Optimizing the 4G Technology CycleOptimizing the 4G Technology Cycle

For anyone interested in the service provider networking business these three statistics on worldwide 4G LTE deployment should be utterly compelling:

There's no question LTE is an incredibly successful technology -- most of us depend on it in our daily lives -- but what these data points also show is that LTE is now entering the most commercially productive phase of its lifecycle. This is the period in the approximately 20-year mobile technology cycle where operators that have invested in network deployment can generate sustainable, long-term returns. With the network now mostly built and paid for, and with ongoing customer demand, LTE should deliver a generous surplus to operators. This is the essence of mobile network economics.

To optimize returns from 4G LTE, however, operators cannot relax: they must continue to invest in coverage and in new capabilities. The good news is, there are a lot of good options. On coverage, high-volume equipment pricing, typical at this stage of the cycle, and spectrum re-farming, enables operators to extend their network coverage at relatively low cost. And advances in the underlying LTE technology mean operators can simultaneously introduce new revenue-generating capabilities on deployed networks.

LTE-Advanced Pro (a.k.a. 3GPP Release 13, a.k.a. 4.5G) is the critical mid-cycle upgrade release that will drive 4G commercially and technically over the next five years. It introduces a raft of new capabilities that will drive investment in network upgrades to help sustain ARPU in the consumer and enterprise smartphone markets and can open up a raft of new opportunities in industry verticals that will radically expand the addressable market for LTE into sectors such as public safety, connected vehicles, factory automation, smart cities, media, healthcare and so on.

Some of the major features of LTE-Advanced Pro include:

It is critical, in my view, that operators deploy these capabilities and develop these business opportunities in 4G ahead of 5G deployment in the 2020s. As such, we can think of LTE-A Pro as not only valuable on its own terms, but also as part of a network strategy that will accelerate the commercial success of 5G.

This blog is sponsored by Huawei

— Gabriel Brown, Principal Analyst, Heavy Reading