Global Wireless Test Equipment Market Increasing Mobile Data Requirements from Smart Phones and Long-

Term Evolution (LTE) Development are Expected to Fuel Growth

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July 2013

Global

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Contents

Section Slide Numbers

Executive Summary 4

Market Overview 10

Total Wireless Test Equipment Market —

• External Challenges: Drivers and Restraints 20

• Forecasts and Trends 31

• Geographic Analysis 37

• Market Share and Competitive Analysis 41

• Segment Analysis 50

• Mobile Device Test Equipment 53

• Base Station Test Equipment 64

• Drive Test Equipment 72

• Mobile Backhaul and Wireless Core Test Equipment 79

The Last Word 87

Appendix 90

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Executive Summary

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Executive Summary

• In 2012, the total wireless test equipment market witnessed a growth rate of 9.8 percent over 2011,

and generated a revenue of $3,379.5 million. The compound annual growth rate (CAGR) is

expected to be 7.4 percent from 2012 to 2019, and the market is likely to generate $5,569.2 million

by the end of 2019.

• The growth and evolution of the wireless test equipment market is influenced by developments in the

wireless communications industry. Increased mobility and the ability to access the Internet and

download videos through mobile devices, are expected to continue driving demand for wireless test

equipment solutions.

• Rapid deployments of Smart devices, increased mobile data usage and Long-term evolution (LTE)

deployments are expected to continue driving the demand for wireless test equipment market.

• It is a well known fact that wireless technology is more complex than wire line and wireless networks

are much more prone to impairments compared to fixed networks. Due to the overall complexity of

wireless technologies, the need for test equipment is expected to increase going forward especially

with newer technologies such as LTE and LTE-Advanced (LTE-A) that bring in additional level of

complexity to networks.

• Testing becomes an integral part of bringing devices and services to market early because it is

critical to comply with industry standards and deliver high-quality products and services to their end-

users that not only meet, but exceed customer expectations. Source: Frost & Sullivan analysis.

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Executive Summary (continued)

•Test equipment is needed to help all the links in the entire supply chain: component manufacturers,

handset manufacturers, operators and laboratories that conduct compliance testing, helping them get

through the R&D cycle as quickly as possible, while ensuring the quality is good.

•Staying ahead of wireless operators in order to provide cutting-edge test equipment for new technology

deployments presents a challenge for wireless test equipment vendors. A test equipment vendor can

either be ahead of the technology curve or compete in a commodity-type environment by producing

low-end equipment.

•Maintaining robust support for existing technologies while pushing Forward with new technology support

is a challenge for service providers (SPs) as well as wireless test equipment vendors. SPs cannot simply

push forward with new technologies at the expense of existing technologies. They must ensure the

positive quality of experience (QoE) and quality of service (QoS) by continuing support of the existing

technologies while staying on the top of new and emerging techhnologies such as LTE and LTE-A.

Companies

•The Tier I companies covered in this research service include Agilent Technologies, Anritsu and Rohde

& Schwarz.

•Tier II vendors consist of LitePoint/Teradyne, Anite, Spirent Communications, Ixia, Aeroflex, JDSU and

National Instruments.

•Other players are Azimuth Systemsm EXFO, Tektronix, Keithley Instruments, Fluke Networks, DingLi

among others.

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Executive Summary(continued)

Wireless Test Equipment Market: Market

Segmentation (World), 2012

Source: Frost & Sullivan analysis.

The global wireless test equipment market is

divided into the following segments by product

type:

•Mobile device test equipment

•Base station test equipment

•Drive test equipment

•Mobile backhaul and wireless core test

equipment

Segmentation by geographic region:

North America: United States and Canada.

Europe: Belgium, France, Denmark,

Scandinavia, Germany, Italy, Luxembourg, the

Netherlands, Spain, the United Kingdom,

Hungary, the Czech Republic, Poland,

Russia, and Ukraine.

Wireless Test Equipment

Mobile Device Base station Drive Test Mobile

Backhaul & Wireless Core

Asia Pacific: Countries on the western border of the Pacific Ocean, including those on the Indo-Chinese

peninsula, the Pacific Islands and central Asia

Rest-of-World: Latin America (Brazil, Mexico, Argentina, and Central and South America) and regions not

mentioned above, particularly the Caribbean Islands, the Middle East, and Africa.

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Compound

Annual Growth

Rate

7.4%

(2012–2019)

Snapshot

Market Stage

Growth

Market Revenue

$3,379.5

M (2012)

Market Size for

Last Year of

Study Period

$5,569.2M

(2019)

Total Wireless Test Equipment Market: Global, 2012

Market Overview

For a tabular version click here. Stable Increasing Decreasing

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

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Executive Summary—CEO’s Perspective

2 Increasing mobile data requirements

attributed to the high adoption rates of smart

phones provide market opportunities.

3

4

Companies are adopting direct distribution

channels for sales, due to an increasing

global presence strategy and growing

demand for wireless test solutions.

5 It is important to identify and focus on the

growing and changing end-user requirements.

1 LTE and LTE-A technologies driving demand

for test equipment.

Source: Frost & Sullivan analysis.

Quality, reliability, and technology are the

key competitive factors in the wireless test

equipment market.

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Market Overview-Definitions

The evolution of the wireless test equipment market is influenced by developments in the wireless

communications industry. Current trends, such as increased mobility, explosive mobile data traffic growth

coupled with increasing adoption of smart devices and imminent LTE and LTE-Advanced deployments are

expected to continue driving the demand for wireless test equipment .

The wireless test equipment market had a number of hurdles in the past, however, it fully recovered in 2011

mainly driven by improved global economic situation and technological developments such as increasing 3G

adoptions and, most recently, the LTE technology. The market is likely to continue growing at 7.4%

compound annual growth rate (CAGR) from 2012 until 2019 as the telecommunications industry is rapidly

moving toward 4G technologies.

This study discusses and analyzes the various types of test equipment and technologies that are likely to

drive the growth of the wireless test equipment market.

The global wireless test equipment market is divided into the following segments by product type:

•Mobile device test equipment

•Base station test equipment

•Drive test equipment

•Mobile backhaul and wireless core test equipment

The definitions of each segment of this study are included below.

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Market Overview—Definitions (continued)

Mobile Device Test Equipment

Test equipment covered in this section includes systems used in testing mobile user equipment and

services. These devices include benchtop and single-box testing systems used to test the

performance, protocol, and capability of cellular access devices, such as cell phones and

Smartphones, as well as connected devices such as laptops, netbooks, notebooks and tablets,

wireless-enabled PDAs, and so on.

There is a sub-segment called one-box testers, which are simple performance protocol testing

solutions.

Conformance or certification testers are also included in this section. These solutions are used to test

protocol implementations and to check if the equipment conforms to standards. This segment also

include design validation as well as compliance testing that is performed during the R&D stage of

product lifecycle.

Interoperability testers are used during the R&D stage of the product lifecycle and are used to verify if

the equipment works as intended. These solutions also check whether or not the equipment performs

with network equipment from various vendors.

Radio frequency (RF) conformance testers are included in the scope of this study. The main function

of this equipment is to verify if the radio implementation or physical layer implementation conforms

with standard requirements. This type of test equipment represents a rather small part of the overall

wireless test equipment market for R&D applications. These systems are expensive, thus they are

purchased in small volumes.

Frost & Sullivan analysis.

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Market Overview—Definitions (continued)

Base Station Test Equipment

A base station is a fixed transmitting or receiving station for cellular phones, paging services and other

wireless transmission systems. A base station is also known as an access point or

transmitting/receiving location in a wireless local area network (WLAN). RF spectrum analyzers and

signal generators are examples of base station test equipment. Base station test equipment

encompasses feature and functional testers and protocol conformance testers that are used during

the R&D stages of the product lifecycle. Such equipment usually includes an antenna tester and a

spectrum analyzer, which is often a GPS receiver.

Drive Test Equipment

Drive test equipment refers to portable tools used for indoor and outdoor diagnostics and

troubleshooting of wireless networks. These testers obtain RF coverage and service performance

measurements, provide wireless data measurement options, and enable optimization for data

applications. They also enable early verification of network deployments and provide true cross-

technology scalability on a single platform.

Besides benchmarking and trend analysis, there are several other applications where drive tests are

performed. These include network optimization, acceptance testing expansions and new technology

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Market Overview—Definitions (continued)

implementation evaluation as well as scan drives for engineering maintenance. Even at the early

stage of network construction, drive testing is a major way to evaluate network conditions.

Mobile Backhaul and Wireless Core Test Equipment

The mobile backhaul segment covers test equipment, including fiber optics used to test Ethernet

and IP switching and routing-transport mechanisms between radio base stations and the wireless

core network.

The key areas that must be tested and validated are:

Layers 2 and 3: While the Third Generation Partnership Project (3GPP) does not require a specific

configuration, it allows various network and transport-level options to be used. At the initial stage of

the deployment process, there is a need for a multi-technology testing and validation of transport

layers.

IPv6 deployment: Even though Internet Protocol version 6 (IPv6) is required for LTE, networks

continue to use IPv4; therefore, development of combined IPv4 nodes and possible dual

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Market Overview—Definitions (continued)

IPv4/IPv6 stack systems for deployment is expected in the industry. Today's mobile devices are

expected to support both IPv4 and IPv6 and connect at the same time to IPv4/IPv6 packet data

networks, so IPv4/IPv6 integration must be carefully tested.

IP-routing: Network addressing is a challenge in the IP realm. Mobility management entities

(MMEs) are expected to support thousands of eNodeBs positioned across numerous private or

public networks. Random and methodical addressability tests are necessary for the evolved

packet core architecture (EPC).

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Market Overview—Key Questions This Study Will Answer

Is the market growing? How long will it continue to grow and at what rate?

Does the wireless test equipment market present future opportunities to vendors?

What are the key drivers and restraints that will affect this market during the forecast period?

What are the technology trends in the global wireless test equipment market?

Does the existing wireless test equipment meet end-user needs?

Which are the market participants to watch for?

Source: Frost & Sullivan analysis.

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Disclaimer

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Appendix

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Market Engineering Methodology

One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They

are based on our proprietary market

engineering methodology. This approach,

developed across 50 years of experience

assessing global markets, applies

engineering rigor to the often nebulous art

of market forecasting and interpretation.

A detailed description of the methodology

can be found here.

Source: Frost & Sullivan research.

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For Additional Information:

Jeannette Garcia

Corporate Communications – North America

Direct: +1.210.477.8427

Email: jeannette.garcia@frost.com