Tuesday, June 20, 2006

visiongain intelligence: In-building revenues to top $1.3bn by 2009

According to visiongain intelligence, "in-building wireless revenues can exceed $1.3 billion by 2009 if mobile operators position themselves correctly in the market. The need for improved voice quality in homes, offices and other buildings, as well as increasing usage of mobile data networks indoors, are driving this growth of cellular and wireless in-building solutions."

The firm found that "Upwards of 70% of 3G data traffic originates indoors and adopting the right strategy can help operators alleviate network capacity issues while at the same time boost data ARPU and reduce churn through service differentiation." Visiongain believes that "strategies to improve the quality and coverage of in-building services will increase the value of mobile services and in the process boost in-building minutes of use and data ARPU."

Sherman Fridman at visiongain said, “The need for improved in-building wireless communication is clear. Coverage, capacity and frequency constraints limit the QoS customers expect indoors and negatively impacts mobile usage. By carefully evaluating the various in-building technology solutions on the market, operators can stimulate the growth of mobile-only households, which presents a huge opportunity to tap into”

visiongain pointed to Nokia’s (NOK) "recent agreement with RadioFrame Networks that will see Nokia sell, distribute and support RadioFrame’s picocell solutions to mobile network operators" as "a major shot for this market and is indicative of a growing focus on the benefits of in-building solutions."

Fridman added, “The significance of this announcement is the pico cell's ability, at relatively low cost, to accommodate several wireless communication technologies in one unit. And, with Nokia as a seller and supporter of the pico cell solution, added market clout is given to in-building wireless solutions."

Fridman thought that "in the enterprise segment, all indications are that businesses are very serious about deploying wireless applications." He said, “This is great news for operators, who see new revenue generating opportunities. However, there must be reliable, seamless and consistent coverage within structures of all sizes and building materials. Property owners and building managers of smaller as well as mixed-tenant buildings are beginning to realise that their tenants are coming to expect good-quality cellular service, with the costs amortised in the rental agreement. This has resulted in shifting dynamics of the in-building business model, which raises its own share of issues."