LTE: it's what you make of it

12 Nov 2008

As you might have gathered, LTE is shaping up to be the big story in 2009. We won't see commercial rollouts as such, but we'll see some of the groundwork being laid - standards, hardware, spectrum allocations, etc - and we'll be hearing an awful lot of hype. We're getting a taste of that now, with vendors promoting peak rates exceeding the 3GPP's base requirements, even though everyone knows that the real-world speeds per user will be considerably lower.

But still, the question surrounding LTE was never the technology, but the business model. Any given presentation on LTE has a slide showing that traffic growth will not equal revenue growth, and while the theoretical solution to this is advertising, it's still uncertain just how big a pie that will be, and how big everyone's slice will be. Complicating things further is the likelihood that whatever business model cellcos dream up for 4G may be horribly outdated by the time it's deployed on a mass scale.

For evidence, look at 3G. When the GSM and CDMA camps began working with the ITU to hammer out 3G standards and specs in the late 1990s, everyone clearly had handsets in mind. Outside of thought exercises, no one in the cellular business was talking seriously about dongles and laptops. And why would they‾ They were in the mobile handset business, not the PC business.

But then Wi-Fi happened, followed closely by Web 2.0, and suddenly the concept of mobile data changed. While cellcos defined 'mobile Internet' as closed portals and metered data pricing models, the users defined it as 'exactly what I get at home, only outside, and for a flat fee'.

They expected and demanded the same user experience, and handsets couldn't deliver - laptops could. That's one reason why 3.5G services launched with dongles instead of handsets. It's also why we're seeing the rise of MIDs and the subsequent mad scramble by both the GSM Association and the Wimax Forum to embed their technology in them.

Never mind the iPhones

Ironically, of course, the device credited with giving the 'real' mobile Internet a boost is a handset: the iPhone, which is driving up data traffic wherever it goes (and just seven whole years after the first 3G handsets hit the streets). On the other hand, the iPhone was conceived and designed by an industry outsider, so maybe it shouldn't count.

Either way, it would be a mistake to peg the iPhone as the future of mobile for the same reason it was a mistake to assume that 2G business models could be adapted for 3G mobile data. Luckily, some in the cellular business have realized this. Philippe Poggianti, Asia Pacific VP of LTE at Alcatel-Lucent, said at a recent LTE/HSPA conference in Hong Kong that there's no sense in building an LTE business case on the iPhone or Web 2.0, because by the time LTE sees commercial rollouts, the users will have moved on and taken the goalposts with them.

The good news, he added, is that with LTE, you don't have to know the future. 4G by any name is at heart an ultra-efficient wireless network with a flat IP architecture that can serve as a flexible platform for whatever services cellcos, Google and even end-users can conceivably throw at it.

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