If you are starting to tire from all the LTE hype going around and daily news of another LTE network activation then maybe it’s time for a reality check. I have always embraced new technology with glee but I am starting to have reservations about LTE and its real purpose.
Now, I know that network equipment providers need to constantly innovate to keep selling products and I realize that our networks are being bombarded by data traffic, so those should provide good enough reason to roll out LTE. However, as I consumer, do I really want it?
Sure LTE will provide me with breakneck mobile data speeds but so does wi-fi and wi-max, where available. Like many others, I only ever use my CSP’s mobile data network when I am in-country and outside my home. I would never dare switch it on when roaming after reporting all those cases of bill shock. Sadly, when I am roaming is the time I most need data access!
What’s wrong with 3G anyway? I waited years for it to reach HSPA+ standards achieving speeds of 7, 21 and even 42Mbps, what more do I want? My 3G handset is even backward compatible so if I am in an area or country that doesn’t support 3G it happily works on 2.5G and even 2G networks, faultlessly. This won’t be the case with LTE handsets which will NOT be backward compatible. Not only are LTE handsets a rarity today, it may be a while before they even have voice capability. Yes, you heard right, LTE is all IP and all data for now. According to Ovum’s consulting director for Asia Pacific, C W Cheung, voice-centric LTE handsets are still two years away! Also, the price points for LTE chip sets currently around $50 considered by handset makers as restrictive but prices will drop with volumes, presuming volumes are achieved.
3G handsets are just now surpassing sales of 2G handsets so why the mad rush to roll out LTE where almost no handsets exist. Wanting to be first in the market with LTE makes very little business sense, but that’s not stopping anybody. To date, four commercial LTE networks are up and running with 22 others due to launch by the end of this year. It looks like a severe case of ‘build it and they will come’ syndrome.
As Joseph Waring, group editor at Telecom Asia points out, “The lessons from the first LTE commercial rollouts should perhaps be focused not just on consumer satisfaction – what’s there not to like about 40-50 Mbps access via a dongle – but on successes in monetizing the network investment.” When considering that dongle-bearing data munchers will be the bulk of LTE users it makes even less economic sense. StarHub in Singapore, for example, reported a 100% increase in data traffic accompanied by only 30% increase in revenue. The corresponding drop in voice traffic as people continue to swing over to VOIP applications provided by the likes of Skype and Google will surely be difficult to make up from data traffic alone.
There is no doubt that LTE delivers a bigger ‘bang for the buck’ in terms of data throughput, but will that translate into a corresponding revenue ‘bang’? I’m not so sure.