Steady Growth For China's Wireless
Network Optimization Equipment September 25, 2008
In 1H 2008, China's wireless
network optimization equipment revenues reached 3.34 billion Yuan, which was
66.2% of total revenues in 2007. There has been steady but moderate yearly
Wireless network optimization
equipment is primarily focused on increasing coverage of blind signal areas,
and usually consists of base station amplifiers, microwave devices and
antenna. Since 2000, China has been aggressively enlarging its wireless
network coverage. However, for blind signal areas, telecom operators find it
financially or technically unfeasible to simply open more base stations.
This is where wireless network optimization equipment comes in.
Source: CCID Consulting, July 2008
Chinese mobile subscriber
growth and demand for advanced services will drive the growth of wireless
network optimization. Blind spots that need to be addressed include urban
residential quarters, certain roads, railways and subways, campuses, large
public areas, waterways, mountainous regions, vast grasslands, and the
Case in point: China
Mobile as initiated its 3G coverage with TD-SCDMA trials, building out
macro-cellular base stations. However, its coverage is inconsistent,
especially compared to the 2G coverage that mobile subscribers come to
expect. In order for China Mobile to effectively promote 3G and increase its
adoption, the company will have to deepen its coverage using wireless
network optimization strategies and equipment.
Vendors with scale and size
have gained market share. First tier vendors include
China GrenTech, with operating revenues exceeding one billion Yuan. Comba's
products include repeater stations, digital microwave, antenna, and base
station subsystems. China GrenTech's include wireless network coverage, RF
and wireless broadband access products. Both vendors have also transitioned
to RF and module technology solution providers.
Second tier vendors include
Sunnada. These vendors typically provide repeater station
equipment and integrated solution services. However, they are planning to
expand to more high-end offerings.
Vendor Profit Pressures
China's telecom operators
have been gradually centralizing their equipment procurement, to simplify
their business processes and save costs. This has led average price declines
of mobile communications equipment. Vendor's gross profits have declined
from the 50% range in 2004 down to well below 40% in 2007.
Moreover, wireless network
optimization equipment is targeted specifically to telecom operators, which
also require high technical content and vendor stability. In response,
vendors have leveraged their technological competencies into other RF-related
fields, broadcast television, wireless metropolitan area networks and
wireless broadband LAN, which may bring renewed vendor growth.
When procuring equipment,
telecom operators are apt to also include product, systems integration, and
network maintenance as part of the purchase. Therefore, in order to be
competitive, vendors also must have more comprehensive set offerings that
include supporting software and services. CCID Consulting believes that
vendors who lack such comprehensive offerings will not survive.
For more information
contact us for these and
other China-related data, information and products.
Unless otherwise specified,
all information provided is sourced from CCID Consulting.