UK LTE 'not justifiable' before 2015, say analysts
It will not be economically viable to upgrade the UK's mobile broadband networks to LTE before 2015, according to analysts.
Informa Telecoms and Media said on Tuesday that the high-speed packet access (HSPA) networks currently in place will suffice in the medium term, with traffic congestion only likely to appear in 2013 some localised areas. However, this prediction might change if user behaviour changes significantly, putting extra strain on networks, said the analyst house.
"UK mobile broadband operators are faced with fierce competition while margins from voice are shrinking," senior analyst Dimitris Mavrakis said in a statement. "Even though there is growing demand for mobile data by smartphones and USB modems, current UK mobile network deployments are so dense that it would make the introduction of LTE both an investment-heavy and somewhat unjustifiable decision."
The long-term evolution (LTE) of 3G technology is likely to be marketed in the UK as '4G', although its first iteration technically falls short as it does not achieve maximum downlink speeds of 100Mbps while the user is in motion. Instead, it hits maximum speeds of around 50Mbps, which are already much more than the 14Mbps theoretical maximum of HSPA. A future version of LTE called LTE-Advanced will qualify as '4G'.
According to Mavrakis, UK mobile operators will be able to use HSPA to "meet traffic demands and alleviate capacity constraints until 2015, after which the upgrade to LTE may be justifiable since economies of scale for hardware will have reduced infrastructure costs".
"Plus, a complete LTE ecosystem will be established, including handsets and portable devices," Mavrakis added. The only LTE client devices currently in the early stages of deployment are mobile broadband dongles.
Although mobile operators have been complaining for the last year that soaring data usage is hurting their networks — a stance that several operators use to justify their stances against net neutrality — Informa is the second major analyst house this month to say that today's networks will remain sufficient for the time being. On 8 November, Analysys Mason said mobile data growth was "over-hyped" and suggested that "mobile network operators can easily meet the demands on their networks at the current growth rates without huge investment in LTE".
The first LTE deployments have already gone live in the Nordic countries. As early as last December, TeliaSonera launched a service in Oslo and Stockholm, and this week Tele2 and Telenor set their LTE services live in the Swedish cities of Stockholm, Gothenburg, Malmö and Karlskrona.
In the UK, no LTE deployment would in any case be possible until the relevant spectrum — at 800MHz and 2.6GHz — is made available at auction. In July, the government set out plans for this auction to take place at the end of 2011. This will be about three years later than was originally planned, due to threatened legal action from operators who want to see how much use they can get out of their existing resources before deciding on how much to bid for new spectrum.