Modest Growth in Mobile Infrastructure , WCDMA Drives Growth, GSM to Decline, CDMA becomes Cyclical

Dell’Oro: Mobility infrastructure equipment market will grow 3 percent in 2006 to $41.8 billion, and that the market will continue to grow in the low single-digits through 2010. Subscriber growth should continue to fuel infrastructure investments in developing regions through 2010. In developed regions, where subscriber penetration rates are high, average revenue per user (ARPU) growth will come primarily from voice usage and data services, which will be key in sustaining infrastructure investments and driving upgrades to high-speed data capabilities like HSDPA and CDMA-1X-EV-DO.

While subscriber growth remains strong, especially in developing regions, the revenue opportunity for the infrastructure vendors appears to be more muted as the market moves from coverage driven investments to more incremental capacity spending. We forecast that increases in WCDMA revenues will more than slightly offset declines in GSM-based infrastructure. The CDMA market has matured such that it is prone to the ups and downs of upgrade cycles, but should see modest growth through the scope of our forecast. 5-Year Forecast Report 20060202