TETRA expected to grow at nearly 20% CAGR
TETRA, or terrestrial trunked radio, is a standard developed by the European Telecommunications Standards Institute for mobile radio communications used by public safety, utilities, transportation and industrial users and the defense market. TETRA standards incorporate technologies such as GPS and Bluetooth for increased functionality. Although the technology has a global footprint, it is more widely adopted outside the U.S. due to a history of intellectual property rights disputes. In Europe, TETRA has substantial support from regional governments.
Here are three current TETRA market trends:
Substantial market growth expected. According to Grand View Research, the TETRA market was worth about $1.5 billion in 2016 and is projected to boom, with a compound annual growth rate of 17.8% through 2025. TETRA software is expected to grow particularly quickly, with applications such as fingerprint scanning, call priority in congested situations and others being implemented by manufacturers.
“Growing demand for secure communication and safety is one of the key trends escalating market growth,” according to Grand View. “Additionally, [an] influx of smartphone applications for public safety is further fueling demand for TETRA-approved equipment.”
While Europe holds the lion’s share of the TETRA market, Grand View says that TETRA use in Asia-Pacific will grow faster than the rest of the world due to “demand for public safety and developed IT infrastructure,” as well as “soaring adoption” of TETRA by utilities in the region.
Market consolidation. There has been some notable consolidation in the TETRA space over the last couple of years, with Motorola Solutions buying European TETRA network company Airwave in 2016 for $1.2 billion. Chinese radio OEM Hytera Communications picked up U.K.-based TETRA provider Sepura Group in 2017 for about $92 million. Hytera has tried to make inroads in the U.S. market, where its relationship with Motorola has a testy legal history – including a case currently pending in U.S. District Court in New Jersey in which Hytera is suing Motorola for allegedly suppressing two-way radio competition in the U.S. and “building a moat to prevent competition [with its P25 products] from alternative technology standards” including TETRA and Digital Mobile Radio. Motorola has asked for the case to be dismissed.
Grand View identified the high cost of TETRA systems and licenses as barriers to market growth.
Intersection with LTE? Some companies see an eventual migration of TETRA to LTE. ETELM, a French communications company that allows TETRA technology to connect to an LTE core, said that as far back as five years ago, its critical communications customers were anticipating a greater role for mobile broadband – and that company saw LTE as the ideal platform for adding mobile data capabilities while incorporating TETRA services.
“It seems to be that 4G, and future enhancements of 4G, are the future path that most critical communications users have accepted now and are adopting,” said Paul Ward, international sales director at ETELM. Now, he added, standards for mission-critical voice and data are being added to LTE as well and will eventually make LTE even more attractive to such users.
“What we think is, over the next three to five years, there’s going to be a hybrid approach by a lot of mission-critical users such as police, utilities and transportation,” Ward said. “They will see that there is still a communications benefit of having either TETRA or P25, in addition to the new services for data from LTE.”
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