Choosing LTE vendors in a hot M&A environment

Jessica Scarpati
03 Jun 2010
Wireless operators have always based their infrastructure buying decisions on the speed, performance and reliability of vendors' equipment, but operators that are choosing LTE vendors must also consider investment protection.
LTE vendors are in a relatively immature market that is facing pressure from a worldwide recession and reduced carrier spending.
"Unfortunately, there's no indicator as to whether or not a [carrier] is making a good move by investing in whatever [LTE] vendor they've chosen," said Debbie Kish, principal analyst at Gartner Inc.
"You can't ring-ding anybody that badly about financials because we did have a recession …. [so carriers should be] choosing a vendor that has a long history of mobile technology and viability, and the one that has a product roadmap that fits their needs."
The list of LTE vendors that offer end-to-end portfolios is relatively short and dominated by the market's biggest players, according to Kish, who contributed to Gartner's new Magic Quadrant for LTE Infrastructure. The roster of vendors will continue to shrink, she said, as large telecom vendors gobble up independent LTE vendors to fill gaps in their product portfolios.
Owing partly to this market volatility, LTE spending will be sluggish until late 2011 and 2012, Kish said. Gartner estimated the worldwide LTE infrastructure market to be just $132 million in 2009 and projects it to reach $553 million by the end of this year.
By 2014, Gartner expects LTE spending to skyrocket to $7.1 billion, she said, as the market matures and carriers become more confident in investing.
Juniper Networks' recent acquisition of Akeena, an online content delivery company specializing in rich media, is a prime example of how core-heavy vendors may try to beef up their LTE offerings, according to Bill Rubino, principal analyst at ACG Research.


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