Fourth generation wireless networks will be one of the biggest tech building booms of the decade. But don’t start picking your winners yet, says The Street. Ericsson CFO Jan Frykhammar doesn’t expect to see significant revenue from 4G “until 2012.”
Verizon has vowed to have LTE available in more than 25 cities this year. But, according to The Street, high-priced chips and a lack of LTE gadgets all but guarantees that the true 4G action won’t arrive for a few more years.
AT&T announced its own LTE plans, but AT&T has less 700 MHz spectrum, and won’t begin commercial deployment of LTE until 2011. It will first built out its 3G HSPA network. AT&T’s Hank Kafka, VP of Architecture, says AT&T “has a lot of runway left with HSPA and HSPA-plus.” Meanwhile, T-Mobile USA will introduce HSPA+ service at 21Mbps in 2010. Sprint is going with WiMAX to boost speed.
AT&T will upgrade with HSPA 7.2 technology and add about 2,100 new cell sites. But AT&T’s backhaul network is not ready. Only the six U.S. cities announced in 2009 as initial HSPA 7.2 markets – Charlotte, Chicago, Dallas, Houston, Los Angeles, and Miami – have been upgraded with higher capacity backhaul. Most of AT&T’s cell sites currently use 4-6, T-1 lines (at 1.5 Mbps each) – that’s 6-8 Mbps total per cell site. A single 7.2 Mbps user could theoretically max out the system.
Backhaul capacity is the true bottleneck, not the last mile.
In a recent report from Morgan Stanley, analysts estimate there were about 500 million 3G users worldwide by the middle of last year. That represents a penetration rate of 11% of the total market. Looking ahead to 2013, 3G penetration will hit close to 44%, according to Morgan Stanley.
In a newly released report by Dell’Oro Group, the mobile infrastructure market revenues are forecast to reach $42 billion in 2014, but will still be shy of the record revenues of over $43 billion reached in 2008.
Cisco has predicted that by 2014, the average mobile broadband connection will generate 7 GB of traffic per month. Their projections (pdf) of a Mobilpocalypse have received a lot of uncritical acceptance.