Even though dial-up will remain the primary method of consumer Internet access through the year 2006, DSL subscribers numbers will continue to gain momentum, according to InStat/MDR. In a recent pair of reports, the high tech market research firm reveals that pent-up demand for broadband is alive and well, forecasting that nearly one out of four online households will subscribe to a broadband service by the end of this year. DSL broadband service, specifically, will grow by 3 million installed lines to a total of 7.6 million subscribers in the US by the end of 2002, with approximately 80 percent of those lines serving consumer households.
For service providers looking to generate more revenues from their consumer customer base, it is important for them to increase broadband penetration. However, service availability is no longer the greater inhibitor to broadband growth. In a recent survey of consumers, In-Stat/MDR found that service price and lack of compelling applications are the main reasons cited by dial-up users on why they don't plan to get broadband service. Yet, interactive gaming, with its captivating and intensive, high speed Internet-friendly video games, promises to continue to drive the demand for DSL broadband connections.
In-Stat/MDR also found that:
- At the end of 2001, just over 58 percent of all households subscribed to an Internet access service. This includes both dial-up and broadband.
- Bundling of ILEC services promises to provide a boost to DSL, with projections of 10 percent or better through the end of the year, which will certainly aid in meeting the projected number of installed subscribers for 2002.
New G.SHDSL (Synchronous High Bit Rate DSL) designs, which have now been standardized by the industry, began testing during the third quarter of 2002. This new DSL flavor promises to close the gap between T-1 and T-3 high speed broadband access, bringing affordable 10 Mbps service to subscribers.