The mobile radio market - The year 2012 in review
Last year was a good solid year for the PMR industry with some interesting developments and announcements expected into the future.
My name is Thomas Lynch and I am the lead analyst for PMR/LMR at IMS Research. I have worked in communications for nearly 15 years now as an operator, maintainer and communications intelligence analyst. I now have the absolute pleasure of truly understanding the market for our professional communications equipment through spending 100% of my time devoted to analysing past and future trends. As such I feel 2012 has been a good year for PMR and I wanted to capture this in a format beyond our in-depth and detailed annual market reports.
Having attended IWCE, TWC, the PMR Summit and the International Russian PMR shows this year, I felt it was about time I put some thoughts together on some of the current themes in our industry.
Although each show had a very different feel to it, with local and regional discussions apparent, the key topics of conversation without doubt have been the move to LTE and the digital transition.
In North America, and in particular at IWCE, it was a real coincidence that, during the weeks before the show, the D Block allocation and $7 billion funding was announced by Congress in the middle-class tax relief and job creation bill. This was great timing and created quite a spark at the show with much discussion on implementing and regulating LTE, rather than on the spectrum and financial issues that take up most of the conversations elsewhere in the world. Motorola had announced the first LTE device for the PMR market in the LEX 700 and really provided the first indication of how phase one of the LTE transition would be positioned. That device is introduced as an addition to agencies’ current PMR devices, which in the case of North America are mostly P25 devices for public safety. This was an interesting development as there was (and still is) much talk on what shape and form an LTE device would take; and whether manufacturers would be gearing up to provide a one-solution-fits-all device or have a two-device approach. I must say I was pleased to know that the latter was the case and that end-users really do want to keep their trusted traditional LMR devices for now, meaning my forecasts over the next five years remain fundamentally sound! However, whether this is end-user driven or just the case that the technology for a one-device solution is just not yet available (battery consumption, VOIP, direct mode over LTE, etc.), it does create a smoother transition to LTE for our market, with PMR users knowing what options are available. Further, agencies can make investment into LMR (data or otherwise,) knowing this will be a safe bet and good value for the next five to ten years (although this mostly depends upon who in our industry you speak with!).
As the United States now has the spectrum, the funding and devices to match (including the Harris’s In Touch RPC-200 LTE Device), we expect and have already started to see deployments of LTE networks from FirstNet, heading into the back end of the year and into 2013. This is good news for our industry; thank you, the US, for leading the way on this one. For the US in particular, IMS Research believes that this market really will lead the way and be a major contributor to our recent forecast on private LTE solutions. Table 1.1 shows that the world market is set to increase exponentially to 2015, with further rapid growth to 2018; this is a new market opportunity in PMR with further potential still.
Crossing to the other side of the world, TWC was also very interesting. Most of the exhibitors were showcasing, in one form or another, a LTE solution. Some found it interesting; others, confusing.
For an end user with limited knowledge of our market, one would be forgiven for assuming that a mass roll-out of LTE systems was already happening. Key exhibitors were showcasing LTE solutions; however, most were rather conceptual, leaning towards what is possible rather than what is already a reality. It is good for agencies to think ahead with regards to their network planning; however, this approach can often confuse the agencies that may be looking for a simple analogue to digital phased conversion!
The theme of this show was that there really are major obstacles to overcome in achieving a scalable and thus cost-effective LTE solution in EMEA .Lobbying of all agencies from the various stakeholders from around the world was ever apparent. Interestingly, this is bringing the LMR industry together. Public safety officials have been seen quoting the importance of the requirements of utility companies; and transportation officials are starting to discuss shared solutions, unlike in the past where we have seen rail networks’ GSM-Rs type solutions differ from the other PMR markets.
With this level of engagement and a strong argument from each of the major PMR user segments, it really should be no time before we start to see our regulators and governments announcing plans to free up spectrum and provide funding…or not!
Real problems are still present for the rest of the world to differing degrees; however, it is the Eurozone that has the toughest battle. Obtaining any spectrum, let alone harmonised spectrum throughout Europe will prove very difficult and then gaining funding during these austere times will make the battle even tougher. Like most markets, especially markets driven by public funding, there is direct relationship between the LMR market and economic woes. IMS Research estimated that shipments of PMR radios declined by nearly 10% in 2009 from 2008 estimates, as shown in Table 1.2.
These problems do need to be overcome; but I guess it will take time, and it was only right that a call to action was presented during TWC this year. Other than LTE and the data phenomenon, the location for this year’s TWC could not have been better chosen. The Middle Eastern market in 2011 has had one of its strongest years ever for PMR and this strength is set to continue. Although one could argue there is not the money in this market that there used to be, we are still certainly seeing double-digit growth in some technologies and expect this also to continue. There was also considerable interest from agencies in the Middle East in the pathway of our market to LTE, where I got the impression that some were waiting for Europe to move before making the plunge themselves. However, there were definitely others (fewer maybe) that would make the move to enhanced data systems if the solutions were actually available and not just in conceptual mode.
This brings me on to the PMR Summit in Barcelona during September 2012. IIR had done a good job in the summit’s evolution after only one year and in co-locating the Professional LTE Summit (a good tactical move that I would say paid off, as the LTE streams were often twice as busy as the PMR ones!). It did, however, give various representatives new to the PMR industry some useful insights on our market and offer the opportunity to share thoughts on the future of LTE. There were indeed some rallying cries during this 2-day conference. Hopefully this will spearhead our ecosystem in 2013 and generate some real progress over the next few years, ready for the world radio conference in 2015, when we should know much more!
I mentioned at the start that I have also attended the PMR show in Russia recently. As we all know, the Russian (Eastern European) market is slightly different to that in the rest of the world and has some unique features. The transition to digital is evidently slower in Russia than in the other developed PMR European markets, for example; however, there is a real appetite for digital and for upgrading PMR systems. It was, in fact, light relief to witness real debates on the merits of DMR, TETRA, P25, dPMR and Analogue without the confusion of LTE thrown in. It was apparent that the Russian market is well aware of the oncoming phenomenon of LTE; but for now agencies want to concentrate on choosing the best LMR systems to fit their needs, worrying about broadband data later. Of the LMR technologies, there really is no real winner. Russia will become a multi-technology market with P25, TETRA, DMR, dPMR and Analogue all taking their place. That said, it does seem that DMR has a real advantage and there was much talk of the merits of DMR during the conference. If I was to be honest, most of the conference was pitched on both TETRA and DMR and not much on any other technologies; but we are aware that other technologies really do have their place. Like the Middle East, Russia is a development market for PMR at the moment and for the first half of 2012. I have noted real growth in this market place. An example of this is in TETRA technologies, where in Table 1.3 (taken from the IMS Research TETRA Terminals 2012 report) we see that TETRA is predicted to grow significantly over the next few years.
As our TETRA forecasts indicate, 2012 and the next few years are interesting for Russia. However, Russia is not alone; development over the next few years will also be quite interesting in other regions.
So with the strong growth of PMR and the event of LTE I would say 2012 has been a good solid year for the PMR industry with some interesting developments and announcements expected into the future. With the event of LTE, PDT, TETRA TEDS, DMR Tier 3, a new positioning of dPMR and P25 Phase 2, 2013 should be as exciting as 2012; and I, for one, look forward to the next few quarters of data and next year’s conferences and exhibitions to see how quickly we move on!
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