Recession dividing LTE and WiMax

Global downturn may widen adoption gap between long term evolution and mobile WiMax in mature and emerging markets, says Ovum report.

The global economic situation may widen the rift between LTE (long term evolution) and mobile WiMax adoption between mature and emerging markets, according to Ovum.

The analyst firm said in its latest report, the recession is expected to slow revenue growth for operators in the short term, although the volume of connections will keep rising. This will lead to lower ARPU (average revenue per user), in turn driving the uptake of LTE in mature markets, as telcos look to upgrade to next-generation networks to capture data revenues, said Ovum.

The number of connections are expected to grow 59 percent from 2008 to 2014, while revenues grow by 33 percent, according to the report.

Ovum adds that the mobile WiMax industry would get increasingly marginalized by 2014 as a result of LTE's growth--mobile WiMax is expected to hit 55 million connections while LTE will grow to nearly twice that at 109 million worldwide, by then. Growing operator and ecosystem support for LTE would continue to edge out mobile WiMax, it added.

LTE and WiMax are seen by some as competing technologies--LTE is an upgrade of existing 3G cellular-based broadband, and WiMax a wireless broadband standard meant to extend connectivity to regions without sufficient cable infrastructure.

As a result, WiMax has been said to be more appropriate to provide last-mile access for emerging markets, and LTE for mature markets with an existing cellular base.

Some have also said WiMax may be the broadband technology of choice for emerging regions because it is ready for deployment to satisfy their latent hunger for connectivity, while LTE has yet to be finalized.

Amid the growth of data revenues, however, voice will still be mobile's "killer app", noted Ovum. With operator service venues expected to hit US$1.1 billion in 2014, voice will account for 69 percent of revenues globally, and no less than 60 percent in any region.

"Operators must not ignore this fact in the race for data revenues," it said.

Due to the recession, Ovum has also revised its previous estimates on operator service revenues. It had earlier predicted global mobile services revenues would break the US$1 trillion mark in 2010, but moved this target a year to 2011, due to the current economic situation.

"The greatest impact of recessionary forces is seen in the short term," said the report.


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