The first two letters of LTE may stand for “long-term,” but there’s not much long-term about the status of the mobile network technology today. Operators have built more than 60 LTE networks worldwide. The networks are in place, but according to Ericsson CEO Hans Vestberg, operators are now wrestling with new questions: how and what do they charge for these fancy new 4G services?
In an interview with GigaOM, Vestberg said that 4G business models, not infrastructure or devices, was the far bigger theme at Mobile World Congress this year – it’s what he’s spending time talking about in Barcelona this week with Ericsson’s hundreds of carrier customers
“We’re at this inflection point where we’ve built the networks, but we still haven’t worked out the business models,” Vestberg said. “Some of our customers are taking very different directions.”
European operators are testing the potential of 4G being a premium-priced data service, charging more for a megabyte of LTE than a megabyte of HSPA. In the U.S., AT&T and Verizon are barreling ahead with shared data plans. Vestberg says he’s witnessing many more business models emerging as operators start experimenting with enterprise and machine-to-machine data plans as well as continuing to tinker with their consumer data pricing.
Carriers are still debating whether they should be big pipes selling mobile broadband by the gigabyte, or applications and data services providers that inject something tangible into that bitstream, Vestberg said.
Many operators have begun to think beyond smartphones and focus on the internet of things, Vestberg said, connecting everything from tablets to cars to home appliances. At Mobile World Congress, for example, AT&T and General Motors announced plans to embed LTE into millions of future cars as an upgrade to GM’s OnStar service. Several other carriers were demonstrating connected home and connected city applications at MWC, sticking LTE radios in smart utility meters, public transit and healthcare devices.
“What devices can we connect that will create a more efficient life for people?” Vestberg said. “[Carriers have] already identified a lot of those devices. It’s more a question of who and how and when they’ll monetize them.”