Robust spending on LTE deployments was not enough to rescue mobile infrastructure spending from a first quarter downturn. According to Infonetics Research, preparations for LTE rollouts are putting a damper on 3G investment in some parts of the world.
“Typically strong 2G and 3G markets, China in particular, did not come to the rescue this time around,” said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics. “In fact, China and Russia had a busy 1Q13 selecting LTE vendors. Life without LTE would be hell!”
Overall, carriers spent $9.8 billion on mobile infrastructure in the first quarter, 9% less than they spent in the fourth quarter of 2012. Year-on-year, spending was down 2%. LTE spending represented more than a quarter of the total, or $2.7 billion. It was up 21% from the previous quarter and up 108% from the year-ago quarter.
LTE spending is projected to represent an increasing share of overall infrastructure investment; Infonetics projects a 16% compound average growth rate from 2012 to 2017. But in 2017, just 8% of the 7 billion projected mobile subscribers will be using LTE networks.
Ericsson continues to be the dominant wireless equipment vendor, with more than a third of Q1 market share. Nokia Siemens Networks was the number two vendor, followed by Huawei and Alcatel-Lucent. Nokia Siemens Networks, a joint venture owned by Nokia and Siemens, is reportedly for sale, Huawei is facing political roadblocks in the U.S. market, and Alcatel-Lucent has just announced a major reorganization that will shift its focus from telecom to IP.
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