7 April 2011

Analysis: there's no killer app for LTE

It's easy to get excited about the latest whizz-bang technology but, if industry analyst Matt Walker from research company Ovum is to be believed, LTE -- next-generation mobile technology -- won't be here for years, and even when it does, the benefits might be smaller that you would expect.

LTE (or Long Term Evolution) is now officially the next generation of mobile wireless technology: 4G. The industry holds out promises of a DSL-style experience on your phone with up to 100Mbps. But Walker, who was speaking at NetEvents' Asia Pacific conference in Langkawi, Malaysia, told the audience of press, analysts and industry vendors, that Ovum's analysis found that there will be few direct benefits for mobile users from LTE for some considerable time.

Real-world data speeds are more likely to be in the region of 20Mbps, according to Walker. And instead of LTE, the big growth area will be HSPA+, which uses 3G foundations to deliver theoretical speeds of up to 84Mbps -- almost as much as LTE's headline figure.

"There's no killer application for LTE", Walker said. The main benefits of 4G accrue to the mobile operators, and include a cut in costs because of better spectrum efficiency, a simpler network architecture, the use of all-IP technology, and what he called a self-organising network.

In other words, LTE will enable operators to cope with the data tsunami that they're experiencing as a result of the huge take-up of smartphones. Walker predicted that the operators' revenues will increase by 9 percent annually to 2015 while data volumes will grow by 92 percent over the same period.

There's an irony here: operators sold the idea that users could get as much data as they liked, anywhere, any time but didn't expect people actually to take up the offer. The smartphone is the fastest growing category of mobile device and they're all sucking large volumes of data, which the operators' networks were not designed to deliver and they're cracking under the strain.

However, said Walker, LTE will help to fix that problem by making the operator's networks more efficient but "it will take time and money", and "it will be hard for operators to charge more for faster speeds as user expectations have been conditioned by DSL." As a result, he said, the operators will experience "no new revenues as a result of LTE".

Another pothole on the road to LTE is handset availability. Problems yet to be fixed are battery life, aerial integration and size, none of which bring an LTE handset into the handy form factor to which we have become accustomed.

Despite that, we will, said Walker, see data-only LTE-compatible handsets arriving late in 2011, with both voice and data devices arriving in 2012 -- but they're likely to be chunky.

Despite the problems, Walker said that in the real world, some contracts already gone live.

Although so unenthusiastic an assessment of LTE is rare, the picture painted by Walker was entirely believable.

As Mehmet Balos, marketing manager for telco network equipment vendor Genband, said in a panel discussion after Walker's presentation, while standards body GSMA has launched specifications for voice over LTE, "no-one's tearing down revenue-earning networks today". In the meantime, noted Balos, "revenues from voice and SMS are paying the bills for the data explosion."

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