Despite mixed signals, LTE is on a roll
When it comes to mobile-data growth and the move to LTE, the message has become a bit muddled — at least this week. On the one hand, the U.S. market is buzzing along in terms of data growth and Verizon Wireless is launching LTE in 38 U.S. markets by the end of the year. But in Europe, at least one major leading analyst firm, Analysys Mason, claims that moving to LTE now may not be the best move because data growth actually is slowing there and operators easily can meet data demands and make money without a huge investment in LTE.
“There is a lot of exaggerated talk about mobile operators facing massively increasing pressure on their networks, and having to use every resource possible to make costs, revenue and traffic growth align. The problem with the view that there is a huge impending wave of mobile data is that it does not correlate to measured traffic on mobile networks,” said Rupert Wood, principal analyst at Analysys Mason, in a release.
The firm states that while mobile data traffic in Europe grew by 110% in 2009, it’s only projected to grow 35% in 2010, with no real prospect of picking up in 2011.
Meanwhile, analyst Chetan Sharma, who tracks mobile-data usage in the U.S. on a quarterly basis, said that third-quarter mobile broadband traffic has grown 25% year-over-year. He predicts that total U.S. mobile data traffic will exceed 1 Exabyte for the first time by the end of 2010.
What does this mean for LTE rollouts? Not much. Even if operators in some markets don’t see the need for LTE, they are moving that way anyway if they have spectrum. According to Phil Marshall, head of Tolaga Research, it’s a no-brainer for operators to deploy LTE if they are sitting on spectrum.
“Generally speaking, you should run as fast as you can,” Marshall said. “You want to come to market quickly as the ecosystem for LTE emerges, and you want to move quickly because you get a double hit: you are using spectrum and resources with efficient technology.”
That’s not to say that some operators won’t go slowly. AT&T still is investing heavily in HSPA+ and appears to have a dual mobile-broadband strategy that will see HSPA+ and LTE go hand in hand. Verizon is moving full speed because CDMA is at the end of its life in terms of innovation. In Europe, governments are auctioning off spectrum, and major operators don’t want to be left out. Many are deploying in rural areas first.
The LTE ecosystem is now burgeoning to a point where operators can’t afford to wait, which is good news for vertical markets and public safety.
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