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Spending on In-Building Wireless Networks to Rise, Says ABI
Posted: 23-Jan-2004 [Source: ABI]

[New study sees competition and battle for network supremacy as the two drivers pushing demand for in-building wireless networks.]

Oyster Bay, NY -- Tough competition and the battle for network supremacy are two drivers that will push the market for in-building cellular networks north of $1 billion by the end of this decade, according to a new study by research firm ABI. However, limiting further growth in this market are two other factors, perhaps equally as strong: operator control and deployment costs. The most cost-efficient in-building wireless networks sometimes require an operator to give up control of the infrastructure, in a so-called "neutral-host" model.

Wireless carriers initially balked at the early demands of neutral host providers and began to consider alternative solutions by deploying their own in-building networks. High deployment costs -- primarily labor costs -- have made the decision to deploy carrier-owned in-building networks a hard-sell. Further complicating the matter was the difficulty in calculating the operators' return on investment after deployment. Recently, however, success for the neutral host model has lured operators back to this thinking, as exemplified by InnerWireless' deployment within New York's Rockefeller Center Concourse.

"Early on, operators were reluctant to cede network control to these providers," explains Edward Rerisi, Vice President of Research at ABI,. "Now that macro networks are more complete and neutral host providers have a more realistic view on carrier revenue sharing agreements, we are starting to see a resurgence in this business model."

Companies poised to benefit from increased spending are not necessarily the big names in wireless infrastructure. The larger companies in this industry include Andrew, LGC Wireless and LGP Allgon (recently acquired by Powerwave). According to ABI, companies to watch include Inner Wireless, Mobile Access and Radio Frame, among others. However, integrators also stand to benefit considerably by this trend, as installation costs represent the majority of carrier spending on this market.

According to the study , operators will still deploy carrier-owned infrastructure within larger buildings, like conference centers and sports arenas, but will consider sharing infrastructure in smaller buildings. Building owners are also helping to drive demand in this segment, as cellular and even Wi-Fi coverage are key selling points.

The ABI study, "In-Building Wireless Networks: Extending Cellular Networks through Picocells, Active, Passive and Hybrid Deployments," examines the global market for in-building wireless networks. The study presents forecasts for equipment and labor markets, segmented by active and passive systems, and by region and building size.

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