An optimistic new study released this week by Coda Research paints a rosy picture for LTE growth worldwide. The broad strokes are interesting reading: Europe will be first out of the gate, and will remain a leader in deploying and monetizing LTE wireless broadband until Asian subscribers gain critical mass in 2016. North America bodes well too, with seven million LTE users by 2013, amounting to over 70% of mobile broadband revenue state-side.
Since 2013 is far away, especially while waiting for the global economy to recover, it’s hard to imagine analysts taking a stab at concrete numbers for a technology that has yet to be deployed beyond a few demo sites. However, Coda claims to have a unique research method where, “Following rigorous in-depth research and as much thinking as necessary, we provide thorough accounts that contain in-depth and detailed implications.”
It may be hard to quantify what “as much thinking as necessary”, means, but aside from results that would make any equipment maker proud, I see some points that might need a bit more polishing. One is the recent statement by Vodaphone’s R&D Director, Michal Walker, that “no European LTE networks will be up and running… before 2012.” Working for the largest provider planning LTE in Europe he must be well informed, but Coda estimates revenue growth of 47% CAGR through 2012 (47% of 0?), and 10 million users happily high-speed surfing the same year.
So how did these numbers get built up? The underlying assumption (“of particular note”) is that user behavior, accessing media-rich data will drive the need for LTE from 2012 to 2017 (imagine, forecasting 8 years out!): video will see a CAGR of 93%, audio 79%, internet 78%, and P2P 77%. So it seems that the way we use our mobile devices is going to create a massive demand for bandwidth. We’ll be pulling the providers by their ears to get LTE in our backyard. But is that really the history of mobile? Was 3G demanded by consumers or dropped on them by providers looking for new revenue streams as voice rates plummeted?
Personally, I think the providers will roll out LTE when they’re good and ready: once they’ve recovered enough revenue from their 3G deployments, once the economy is in full swing, and once something more disruptive than watching YouTube on the bus (for 150$/month, according to Coda’s ARPU estimates) comes along. Oh, and once they figure out how to deploy it (see the 3D, 4G Mesh, and LTE Backhaul, Think Twice)
Until then, let’s enjoy the fantastic growth of 3G, and all the innovation and network transformation that this here-and-now technology is carrying with it: ubiquitous Ethernet backhaul and wholesale, an economy of scale for packet-based, carrier-grade networking gear that will fuel development of the networks to come. (see 3G: Ethernet’s Big Break).
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