2G and 2.5G wireless infrastructure is alive and well and living in the developing world. With most mobile telephone infrastructure markets in industrialized nations near or at saturation levels, wireless base station vendors are looking further afield, all the way to China, India, and other fast-growing markets in Asia, Africa and Latin America.

The problem with addressing such markets is their low wage/low price economies. Unable to leapfrog directly to 3G because of its high upfront cost and small cell size, operators in developing markets need efficient and easily upgradeable 2G/2.5G networks.

According to Lance Wilson, ABI Research director of wireless infrastructure research, "The major infrastructure manufacturers have to be very clever in producing cost-effective 2G and 2.5G systems for developing markets, because there isn't a lot of money to spend."

An example cited in the latest market update of ABI Research's Wireless Infrastructure Research Service demonstrates that some vendors are rising to meet the challenge.

Ericsson's "Expander" program requires 30-40% fewer cell cites than traditional GSM networks, promises reductions in both CAPEX and OPEX, has a clear upgrade path to 3G, and is designed to be profitable at monthly subscriber fees as low as US$5.

The update examines the several elements of the Ericsson Expander in detail. "The Expander system allows installation and expansion of 2G/2.5 networks in an exceptionally cost-efficient manner," says Wilson.

This kind of wireless infrastructure appropriate for the developing world is more than just smart strategy; it may help mitigate the effects of the overall wireless infrastructure market trend which, according to the updated forecasts contained in the study, continues to stagnate from an overall standpoint. Only the WCDMA and CDMA2000 1x EV-DO sectors defy the market's general flatness.

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