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LTE market to hit $100bn by 2014

LTE, the next generation mobile technology, will earn mobile network operators $100bn a year by 2014, despite a lack of clarity over usage prices, according to a major study of the market released today.

Sales will be driven by trade-ups to smartphones and laptops. This suggests the early stage of the market will be driven by business usage rather than consumer demand, said Howard Wilcox, author of the Juniper Research study.

However, consumer demand - especially for streamed video and for online games - will overtake business use by 2015, he said.

Wilcox said 90% of telecoms professionals surveyed by Juniper believed network operators' price plans were likely to change as a result of the introduction of LTE. After evaluating three scenarios, Wilcox said, "the most optimistic view revealed scope for higher revenues and ARPU [average revenue per user] if network operators adopt premium pricing strategies for enterprise users."


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Wilcox said LTE would be priced as a premium service because of higher data rates and lower latency. This would push it towards business usage, as businesses could pass on the higher costs.

He noted that network operators were already shifting away from "all you can eat for a fixed price" contracts. This was to help manage congestion in their present networks, but also to prepare the market for new revenue models.

Wilcox said LTE would relieve some present congestion, but pointed to Germany, where LTE is being used to provide broadband to unserved areas in the former East Germany.

He said it was too early to describe the precise relationship between broadband and mobility in the UK, as it implements a 2Mbps universal broadband service, but they were two things that appealed to business users.

Wilcox said network operators had already announced at least 113 LTE projects, but half had not published their plans for commercial launches.


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This was partly because the necessary radio spectrum was not always available, and partly because there were relatively few access devices for consumers to buy.

The UK plans to launch an auction for the required radio frequencies in late 2012, by when at least 55 commercial LTE networks should be running elsewhere. Communications regulator Ofcom has still to provide details of the auction.

The UK's biggest mobile network operator, Everything Everywhere (E2), the merged Orange/T-Mobile network operator which has 27.9 million customers, recently dropped its legal objection to the proposed auction.

E2 was worried that rivals O2 and Vodafone would be able to monopolise the sub-1GHz frequencies. This would have effectively restricted E2 to urban areas by making it very expensive for E2 to provide access outside its present coverage areas.

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