Mobile operators spent $40bn in radio access, switching, applications and core infrastructure, down from $45bn in 2002, said Jason Chapman, principal analyst at Gartner, in a statement. Deployments of third-generation (3G) networks were delayed in 2003, but that the outlook for 2004 was more positive, he said.
"Operators have reduced their debt, reported stronger fourth quarter results and many have announced plans to increase their capital expenditure," Chapman said.
Ericsson remains the dominant vendor in the space, according to Gartner. The Swedish telecom vendor took 26 percent of the market, although it lost three percentage points of market share in comparison to its position in 2002. Nokia and Siemens each increased their market share, to 14 percent and 13 percent respectively, helped by strong spending on GSM and WCDMA rollouts.
GSM dominated the number of contract announcements in 2003, accounting for 64 percent of the total number of announced contracts and 59 percent based on total contract value. WCDMA (Wideband Code Division Multiple Access) and CDMA (Code Division Multiple Access) both had 14 percent of the number of announced contracts although CDMA surpassed WCDMA in terms of contract value with 37 percent.
Chapman said that he was struck by the fact that the 12 percent decline was actually not as bad as many observers had been expecting, and that there were several positive indicators that the market was now recovering.
"The fourth quarter results were very good. The first quarter, which is normally weak, was also very good, and we have very large operators coming into the market this year such as Vodafone, T-Mobile, Telefonica, and Telesonera," said Chapman.
Gartner is still working on its next annual forecast and so doesn't have firm numbers yet, but the "feeling is that it will be high single digit growth, for the worldwide mobile infrastructure market in 2004," said Chapman.
The big question that still remains is what consumers will actually be using 3G services for in 2005, once the market expands from its early adopters in business. Chapman doesn't expect any surprises, just a gradual evolution of existing picture and video messsaging applications, as well as additional voice capacity.
"There is no killer app that supports the whole 3G revolution, it's just improvement on what we have, so picture messaging is getting better, but the picture quality is still a little ropey. I will be able to send bigger, higher quality pictures and video messages, and when I'm surfing the football results, I'll be able to download higher quality video. The data card is starting to allow a real mobile office, and voice is still going to be very, very important, although it's not sexy," said Chapman.
