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Summary:

Long Term Evolution (LTE), the next-generation wireless network chosen by 80 percent of the world’s carriers, isn’t turning out to be the star of this year’s Mobile World Congress trade show in Barcelona. Instead of announcing LTE rollouts, carriers are talking up their upgrades to HSPA+, […]

Long Term Evolution (LTE), the next-generation wireless network chosen by 80 percent of the world’s carriers, isn’t turning out to be the star of this year’s Mobile World Congress trade show in Barcelona. Instead of announcing LTE rollouts, carriers are talking up their upgrades to HSPA+, a small, software-based step up from existing GSM-based 3G networks. It’s like a Ferrari getting upstaged by an Acura. Acuras are cool, but underneath they’re still Hondas.

The Financial Times blames the LTE delays on the economic downturn, but Vodafone, France Telecom and Deutsche Telekom are putting off their Ferrari purchases because it makes sense from a technology and business perspective. Former Vodafone CEO Arun Sarin said at last year’s Mobile World Congress, and a few weeks later at CTIA, that Vodafone wouldn’t move to LTE until its current 3G network was full. Instead, the carrier planned to upgrade its HSPA network, which could be done with software rather than through building out a new physical infrastructure.

The Financial Times is wringing its hands over the fate of the telecom gear makers who were counting on upgrades to LTE, but I doubt that few of them have been caught off guard. The CEO of Ericsson, one of the biggest promoters of LTE, yesterday predicted five more years of HSPA dominance. So, even as equipment vendors tout their LTE milestones (such as Motorola showing off its ability to transfer calls on an LTE network), they know that most carriers with GSM networks, like AT&T, won’t be moving to LTE until they have to.

  1. HSPA+ is merely a small software upgrade from current HSPA networks.

    It requires a “flatter” core and MIMO, both of which are hardware upgrades and require significant CAPEX.
    Also, there are few HSPA+ devices announced and none in the market yet.

    However, operators are interested in HSPA+ for CPC and 64QAM but are very sensitive in the CAPEX issue. The ones I have spoken to say that will only deploy HSPA+ if it doesn’t require hardware upgrades.

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  2. This is exactly what happened with EDGE and UMTS. In late 2001 early 2002 every one was excited because UMTS (real 3G) equipment was finally becoming available. However, in all that excitement people forgot that most GSM carriers still only had the very slow GPRS as their data offering. There was lots of talk about skipping EDGE (which had been available for a year already without much uptake) since while it was a less expensive upgrade than UMTS it was also far less potent. So what happened? Despite all the prognostication, everyone did deploy EDGE and real 3G had to wait another 3 years (with the US GSM carriers continuing to lag Europe despite all the claims that they would catch up).

    There was no way we were ever going to see any significant LTE deployment before 2010, even without the Global Economic Meltdown. Now, I’d be surprised if the technology is commonplace before 2012 (especially in the US). Of course, South Korea will have widescale deployment by the end of this year ;^)

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  3. jesse, while i agree with your analysis on the edge vs. 3g (w-cdma) situation, i believe we will see some lte deployment sooner rather than later. the reason is that 3gpp2 roadmap is a deadend. back then people were deploying 1xrtt and calling it 3g. the 3gpp2 operators have no path to go but lte.

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  4. The main purpose of the LTE hoopla last year was to put the brakes on the momentum behind WiMAX. In this, they succeeded very well: In the last year and a half, not a single large WiMAX deployment has been announced.

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  5. subir

    this is anon. agree with you, this has scared people off wimax. no one wants a network where devices are not available or expensive (3pp2 and reliance for example)…the claim is that the cost curves of a system where more than a billion devices are produced are pretty hard to beat….reality is that those are mostly 2G devices…

    btw this is a tried and trusted strategy for the 3GPP proponents and cell carriers. few years back they were discrediting wifi. while this did not stop the adoption of wifi in general (thanks to consumers for that) the operators have not embraced wifi. the kept believing 3G would solve their problems. look at statements from at&t ceo before the 3G-iphone launch. match it with real world 3g network experience…

    the strategy for wimax has to be go dsl replacement type apps…

    anon…

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  6. [...] 2. HSPA is stealing LTE’s thunder. [...]

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