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Thursday, June 13, 2013

Cisco Captures Pole Position in 1Q 2013 WW Mobile IP Infrastructure Market

1Q 2013 Worldwide Mobile IP Infrastructure market grew to $1.2B as Mobile SPs continue investments in Mobile IP Backhaul and Packet Core networks, including significant CapEx spend shift to LTE networks. This phenomenon has been prevalent in NAM for 12 months and is now taking shape in APAC. EMEA Mobile SPs are beginning to confidently plan LTE investments as the regulatory environment becomes more favorable.

Mobile IP Infrastructure Worldwide Market Shares Q1/13
Market Share

Cisco has executed well with significant market share gains in 1Q 2013, achieving pole position to lead all three segments: Mobile IP Backbone, Mobile IP Backhaul, and Packet Core at total 42 percent WW Mobile IP Infrastructure market share. Cisco has also out-executed Ericsson’s stated “seasonal weakness,” taking the #1 position in the coveted EPC segment. Although Cisco has focused its Packet Core offerings with a high price/performance portfolio strategy, its sales execution within the US, Canada, and EMEA markets is yielding strongholds in key LTE markets with wins in Vimpelcom (Russia), SFR (France), select T-Mobile properties in Europe, as well as with mobile network expansions in Bell Canada, du, Bharti Airtel, Tata, and KDDI. Cisco’s core strengths in Packet Core and its deep LTE core network experience are a result of its large/incumbent position in AT&T and Verizon Wireless where it has acquired complex deployment experience in 3G migration, LTE capacity planning, subscriber policy management, and multimedia/video revenue creation models.

Ericsson, despite its 1Q 2013 weakness, maintains its “Game of Thrones” empire on LTE networks. Massive global LTE deployments and a high rate of trial contract conversions/expansions, will fuel growth throughout 2013 for Ericsson. LATAM Mobile SPs have already selected key LTE suppliers, with Ericsson winning a majority market share. Ericsson has also demonstrated the world’s first end-to-end LTE broadcast video solution and has commercial deployment endorsements from Verizon Wireless and Telstra. Ericsson's unique combination eMBMS, HEVC and MPEG DASH, three new standards, enables Mobile SPs to provide premium video services with guaranteed quality and cost-efficient delivery over LTE.

Market Trends/Predictions
ACG sees several trends emerging in Mobile SP CapEx outlays. 3G network CapEx in RAN and core segments has eroded, and ACG expects a decline of 20–30% Y/Y through 2013 across many regions. Mobile IP Backhaul CapEx will continue to grow in double digits through 2013 globally as operators continue to optimize cell site capacity and network operations costs. ACG expects CapEx spend to increase 15–20% Y/Y on mmW and NLOS technologies as these are optimal for small cells and provide deployment flexibility in metro zones where macro cell sites do not make economic sense. ACG expects EPC to grow at record pace, averaging 45–50% Y/Y in 2013 with the US and Canada undergoing national builds, and with APAC and LATAM driving additional LTE ‘deployment’ revenues.

Next Wave of Mega LTE Networks: India & China
For the LTE industry overall, ACG predicts the next wave of growth opportunities will come from TD-LTE builds in India and China. Although the timing of mass LTE deployments in India is questionable, as policy/licensing issues, as well as regulator/tax collector actions against the country’s top Mobile SPs continue to escalate and cause unfavorable investment climate. In contrast, 3G subscriptions in China continue to skyrocket, and demand for TD-LTE networks with its inherent cost/spectrum efficiencies is at its peak. For example, China Mobile will spend more than $7 billion in CapEx this year on its TD-LTE network build. China Unicom and China Telecom will make decisions regarding TD-LTE in mid 2013, with rollouts beginning as early as end of 2013. Tier 1 vendors such as Alcatel-Lucent and Nokia Siemens are tripling investments and resources in China to support accelerated TD-LTE build-outs.

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