The world cellular equipment market, including both switching and base station equipment, totaled $14.4 billion in 1994 with plenty of growth still ahead, according to a new study from Northern Business Information.
In “World Cellular Network Equipment Markets: 1994 Edition,” NBI projected a compound average growth rate of 27.8 percent, reaching $16.2 billion by 1998.
NBI said the major drivers for market growth in 1994 included the exponential growth of new cellular subscribers forcing cellular operators to upgrade their systems and increase traffic handling capacity, as well as the continued emergence of developing markets in need of wireless technology to bolster existing communications networks or build new cost-effective communications infrastructure in a short time frame.
World cellular subscribership stood at nearly 48 million in 1994, a 48 percent increase compared with the prior year, with 83 percent of the total served by analog networks, the company said.
The report noted the implementation of advanced technologies such as digital cellular and intelligent network equipment is causing cellular technology to become increasingly more reliable and cost effective. Overall prices, particularly for digital equipment, are declining. This is particularly beneficial in emerging markets where new carriers are facing increasingly lower barriers to entry as a result of both regulatory liberalization and lower equipment costs.
However, the report cautions that liberalization of cellular markets worldwide has resulted in intensified competition among operators who in turn are becoming increasingly critical purchasers, making additional demands on their suppliers. Operators in all regions want smaller, more compact base stations that are easier to install and capable of more flexible configurations.
NBI said other operator demands include increased hardware compatibility among vendors, timely delivery of software upgrades, local support (particularly important to Asian/Pacific operators) and, of course, better prices.
Ericsson Inc. and Motorola Inc. continue to dominate the global cellular infrastructure market with a combined market share exceeding 50 percent in terms of annual equipment sales, NBI said. AT&T Corp. remains in third place with a 12.5 percent share, followed by several manufacturers with single-digit market shares, including Alcatel Network Systems Inc., Hughes Network Systems Inc., NEC Corp., Nokia Corp., Northern Telecom Ltd. and Siemens AG.
