Wireless Carriers Slowing Mobile Network Upgrade Deployments?
While wireless carriers have talked at length about moving to 4G, the next generation in wireless technology that promises data rate speeds comparable to a cable modem, they are actually delaying the rollout of their 4G deployments until 2011-2012 and instead are focusing on upgrading existing 3G networks in the near-term.
iSuppli found that the wireless carriers, a little skittish from the economic slowdown, have pulled back slightly on their 4G rollout plans. The company predicts total capital spending on wireless communications this year will be $120.6 billion, down 1.8 percent from $122.8 billion in 2009, and 2009 was down 8.6 percent from $134.3 billion in 2008.
There are a number of reasons for the slow-down in 4G deployment. The 4G equipment is not compatible with 3G and in order for phones to support both 3G and 4G would, at least initially, they require two separate chips, meaning a greater power drain on the mobile device.
On top of that all, the 4G protocol, dubbed "Long-Term Evolution," or LTE, is still not finished and "is still evolving, so it's probably good to wait," said Jagdish Rebello, senior director and principal analyst for wireless research at iSuppli.
"They've invested billions of dollars on their 3G networks," Rebello told InternetNews.com. As it rolls out, 4G will be a costly upgrade and will only be deployed in high-traffic areas. "When you look at the costs and the upgrades available for 3G, there's a strong incentive for vendors to deploy every upgrade available," he said.
One such example is T-Mobile, the U.S. carrier owned by Deutsche Telekom of Germany. The firm announced on Tuesday it plans to upgrade its national high-speed 3G service to HSPA+, which provides HSPA technologies like T-Mobile's network with data rates of up to 56 megabits per second for downloads and 22 Mbits/sec for uploads, using MIMO (define) technologies.
T-Mobile expects to have HSPA+ deployed across the breadth of its 3G footprint by the end of this year, covering more than 100 metropolitan areas and 185 million people. Globally, there are a number of HSPA+ deployments taking place.
Another incentive for wireless providers to take it easy is their revenues are slowing. "All of the carriers are saying the total revenue per user is starting to decline. The growth in the rate of data revenue is not enough to offset the decline in voice revenue. In an environment where the consumer is being cautious, carriers have to be cautious and project spending in line with revenue growth," said Rebello.
Verizon, Sprint Moving Ahead with 4G Mobile Networks
Already, carriers are touting their plans for 4G-compatible phones. Sprint this week unveiled the HTC Evo 4G, an Android-based, dual-mode 3G/4G phone slated to come out in summer.
The nation's No. 3 carrier Sprint is offering the "Sprint 4G Network" in some cities, if users have a "dual-mode 3G/4G device, or single-mode 3G/4G device," along with a mobile broadband connection plan.
Despite the Evo's announcement, Rebello said he expects the first 4G products will chiefly be data cards for PCs, with more phones to follow later. And as with the Evo, he expects first generation 4G phones to be dual mode, just like today's 3G phones support both 3G and 2.5G. The question is whether the majority will be 3G/4G or 2G/4G, and whether they will have one chip or two, he added.
The other exception is Verizon Wireless, the nation's largest carrier. It is charging ahead with 4G this year. Rebello said that's because Verizon uses CDMA technology and there are fewer upgrade options for the company. CDMA is only used in the U.S. and Korea. Most of the world is on GSM and have more hardware upgrade options. So it's in Verizon's best interests to simply get away from CDMA as quickly as possible and on to 4G.
TAGS:wireless, Verizon, T-Mobile, 4g, mobile network