2016 macrocell base station spending will decline for the second year in a row, to $48 billion, according to ABI Research. ABI forecasts that global base station spending will decline by 2 percent in 2016 and then by double digits each year thereafter. The decline reflects the shift in capital spending to densifying wireless networks.
“The base station spending decline means that CapEx is shifting to less capital intensive solutions, including small cells, DAS and Wi-Fi for densification,” said Nick Marshall, Research Director at ABI Research, in a company release. “While India will dominate spending in Asia-Pacific over the next few years, North America’s 4G coverage is virtually complete as the region prepares for 5G, along with Japan and South Korea.”
The Asia-Pacific region is still the largest base station market; however, 2016 will be down from the 2015 peak, as China completes its LTE rollout. North America will see the biggest declines, as deployments for LTE coverage diminish.
In 2015, Ericsson led the overall base station market, followed by Huawei, Nokia Networks, Alcatel-Lucent and ZTE, according to ABI.
“As the 5G technology cycle gets underway, base station vendors including Ericsson, Huawei and Nokia will face the challenge of replacing lost revenue in the short term,” said Marshall. “While the early commercialization of 5G will certainly help to replace this lost revenue, it is not until well after 2020 that this contribution becomes meaningful. Base station vendors must diversity to make up for this shortfall.”