Steep declines in 3G spending in China impact mobile infrastructure market

REDWOOD CITY, USA: In a recently published report by Dell’Oro Group, the trusted source for market information about the networking and telecom industries, mobile infrastructure market revenues declined 10 percent in the third quarter of this year to $9 billion, due in large part to fewer 3G deployments in China during the quarter.

The report indicates that the vast majority of 3G deployments in China were completed in the first half of 2009, which resulted in WCDMA and CDMA base station shipments in the third quarter experiencing double-digit declines over the record-setting second quarter of this year.

“The lack of 3G spending by China Unicom and China Telecom in the third quarter had two major consequences on the market,” stated Scott Siegler, Senior Analyst of Mobile Infrastructure research at Dell’Oro Group.

“First, each of the top five vendors experienced steep declines in base station shipments during the third quarter due to their slower sales to China. Second, the average selling price of wireless infrastructure equipment rose in the third quarter, because a greater percentage of equipment was sold in more developed countries, where prices are generally higher than in China,” continued Siegler.

While 3G spending in China is expected to stay depressed for the remainder of this year, the report indicates that heavy spending by China Unicom and China Telecom is expected to resume in 2010, and will be a prime contributor to both the W-CDMA and CDMA markets.