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Exciting Regional Opportunities and Challenges in the DC Power Systems Market : A Snapshot of Trends in Africa and Latin America

  • November 2014
  • 33 pages
  • Frost & Sullivan
Report ID: 2488503

Summary

Table of Contents

Key Findings

Despite market maturity in Europe and North America, DC power systems are gaining momentum in untapped telecom markets, such as Africa, the Middle East, and Latin America.
The highly competitive market is expected to shape itself into a dynamic space for market activity.
The competitive landscape is becoming more complex, and is dominated by both telecom operators and original equipment manufacturers (OEMs).
Typically, telecom vendors bundle telecom equipment with backup power equipment. This bundled offering is often unavailable to most DC power system OEMs.
This snapshot highlights market opportunities by separating captive market share from opportunities available to all vendors.

Key Takeaways

The market has expanded to include large, global telecom equipment providers as competitors.
The bundling of DC power systems with telecom network equipment sales has created an additional sales avenue.
The increased presence of telecom equipment providers can threaten opportunities for OEMs.
Intense growth is expected in Latin America and Africa due to the significant opportunity for LTE Advanced and the evolution of 4G.

Key Market Drivers Explained

High Demand from Latin America and Africa
Latin America and Africa lead other regions in infrastructure development. An understanding of the best practices among competitors has showed that some of the greatest success stories are from these regions. With intense government interest in fostering the growth of telecom infrastructure, each region is expected to be a hot market for the next xx years.

Increasing Need to Expand Wireless Infrastructure
Latin America and Africa are witnessing an increased need to expand their wireless telecom infrastructure without making significant investments in wireline infrastructure build-outs. This provides many benefits, attracting opportunities for growth and foreign investment in the aforementioned regions.

Emphasis on the Rising Need for Reliable Wireless Networks
As wireless networks gain greater penetration, the next phase of investment in Latin America and Africa is expected to arise from an increased focus on network reliability. As each region benefits from greater connectivity, they will witness more economic growth. As more businesses penetrate operations in these regions, network reliability will play a critical role in attracting investments. To secure a highly reliable network, these regions require a sound understanding of backup power systems and the options available to facilitate the smooth and seamless functioning of businesses.

Key Market Restraints Explained

Economic and Political Uncertainty
The African continent is a volatile one that experiences several socio-political changes and may not always have a consistent pattern of growth. The risks involved in investing in the region should account for the fact that, in some unforeseen instances, investments may come to a standstill depending on the political climate. Historical evidence has shown that the region has witnessed a steady increase in investment from 2009, and this trend is expected to continue through the forecast period (2015–2021).

High Energy Costs
To sustain existing power demands, end users pay a price premium, primarily due to the high energy costs. Prices per kilowatt hour (kWh) run from xx toxx cents in Latin America and Africa while it is xx cents in Florida. Building the supporting power infrastructure will lead to high capital expenditure. Hence, large investments are being put on hold till a better economic climate emerges.

Competing Solutions
DC power systems are expected to witness competition from technologies such as diesel generators and hybrid, solar, and wind-powered backup power systems. This will aid the growth of telecom backup power markets due to the comparatively high capital and maintenance costs involved. Competing technologies are positioned to have a high upfront cost but a low cost of operation and maintenance.

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