Wireless metamorphosis

The wireless infrastructure industry is in a period of metamorphosis, according to ABI research. It is characterised by a shift from a hardware-based base station manufacturing industry to one based on software and services.

The base station hardware isn't the 'big thing' any more as these are all becoming software-configurable. The hottest area now is whatever you use to carry messages, route messages and attach value to them.

That is why, according to ABI, about a year ago, Alcatel bought WaterCove Networks - it had the kinds of technology that the coming wave of infrastructure would require. Now everyone is attempting to do the same thing - it's becoming an important part of the value chain for service providers.

One result of this change from hardware to software, the kind that allows a base station to be upgraded from GSM to GSM-EDGE just by downloading and installing certain algorithms, is turning out to be enhanced profitability for most hardware vendors in the space.

However, they face incoming competition from abroad, notably from two Chinese vendors - ZTE and Huawei - which may affect profitability results by the end of this year. The seriousness of such low-priced competition from the Far East depends on the interplay of many factors, including such basic ones as China's access to industrial fuels.