Tuesday May 22, 6:24 pm Eastern Time
Motorola Sees Wireless Network Revenue Growth
NEW YORK (Reuters) - Wireless technology giant Motorola Inc. (NYSE:MOT - news) said on Tuesday it expects industry-wide wireless network revenues to be flat to up 10 percent.
``It could be a flat year. We don't see a down year in infrastructure,'' Motorola senior vice president Adrian Nemcek said at a Lehman Brothers industry wireless conference here.
Wireless service providers should continue to expand and upgrade their networks to accommodate the increasing numbers of subscribers, he said.
In the United States, Sprint PCS Group (NYSE:PCS - news; NYSE:FON - news) and Verizon Wireless, the nation's largest service provider, are expected to upgrade their wireless networks to the first phase of 3G, the next-generation of wireless mobile communications that promises always-on connections and picture-perfect video.
Motorola expects to see 10 percent to 15 percent industry-wide revenue growth in wireless infrastructure in 2002, Nemcek said. [HHarry's comment: That number is a lot lower than I expected. Could be conserative]
He reiterated Motorola's previous forecast that it expects industry-wide cell-phone sales this year of 425 million to 475 million units. Forty-six percent of that total is expected to be replacement phones, with the rest being first-time buyers.
About 40 percent of the U.S. population has cell phones, Nemcek said, adding. ``There is still room for higher penetration.''
In contrast, some European countries have penetration rates as high as 70 percent.
Nemcek also noted the TDMA, or Time Division Multiple Access, standard, one of the three major standards for cell-phone networks in North America, is ``hitting the end of its life.''
About 62 percent of the world bases its wireless networks on GSM, or Global System for Mobile communications, technology, while 22 percent bases them on CDMA, or Code Division Multiple Access, technology, he said.
AT&T Wireless (NYSE:AWE - news), one of the major service providers that uses TDMA technology, has announced it will switch to a GSM standard this year.
Nemcek also expects consolidation among Latin American service providers. ``TDMA is going to wind down there as well,'' he said, adding that he expected Latin American TDMA service providers to switch to GSM or CDMA networks.
In China, Motorola expects the next-generation wireless infrastructure market to expand rapidly in 2002 to 2004.
Motorola said on Tuesday it was awarded three contracts by China United Telecommunications Corp., or China Unicom, worth $141 million. The contracts are for expansion and installation of China Unicom's GSM900 and 1800 networks in three provinces.
The deal comes one week after Motorola was awarded contracts worth $407 million by China Unicom Group, the parent of China Unicom, mainland China's No. 2 wireless company. Since April 25, Motorola has won more than $900 million in GSM and CDMA infrastructure contracts in China.
Nemcek expects China to have the largest number of wireless subscribers in the world by 2002. |
