Telecom Sector Accelerates European DC Power Systems Market

Mar 1, 2007 12:00 PM

The telecom sector's adoption of new technologies, particularly wireless and wire-line applications requiring dc systems to power their needs, will be a key market driver of the European dc power systems market, according to a recent report by market research firm Frost & Sullivan. The report, “European DC Power Systems Markets,” projects that the European market will grow more than 7% from 2006 to 2013, with telecom end users showing the highest growth rate. In 2006, this region's market earned revenues of nearly 550 million euros, according to Frost & Sullivan, which estimates that number will grow to 887 million euros in 2013.

“The accelerated deployment of high-speed Internet access networks, triple play, rollout of fixed lines, high broadband penetration, IP networking and adoption of new technologies will boost demand for backup power dc systems,” said Mahesh Venkateswaran, a Frost & Sullivan research analyst. “Demand in equipment size will vary according to the application, with a large part of the demand deriving from small and medium systems below 15 kW.”

The biggest challenge for dc power system manufacturers will be to stay competitive amid the changing pricing pressure, reports Frost & Sullivan. This pressure will come in two ways: firstly, from the varying cost of components that make up the complete system (rectifier and copper among others), and secondly, from low-cost competitors in the market.

“While the price of rectifiers has fallen by approximately 20% to 30% in the last year, the price of copper, used for wiring in the system, has risen nearly twofold in the market,” Venkateswaran explained. “Considering batteries are sometimes supplied by the major manufacturers, their cost will also affect the overall pricing.”

Frost & Sullivan suggests that strategies to counter this challenge include manufacturing in low-cost countries, design optimization to reduce usage of copper and sheet metal, incorporation of more features, improvement of post-sales services and the provision of comprehensive solutions. Although low-cost manufacturers are not the preferred choice due to their low product quality and weak service networks, the market research firm predicts that over time such manufacturers threaten to capture a sizeable share of the market. For more information, see www.frost.com.

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