Testing equipment vendors are plenty busy with attempting to keep up with the demands of network equipment manufacturers and service providers that are looking to Long Term Evolution (LTE) as the next link in the evolution of 4G buildout.

After all, LTE promises a great deal, including the ability to incrementally increase speed and capacity, while harvesting investments in existing technologies, including wireless and wireline. Despite the fact that most early estimates put LTE rollouts in early 2010 – a date that is still largely considered to be realistic – Verizon Wireless announced acceleration of its LTE deployment timetable to December 2009. It is also believed that NTT DoCoMo Inc. (NYSE: DCM) will deploy LTE in Japan in 2009.

In fact, some estimates put the forecast for LTE base-station infrastructure alone at more than $8.6 billion by 2013. This means that operators with investments in other technologies will be making a major capex shift over the next five years, and LTE testing vendors have an important job in making sure that the technology fits the bill.

These are just some of the findings in this month's Unstrung Insider, "LTE Tests for the Future." Companies analyzed in this report include: Aeroflex Inc. (Nasdaq: ARXX), Agilent Technologies Inc. (NYSE: A), Anritsu Corp. , Azimuth Systems Inc. , Catapult Communications Corp. (Nasdaq: CATT), NetHawk Oyj , and Rohde & Schwarz GmbH & Co. KG .

According to Lynne Patterson, business development manager of the American Sales Region with Anritsu, it is important for LTE test vendors to work closely closely with customers to understand their needs with respect to specification changes and to provide a flexible test solution to accommodate the lack of a finalized specification.

"For example, before the reference signal in LTE was clearly defined, we provided several reference signal options, including giving the customer the flexibility to load a user-defined reference signal," she says. "Testing could proceed despite the lack of a clearly defined reference signal. As soon as the reference signal definition was available, we incorporated the standards-based reference signal into all LTE products, while leaving the user-defined choice. If testing was underway using a user-defined reference signal, the developer could upgrade his test equipment to reap all the benefits of new software, without having to change his ongoing tests."

Such distinctions are important as the economy continues to dictate the development of LTE, and as the technology itself continues to mature. Furthermore, application development will drive investment, as operators attempt to determine which services to deploy.

R&D professionals are more cautious in each purchase of test equipment, because they are looking for flexibility of the solutions and how much can be tested with each piece of hardware, according to Jan Whitacre, LTE market program lead with Agilent. "Customers want equipment that will minimize upgrade or maintenance costs, because budget dollars also are very limited. Companies that are going after this technology see the opportunity to bring in orders by coming out with devices that will deliver more to customers. Operators can bring in more revenue, and manufacturers can sell new designs."

— Denise Culver, Research Analyst, Unstrung Insider

The report, LTE Tests for the Future, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.