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February 08, 2016

Macro Base Stations to Take Big Hit in Upcoming Market Moves

The very nature of technology ensures that some systems will be winners, and some will be losers. Generally, the winners eventually become losers as technology advances and surpasses that which once was indispensable. Macro base stations are set to take a similar hit, according to a new report from Mobile Experts, which shows high-power mobile infrastructure demand is on the way down.

“Macro Base Stations and Transceivers” is the report's title, and this innocent title masks a bloodbath in the macro base station market to come. The sixth annual report in a forecast series, it's undergone a lot of refinement, and as such presents a high level of accuracy in its forecasts. If this one holds true, we're looking at a lot of changes in the market fairly soon.

Essentially, as explained by Joe Madden, principal analyst for the report, we're looking at a sea change in the market, with the macro base station market peaking in 2014 and then going on the decline as most of the devices were in place. It worked similarly with 2G and 3G, Madden noted; major deployments emerged, prompting billions in spending, and then a four-year decline followed. With LTE, most of the networks have already been deployed in the areas with the strongest average revenue per user (ARPU) figures, so now, any further deployment is rounding out in areas with lower ARPU.

Additionally, Madden notes, there's a fundamental change in how base stations are handled. Centralized radio access networks (CRAN) architectures are increasingly in vogue, complete with new frequency bands for some. So while macro base stations may be on the decline, there's still an opportunity for those who can adapt to the changes, particularly as mobile providers start going after markets with less development therein.

One point that's also worth noting is that LTE is starting to approach the end of its prominence in the market. 5G connectivity is already in development, with even Google working to provide 5G access from a series of drone ships, as noted in its Project Skybender initiative. With a whole new breed of connectivity coming before too much longer has passed, it's not surprising that spending would slow on LTE access. Further, much of the LTE network has already been built; while there are exceptions here as some networks expand and others really get started, we've already seen enough promotional literature knowing that the major networks cover large portions of ground.

In the short term, though, that's not great news for the base station market. While it may not be out completely, nor for long, those who make macro base stations should be considering different branches into the market, lest the primary one dry up too soon. Changes in technology ensure that winners often end up as losers in the end, but those who plan ahead may be ready for the change.

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