July 28, 2010 / 8:10 PM / 8 years ago

Mobile gear market to grow 7 percent in 2011

HELSINKI (Reuters) - The Mobile telecom equipment market will grow 7 percent to $40.3 billion in 2011 after shrinking for two years in a row, helped by investments in new 4G mobile networks, research firm iSuppli said on Wednesday.

Investments in fourth-generation LTE (Long Term Evolution) networks are set to ease the pressure on top European equipment vendors Ericsson, Nokia Siemens Networks and Alcatel-Lucent, who have struggled with falling sales and profits.

Wireless telecom gear market contracted 5.7 percent in 2009 as operators cut spending in recession and aggressive Chinese vendors drove down prices, and will tumble a further 2.3 percent this year as operators continue to focus on costs, iSuppli said.

The research firm is more cautious for 2010 than top vendors such as Nokia Siemens, which has forecast a flat market this year, while Alcatel-Lucent has estimated the market would even grow slightly this year.

Vendors have not published their forecasts for 2011.

“Starting in 2011, wireless carriers in industrialized countries will start to deploy 4G in order to attain faster speeds and to unclog the heavy data traffic,” said iSuppli analyst Jagdish Rebello.

“This 4G-driven growth in capital spending will continue at least through 2014,” Rebello said.

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