THE Bottom Line
When it comes to competitive intelligence in the base transceiver station (BTS) antenna sector, Linx has developed significant contacts and industry experience in this domain. We have helped our clients gain a thorough understanding of the global base station antenna market, in addition to the specific strategies, tactics, product management, and pricing models employed by key BTS antenna vendors.
The specific scope of our work in this area includes: turnover and operating margins for passive and active base station antennas; competitors’ price strategy / calculation schemes with respect to customer groups (operator, OEM, ASO); and competitors’ global and regional strategies with regards to product portfolios, sales activities, marketing and pricing.
Our research was designed to support the decision-making process within vendors and carriers by providing executives with the data and intelligence they need to make informed strategic choices.
For all of our projects, Linx relies on in-depth, double-blinded interviews with key executives at leading and niche players in the industry including vendors, service providers, customers and systems integrators / channel partners. Every study we complete is based on specific and detailed interview protocols established together with our clients that drive toward producing actionable intelligence.
What does our research show?
During the course of our research into the BTS antenna market we found industry executives describing seven (7) factors that impact the competitive dynamics of the base station antenna market either globally or in their local markets. These factors provide a useful “framework” to both describe your organization’s current competitive positioning and how your company can change the competitive dynamics of your industry.
These seven factors are:
Many in the BTS antenna industry know that certain manufacturers brands are associated with high quality BTS antenna solutions. For example, two of our CSP interviewees-- one in Western Europe (Vodafone Italy) and one in North America (Telus) provided us with comprehensive insights into the quality of BTS antennas produced by manufacturers on a global / regional and country basis. We received additional key information from various competitors, supply chain partners, and customers. From these interviews, it is clear that large Tier-0 and Tier-1 CSPs in developed markets continue to deal with industry leaders that are known for the quality of their BTS antenna solutions, even though such vendors' pricing may be 25% to 30% higher than their nearest competitor.
However, in emerging markets, CSPs are more willing to consider solutions from newer and lower quality vendors, if their product is accompanied by localized support that deals with antenna-related down-time.
We were able to gather comprehensive pricing information on all major BTS antenna manufacturers from a variety of our CSP interviewees. Many of the industry leaders in this space regularly offer different pricing in different regions globally, and would even occasionally offer different pricing within the same region for different customers, depending on the state of local competition. Leading BTS antenna vendors also conditionally offer specific performance and service capabilities based on what individual customers specifically valued. For example, if a customer valued faster delivery service (such as at AT&T in the United States), Vendor X would figure out how to guarantee delivery in less than Vendor X’s standard delivery period of 4 weeks.
(3) Localized Support
This aspect came out as another competitive factor for many of our interviewees. Here, among North American interviewees especially, we found that some vendors may need to enhance their local support presence. For example, we interviewed a US-based executive with Vendor X who noted that some of their key non-US competitors do not have a strong enough support structure for their customers in the United States. This statement was repeated independently by other interviewees, for example by staff at AT&T, about specific non-US vendors.
This insight is especially significant as we know from our interviews that Vendor X in particular would take advantage of this in their sales pitches, stating that while some non-US antenna vendors would be unable to provide local on-site support for customer issues such as antenna failures, Vendor X had an expansive local support operation in the United States that would shorten troubleshooting and resolution time drastically. Vendor X would leverage their ability to send support staff over to the client site in case of a failure within 24 hours, swap out the antenna or fix it in the field, whereas some non-US vendors would, according to our interviewees, have to send the faulty components to HQ, which would mean they would take several weeks to get it back.
(4) Localized Distribution
Hand-in-hand with localized support was localized distribution. Through our discussions with industry executives we determined that having local distributors and/or offices is definitely an important factor in determining how successful sales efforts will be in a particular country or region. For example, a Global Account Manager at a European BTS antenna distributor who was responsible for managing distribution channels for Vendor X's antenna products said that his company carries US$15 million worth of Vendor X's inventory in his market alone for the sole purpose of ensuring that customers in the local market receive their antennas within hours of their request, rather than the days or weeks it might take for antennas to ship from international distribution hubs. The existence of localized distribution points was also an important strength of a large company such as Vendor Y, which leverages its larger international presence and warehousing facilities to its advantage when it comes to BTS antenna distribution.
Services are becoming an increasingly important part of the value proposition that key players in this sector are offering to their customers, especially in emerging markets. For example, one of our interviewees at Etisalat in the Middle East said that Vendor X not only provides Etisalat with BTS antennas; at volume, its pricing will also cover site preparation, site delivery, installation, maintenance, warranties, and all costs associated with the full replacement of antennas if needed. He compared this to European-based competitors that only provide a limited range of services around installation of antennas and covering warranties in case of defects. In other interviews that we did with executives from Vendor X and Vendor Y, this service element stood out as being an important competitive advantage for these two companies, and is an important and effective tool for them to compensate for the lower quality product they offer to their CSP customers.
(6) Diversity of Product Portfolio
While we did get some feedback from vendor executive about the fact that he felt that some vendors did not have a diverse enough portfolio of BTS antennas, none of the interviewees we talked to felt that any specific vendor was lacking in this category. One of our Vendor Y interviewees said that all vendors to whom Etisalat sends its RFPs have always been able to meet their specifications for a wide range of antenna products. Nonetheless, we have included this factor in our assessment of the competitive positioning of key vendors in this market.
(7) Speed to Market
This competitive factor is a combination of three scenarios. First is a BTS antenna vendor’s ability to meet the project expectations of CSPs when it comes to their internal product roadmaps. For example, according to an engineer with Canadian CSP Telus, it is critical that delivery of antennas should closely match the carrier's product roadmap and CSPs actively seek to avoid a mismatch between delivery of antenna products and the CSP's internal product roadmap.
The second scenario is the lead time required to fulfill specific orders. Here, localized distribution channels with existing inventory allow vendors to meet CSP requirements quickly. As an example, a Global Account Manager with a Europe-based BTS antenna distributor said that Vendor X would offer an entire solution in their sales pitch, and not just an antenna. This all-in-one solution would include an antenna, cables, connectors, kits and tools. This would save the customer from being invoiced from many different suppliers, as all these components would be under one part number, would be invoiced together, and would be delivered much faster by Vendor X than other competitors.
The third scenario is the traditional “speed to market” of new product launches with new technologies. Here, our biggest insight is that while companies such as Vendor X are known to introduce innovative products into the market place, these are very quickly followed by Chinese vendors such as Comba and Huawei. So, any speed to market advantage accruing from product innovation is typically quickly eroded due to the quick response by competitors in this space.