A few months ago, we had observed that carrier consolidation in the US will become a dangerous affliction for hardware makers, especially those who are tied closely into the incumbent ecosystem. It was natural, for few buyers and lot of sellers meant that power was shifting to the big boys.
An early sign of trouble could be found in the announcement made by Carrier Access Corp. (CACS), a key broadband equipment maker, especially in the wireless space. While nowhere as large as Nokia, Siemens or Ericsson, the company is an important supplier to the likes of Cingular. After the market close today, the company announced that due to weak orders it was lowering its third quarter forecast. It blamed unnamed customers pushing out their “projects” to 2007.
Even though it is not clear which customer of CACS has decided to push out their projects to next year, the word on the street is a big carrier (take a guess) could be slowing down its 3G rollout, a move that could impact the 3G ecosystem. (It is unlikely to impact the US carriers that are using CDMA-based 3G technologies on their networks.) Some had expected that company would do well especially in the light of Advanced Wireless Spectrum (AWS) auctions.
2 thoughts on “Warning, 3G(SM) Delays Ahead”
Cingular slowing down 3G in the face of Sprint and Verizon EVDO Rev A and Sprint WiMax would be pretty crazy, but crazier has been done before in the industry. That said, CACS makes backhaul equipment and it could be that Cingular found a way to roll out 3G to a lot of sites without increasing backhaul — maybe by removing either the Cingular or old AT&T Wireless BTS in cases where they were colocated and reallocating the existing backhaul to 3G. This would allow them to push out a major project to upgrade backhaul network-wide without slowing the 3G rollout.
Jesse is correct. Cingular is in the midst of turning down their TDMA network and can repurpose the backhaul pipes. Cingular cannot afford to let Sprint and Verizon Wireless slip to far ahead. Sure, they’re behind but they should be boosting up their 3G rollout by the end of the year.
Another tidbit I caught today – perhaps just PR chest beating from First Avenue – they have a backlog of backhaul orders from the carriers.