First LTE Rollouts Are About Experience, Not $$

Global momentum behind LTE is white hot, according to a recent survey by Informa Telecoms & Media, and almost 60 percent of global operators surveyed said their 4G services will cut over this year (33.7 percent) or next (24.9 percent).

However, the vast majority – 70.5 percent – believes there is a viable business case to launch 4G today, Informa notes.??Three reasons why operators are launching LTE:

>> To create new revenue streams (34.7 percent);
>> To increase capacity to offer mobile broadband services (23.3 percent); and
>> To build brand value through technology leadership (31.3 percent). ??However, even though subscribers have voiced the need for data speed, they don’t want to pay for it.

“Because LTE technology, at the moment at least, is an extension of the mobile broadband experience, initial evidence suggests that mobile users aren’t prepared to pay a significant premium for LTE access,” says Paul Lambert, senior analyst. “Most of the operators that have been successful in signing up LTE subscribers have decided not to charge a premium for 4G access but, instead, are bundling it into existing data plans.”

He continues, “When operators have done this and effectively communicated the benefits 4G offers, market reaction has been very positive. This indicates that 4G should, in the first instance at least, be seen as a way to improve the overall mobile broadband experience rather than as a way to generate ‘new revenues.’”??

LTE rollouts to date also highlight the problem of spectrum fragmentation between regions and within regions between countries. While most LTE rollouts are in the 2600 MHz band, North America and Asia Pacific are deploying LTE in their own bands.

Informa says Europe is focused on 800 MHz and 2600 MHz, with 1800 MHz rollouts to follow. While the vast majority of LTE rollouts to date have been FDD-based, LTE deployments using TDD spectrum have taken place in such countries as Poland and Saudi Arabia.?