LTE in Asia: Dollars and sense

Melissa Chua
Despite the much-hyped higher surfing speeds that LTE looks set to bring, the clear case for the technology from an operators’ point of view lies in the potential opportunity to reduce the cost per bit.
The LTE wave in the Asia Pacific is being led by Japan, Hong Kong, South Korea and Australia, which will each see at least one commercial LTE rollout by year-end.
However, the technology’s progress in the rest of the region could be hampered by simple economics, says Foong King Yew, a principal analyst at Gartner.
“The pace of change is very rapid, with carriers expected to deploy new technologies within a shorter span of time. Think the early transitions from WAP to GRPS to EDGE to 3G and now, LTE,” says Foong. “Each change involves investment. How can they ensure they get reasonable returns?”
Carriers’ potential LTE woes could also stem from the ‘uncertainty of the charging mechanism’, says Foong. “With many carriers now expected to give away more for less due to competition, many may have to take another look at flat rate data plans for mobile broadband, as this will have a direct impact on the decision to invest in LTE.”
While much of an operator’s existing infrastructure can be reused in the move to LTE, technical challenges exist for 2G/2.5G/3G providers to maintain the quality of service on their networks while the LTE upgrade goes on.
“Carriers need to put in place the necessary bandwidth in the backhaul, with the high data usage expected from LTE networks,” says IDC’s senior research manager Alex Chau.