Digital, Broadband to Drive PMR Market Demand
Tuesday, October 11, 2011 | Comments
By Thomas Lynch
The worldwide professional mobile radio (PMR) market is forecast grow over the next five years, and even with the recent economic woes, the European market is no exception. In fact, from 2010 to 2015, European terminal shipments are predicted to grow at a compound annual growth rate (CAGR) of 6 percent with revenues increasing also, representing the strength of the PMR market in this region. The PMR market is undergoing reconsolidation as new technologies, legislation and increased usability requirements are beginning to shape the future. Operational commitments are increasing as are the requirements placed on suppliers for efficiency. This coupled with the post-effects of the 2008 recession show a global marketplace that requires mobile radio equipment suppliers to be more focused in providing the solutions required by the end customer base.
In Europe, these issues have had a direct impact on the marketplace, and providers of mission- and business-critical devices have had to adapt to the challenges that face them. That said, the manufacturers and suppliers of mobile radio devices have adapted well and continue to release new products and upgrades (often digital).
The Migration to Digital
After decades of dominance, the analog licensed mobile radio market is now approaching the limits of its innovative life and is entering a phase of decline as users migrate to digital technologies. The range of analog radios is likely to be one of the last cycles of analog development as manufacturers focus research and development (R&D) on digital devices, with only replacement rates holding up this market. Analog still meets the needs of much of the nonmission-critical market; that is, it provides instantaneous voice communications at a low cost.
However, analog two-way radio has limited battery life, degraded voice quality at the edges of coverage and lacks integrated data applications. It suffers from a lack of inherent signal security, which some end users require despite not being in a mission-critical organization. As other commercial technologies progressed, so did the demand for data applications and advanced features in the mobile radio industry. There was a need for a structured, standardized digital solution that could meet the increasing needs of the market but without the costs of high-end digital systems designed primarily to meet the needs of mission-critical organizations. Digital mobile radio, in particular the newer technologies of Digital Mobile Radio (DMR), dPMR and NXDN, presents a number of established benefits over its analog counterpart at price points that aren’t too different.
Digital technologies are providing the market with the solutions and features required and it is predicted that digital technologies will see significant growth over the next 10 years. TETRA, Europe’s leading digital technology, is now considered mature; however, there remains a substantial market opportunity for upgrades and for more users to be added to existing systems and in the less developed regions of Europe, possible whole new systems.
The success of DMR technologies, and other cost-optimized systems (NXDN/dPMR), has also provided an alternative to the traditional digital offerings in Europe that can compete with analog on cost. The next stage for the European market is for enhanced broadband data services. With regards to digital technologies, Motorola is the market leader in Europe. EADS, Sepura and Selex are the other major players.
The latest data from IMS Research confirms that for the European region, the migration to digital is not only set to continue but also increase in pace over the next five years. It is estimated that the European installed base of digital radios is projected to increase from approximately 25 percent of the total LMR installed base at the end of 2010 to more than 50 percent by the end of 2015, with this trend set to continue. This is the highest rate of migration of any region including North America, where digital take up has also been strong.
There has been considerable interest regarding data usage in mobile radio systems over the past few years among those within the public safety, transportation, utility and other related industries. Many officials are beginning to integrate more data applications into their day-to-day activities. Commercial broadband technologies offer hundreds of times the throughput on the latest mobile radio networks. These high-speed networks have the ability to transform the way many of these organizations function, via bandwidth-heavy applications such as real-time video.
This has opened up many debates throughout the European PMR industry as to which will be the successful broadband solution. Long Term Evolution (LTE) appears to be the forerunner here, and it is accepted that LTE, used with Project 25 (P25), will provide the high-speed data solutions required in the United States. In Europe, there are many obstacles, including issues surrounding the harmonization of spectrum, and frequency-spectrum allocations specific to the PMR marketplace. Other technologies exist, such as TETRA enhanced data service (TEDS) and the proprietary overlay systems for P25, but these systems are considered more as a mid-term solution because they do not offer the data rates and bandwidths associated with broadband.
IMS Research predicts that the data requirements of end-users will, in the near-term, drive the market toward digital technologies. IMS Research predicts that, although LTE is required, the needs of traditional PMR markets will alleviate any chance of a whole system overthrow, and that a hybrid LTE/PMR market solution will evolve as the PMR standards adapt. Ultimately, the success of a broadband solution for the European PMR market will depend on the ability of regulatory bodies and governments to allocate spectrum to mission-/business-critical users. Further, although there is speculation of a possible digital dividend in some countries, the harmonization of spectrum throughout Europe may prove the overriding factor in the successful implementation of a broadband solution in the next decade.
Suppliers of solutions to the European licensed mobile radio market are looking to incorporate data applications more and more. Up until now the range of applications offered was limited because the primary use case is instantaneous voice. Traditionally, there are have been few options available to end users — analog networks are essentially incapable of offering data, and high-end digital technologies can be too expensive for organizations other than those with public-safety and security functions to justify the additional benefits of data. Therefore, there have been circumstances where end users within Europe have migrated to cellular as a secondary communications channel for their data needs.
However, professional mobile digital radio does offer a suitable range of data services, such as man down, GPS, text messaging, group calls and call management, all with the reliability and security demanded by end users. As such, after the short-term fix approach of using commercial cellular networks to address data needs, IMS Research predicts that private networks based on traditional LMR technologies and LTE will be widely used.
The European Market’s Future
As previously discussed the future of the European PMR market is looking favorable. Digital technologies in particular will drive this success and the European market will become, where it is not already, a target market for companies outside of Europe as well as the existing key suppliers.
Data and features are key to the future innovation and success of digital technologies, and more importantly broadband applications. The need for high-speed data video streaming will drive the implementation of broadband, but IMS Research predicts that private LTE network rollout will be limited over the next five years and will experience much wider uptake toward the end of the decade.
The migration to digital, the demand for data, new methods of working and increased efficiencies are all factors that will drive the European market over the next five years, ultimately to the benefit of suppliers and end users alike.

Thomas Lynch is the lead market analyst for the professional mobile radio and broadband division at IMS Research. IMS Research is recognized globally as a leading contributor of PMR research and consultancy. Email comments to
Editor’s Note: A shortened version of this article ran in “Global Forum” in the Quarter 4 2011 issue of RadioResource International

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