WLAN Hotspots to Singe City 3G?
Despite prevailing uncertainty over the potential success of the much hyped hotspot model (see Readers Split on WLAN v 3G ), the company believes that growing carrier interest in wireless LAN could affect investment in 3G networks.
In its latest report -- Investigating Wireless LANs: A Global View – Lehman Brothers adheres to general market belief that the two wireless technologies will be complementary to one another, but claims that “in metropolitan areas and attractive WLAN spots, buildout of 3G will not need to be as intensive as may have previously been envisaged.”
“It is true that wireless LAN is likely to displace 3G capex and coverage in metropolitan hotspots,” says Will Draper, European wireless services analyst. Draper expects carriers to focus wireless LAN investment in specific metropolitan areas, whilst 3G and GPRS (General Packet Radio Service) rollout will be concentrated on wider “urban areas and suburban/rural coverage” respectively.
As a result, Draper believes the overall market for 3G network infrastructure could face a further hit. “We expect to see slightly lower levels of 3G capital expenditure than we have previously seen.”
Lehman’s findings contradict rival analysts' belief that the worst of the wireless equipment market downturn is over (see W-CDMA: When, Not If). If the bruddas are right, this will come as a further blow to traditional equipment vendors such as LM Ericsson (Nasdaq: ERICY), Nortel Networks Corp. (NYSE/Toronto: NT), and Nokia Corp. (NYSE: NOK).
However, plenty of other analysts dispute Lehman's take on the situation. “From all around the industry we are picking up signals that the infrastructure market is at last stabilizing,” wrote Nomura Holdings Inc.'s Dr Richard Windsor in a statement only last week. “From operators right the way through to component vendors the message is clear; the days of deep spending cuts appear to be over.”
— Justin Springham, Senior Editor, Europe, Unstrung