$3.3bn to be spent on LTE base stations in 2011

NEW YORK, USA: Wireless operators will spend about $3.3 billion building LTE (Long Term Evolution) base stations in 2011, according to the most recent study of LTE from ABI Research.

That expenditure will have purchased some 142,000 base stations worldwide. LTE base station equipment spending is expected to rise sharply between 2011and the end of 2012.

“Vendors will be shipping base station equipment in significant quantities in 2010 ahead of limited trials that typically last about a year, followed by full commercial launches,” says senior analyst Nadine Manjaro.

“Many operators have been talking about re-use of existing equipment, but ABI Research understands that while there may be sharing of masts and cabinets most of those 142,000 base stations will have completely new baseband and RF components, because operators will generally try to keep the new LTE networks separate from their legacy networks.”

ABI Research vice president Jake Saunders also points out that, “Due to LTE’s propagation characteristics and higher frequencies, operators will eventually have to deploy extra sites to iron out gaps in coverage.”

That is good news for base station equipment vendors. Some contracts have already been announced: as noted previously, Alcatel-Lucent, Ericsson, and Starent are the winners of a major set of contracts from Verizon Wireless.

In Japan, NTT-DOCOMO, in addition to tapping the world’s largest network infrastructure supplier, Ericsson, is also supporting local vendors NEC and Fujitsu.

TeliaSonera has chosen Ericsson and Huawei, while its fellow Scandinavian operators Tele2 and Telenor are also thought likely to settle on Huawei, which is proving a formidable competitor.

“There may be a new opportunity here for Nokia Siemens Networks,” notes Manjaro. “Nortel was early to market with LTE base station equipment, but its bankruptcy preempted that market push. With NSN’s acquisition of Nortel’s LTE assets, it is well placed to benefit from that early market presence.”