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Mobile Subscribers Yearwise comparision

Rising BTS Demand: Next generation technologies to drive growth

November 15, 2010

The base transceiver station (BTS) segment, which is an important part of telecom’s active infrastructure, has witnessed robust growth in the past few years, driven mostly by exponential subscriber additions. The telecom subscriber base, which crossed the 700 million mark in August 2010, is expected to grow further with the next level of demand coming from rural areas.

The market for base stations, driven by network expansion by existing operators and the launch of services by new operators, is expected to witness a rise in demand over the next few years. The launch of 3G and wireless broadband will add to this demand. Current networks are not capable of handling the levels of traffic that could be generated by HSPA-enabled smartphones and dongles, which are likely to be the primary medium for internet access post the arrival of next-generation technologies.

Market size and growth

The market size of the base station industry was around Rs 216.59 billion as of 2009-10. It grew at a compound annual growth rate (CAGR) of 60 per cent during 2006-10.

Currently, there are around 481,000 BTSs in the country. BTS deployment in the country grew at a CAGR of 60.49 per cent between 2005-06 and 2009-10. On a year-on-year basis, the rate of BTS additions declined to 30.87 per cent in 2009-10 from 65.56 per cent in 2008-09. With urban teledensity reaching almost 100 per cent, the maximum BTS installation was witnessed in the Category B and C circles. During 2006-10, the Category C circles witnessed the highest growth at a CAGR of around 81.5 per cent, followed by Category B circles at 71.49 per cent.

Bharti Airtel, with over 100,000 BTSs, accounted for over 25 per cent of the total base stations deployed in 2009-10. It was followed by Vodafone Essar and Idea Cellular, which had 88,945 and 58,443 BTSs respectively.

In 2009, 975,000 BTSs were deployed across the world. With the largest 3G deployment to date, China accounted for more than one-third of this. India is expected to emerge as a key market for BTSs with the launch of next-generation technologies in the near future. Moreover, the Asia-Pacific region is likely to maintain its global market share of over 40 per cent in terms of wireless BTS deployment. Countries like India, Indonesia and Vietnam would be the major growth drivers in this region.

Trends and developments

Operators are deploying either Wi-Max or long term evolution (LTE) as the platform for rolling out next-generation technologies. While state-owned operators Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) are adopting Wi-Max, most of the private operators are banking on LTE, which has been the preferred platform for the rollout of broadband wireless access (BWA) globally.

According to ABI Research, investment in LTE BTSs is expected to increase significantly between 2011 and 2012 globally. Wireless operators are expected to invest about $3.3 billion in the segment in 2011. This expenditure could have purchased 142,000 base stations worldwide.

Vendors like Alcatel-Lucent, Ericsson, Starent, Huawei and Nokia Siemens Networks (NSN) have won contracts from operators to supply base stations in the country. NSN and Ericsson have demonstrated the time division duplex version of LTE (TD-LTE) using BWA spectrum in India. Huawei and NSN have been roped in by Tata Teleservices Limited to roll out an LTE-ready 3G network in India. ZTE shipped over 12,000 CDMA BTSs to the country in the first six months of 2010 and expects a surge in demand going forward.

Though LTE BTSs have found favour with many operators, the deployment of Wi-Max BTSs is also increasing. The global Wi-Max consumer base is expected to touch 59 million by 2015. Service providers that are adopting Wi-Max and upgrading their networks are selecting infrastructure vendors that offer the option of staying with Wi-Max and moving towards TD-LTE. BSNL, which has awarded franchise contracts to four companies – Teracom, Take Solutions, Adishwar India and Ampoules – to roll out Wi-Max-based broadband services, has introduced a clause in their contracts requiring them to shift to the LTE technology standard when required.

In 2009, Alvarion shipped the highest number of Wi-Max BTSs globally, followed by Samsung, NSN, Huawei, ZTE and NEC.

Given the high levels of power consumption in the sector and the emphasis on clean technologies, vendors in India are likely to focus on solutions that reduce energy consumption by BTSs. By 2011, renewable energy will become the preferred fuel option for running remote BTSs. The adoption of solar power-charged BTSs is picking up in the Indian market. These are suitable for rural areas where people have less than $2 a month to spend on their phone bills.

VNL’s zero-opex solar-powered GSM BTS, WorldGSM, which requires only 50-150 W per BTS, has been installed in over 50 villages in rural Rajasthan, providing network coverage to the households for the first time. The BTS costs about $15,000 and can be powered by a 2-8 square metre solar panel.

Cellular BTSs are undergoing a design revolution. A BTS, which was traditionally a rack of equipment inside a shelter, is now becoming anachronistic as it is expensive and because the required coaxial cable running up the tower to the antennas often results in significant power losses.

According to industry experts, a key trend in this segment is the separation of the radio frequency (RF) unit from the base band unit. This eliminates the need for feeder cables.

Distributed BTSs – in which the RF portion (also known as the remote radio head) and an optical interface are placed in a weatherproof box mounted on the tower near the antennas – are now gaining traction. In this case, the base band unit is placed in the shelter. This significantly reduces the footprint for BTS deployment as well as power consumption.

The use of intertechnology BTSs like the software defined radio BTS has been increasing in the past few years. Signal processing – the modulation and encoding of signals to and from physical antennas – is carried out using software radio technology. The use of these BTSs does not necessitate any change in hardware as operators move from one technology to another or switch spectrum bands, thereby reducing costs.

Going forward

The current number of BTS sites in the country is low and the existing ones need to be upgraded. With the Department of Telecommunications encouraging active- infrastructure sharing, BTS sharing is expected to become a viable option for operators in the future, especially in low-ARPU rural areas.

Miniaturisation has been an emerging trend in the global industry. Femto cells, which are miniature BTSs reduced to the size of a palm, are gaining traction in international markets. The spectrum used in these cells is the same as any conventional BTS but the problem of congestion and call drops is solved as these serve as personal BTSs. Global annual femto cell shipments are expected to reach 31.8 million by 2014. Though this technology is yet to hit the Indian market, it makes a strong business case with the expected launch of 3G services.

As subscriber additions continue to increase at a rapid pace and operators cater to a bigger customer base, including the rural areas, the demand for BTSs is expected to rise further in the future.


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