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January 31, 2012

4G LTE Spending to Top $36 Billion in 2015: Report

Global spending on 4G LTE technology is expected to more than quadruple in the next four years as carriers reallocate funds from 3G wireless infrastructures to the next-generation standard.

Carriers are projected to increase their capital spending on LTE infrastructure gear to $8.7 billion in 2012, and $20.3 billion the year after, according to a new study from IHS iSuppli. By 2015, LTE infrastructure spending will top $36 billion.

The anticipated spending increase will coincide with a sharp drop-off in 3.5G infrastructure technology revenue, which should fall from $19.8 billion in 2013 to $9 billion in 2015. At the current pace, LTE infrastructure spending will overtake 3.5G spending early in 2013.

 "This trend started in the second half of 2009 when some wireless operators in Europe, North America, Japan and South Korea started to deploy LTE technology," Jagdish Rebello, director and principal analyst for communications and consumer electronics research at HIS, noted in a statement. "While 3.5G remains the dominant air interface technology in the mobile infrastructure market, the 4G LTE space has been gaining momentum."

Rebello says that around 200 mobile network operators are currently trialing, deploying or commercially operating 4G LTE infrastructures, up 20 percent from 2010.

Telecom equipment manufacturers best positioned to take advantage of the thriving 4G LTE market will be those that can support upgrades to 4G while still maintaining backward compatibility with legacy wireless infrastructures, says Rebello.

"The vendors that will win in the transition to 4G will be those that can demonstrate cost-effective, upgradable solutions capable of delivering performance as defined by the LTE specifications," he adds.

The overall wireless infrastructure market had a strong 2011, erasing the memory of two preceding years where growth was relatively stagnant. The market grew to an estimated $42.5 billion in 2011, up more than nine percent over 2010 when spending was essentially flat.

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Beecher Tuttle is a MobilityTechzone contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves



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