HSPA+ makes better ROI sense: Aircom

Nicole McCormick
27 May 2010

Mobile operators can cut capex by two-thirds if they upgrade to HSPA+ rather than deploy LTE, said telecoms consultancy Aircom.

Aircom says a tier one mobile operator in Asia Pacific would need to invest $232 million in the first year to deploy a LTE network. In contrast, a software upgrade to HSPA+ could cost just $77 million.

The most important factor in deciding a future network technology is return on investment (ROI), said Aircom’s Fabricio Martinez.

“Due to the low capex investment and new revenue opportunities, deployment of HSPA+ will allow operators to see ROI in three years,” Martinez said.

“[And that’s a…] perfect timing to upgrade to LTE, when that technology’s ecosystem has matured, devices have come to market, and equipment prices have reduced.”

First year LTE capex estimates were the lowest in Asia Pacific, and highest in the US.

Aircom pegs a tier one US carrier’s first year LTE capex at $1.8 billion, due in part to operators’ high 700MHz auction licensing costs, compared with $750 million for the UK.

Capex reduction for a US operator upgrading to HSPA+ could be as much as $1.19 billion in 12 months and up to $500 million for a UK operator.

In recent times, a number of operators initially supporting LTE have since announced HSPA+ strategies as an interim measure, according to Martinez.

"We are seeing operators delay their LTE plans now, and we expect this trend to continue," Martinez toldReuters.

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