Posts tagged ‘traffic’

LTE, today, tomorrow: when should operators commit?

This is the first in a series of guest blogs from significant voices in the industry with something to say about LTE. Let us know your thoughts in the comments below.

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Lyn Cantor is president of Tektronix Communications, a provider of service assurance solutions to global operators.

There’s no doubt that demand for data is driving the network carrier market, but while LTE networks will become more pervasive over the next decade they will not all launch at once.  However, while individual carriers have entirely different market environments to cope with the shift in the market has already begun.

In fact, this year promises to be a watershed for LTE. A recent forecast from Juniper Research estimates that the number of LTE subscribers will reach 428 million by 2016; with a surge in growth taking place in 2012.Many wireless operators are taking stock of the economic and competitive environment in their respective markets and considering their LTE roll-out options. It may no longer be a case of ‘if’ an operator will launch an LTE network, but ‘when’.

The development of LTE in global markets will vary according to specific local market factors in addition to an operator’s ability to deliver data efficiently. Operators will make their move when there is a firm business case to do so, prompted by one of at least three possible scenarios.

The first is that an operator’s growth potential is crippled by the existing networks’ ability to cope with traffic demands. The second is that a rival launches LTE early to create the perception that it is leading the market. Third, there is the scenario where an incumbent operator, or new player, decides to adopt an entirely new ‘data driven’ business model.

Looking at LTE regionally, you can see that the U.S. market has taken the lead. The U.S. has enjoyed a head start with LTE because the operators have had to meet the demand for wireless data access, driven by the proliferation of new smart devices, and the need to reduce the cost of mobile broadband delivery. By way of contrast, in Europe, the operators have made a significant investment in 3G. These networks are at an advanced stage and the lack of major LTE deployments has resulted in less pressure to commit extensively to LTE. These factors, combined with spectrum allocation, will lead to a different rate of LTE expansion in Europe.

Operators now recognise the economic realities of LTE. As a result their mind-sets are switching from being a traditional voice and messaging provider to that of a mobile broadband supplier, providing, voice, messaging and data. They now appreciate the challenge they face in monitoring the volume of traffic flowing across their networks – and the ability to monetise that data as bandwidth increases. This will allow operators to cut their cloth accordingly; distinguishing between heavy users and more mainstream traffic, to expand their businesses to meet and sustain market demand going forward.

The opportunities, and potential barriers, which determine the switch to LTE are diverse and vary from region to region. However, one thing is certain. All operators will need to make the jump to LTE to deliver voice, messaging and data to a new breed of consumer.

For more debate on LTE, be sure to attend the LTE World Summit, taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your interest.

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