The impact of Long Term Evolution of corporate network and business strategy

Long Term Evolution (LTE) will be a widely adopted next-generation cellular technology and we predict that it will reach 50% of subscribers in the US and...

Long Term Evolution (LTE) will be a widely adopted next-generation cellular technology and we predict that it will reach 50% of subscribers in the US and Western Europe by 2015.

LTE is a natural technology evolution for most global system for mobile (GSM) operators. It is a step from third-generation (3G) to eventual fourth-generation (4G) wireless technology. It will be a key technology for wireless broadband, initially more appropriate for employee applications than for consumer applications, due to slow consumer adoption.

100Mbps downline, 50Mbps uplink

From a corporate perspective, LTE promises much and has several key characteristics. It has very high theoretical data rates (100Mbps downlink and 50Mbps uplink), if spectrum is available. This makes it a viable alternative to large campus Wi-Fi deployments.

It also boasts high capacity and aims to support a minimum of 200 users in a cell. It has very low latency (5msec for small packets) and will be an all-internet protocol (IP) network for voice and data.

The all-IP nature of LTE, combined with low latency, may make LTE particularly suitable for applications that involve multiple types of media streams or multimodal interactions, such as communication-enabled business processes.

New corporate applications

Organisations could consider LTE for new corporate applications, such as video streaming, geographic information systems (GIS) and mapping, information backup, and streaming sensor data.

LTE could also enable entirely new wireless devices and business models, such as the on-demand manufacturing of CDs, DVDs or 3-D objects creation using emerging 3-D printer technology.

However, despite the promises, in most countries, LTE coverage will be incomplete until 2020, and actual bandwidth will likely be around just 10-20% of the theoretical peak.

Many operators believe that LTE is essential for them to be commercially competitive, but they are struggling to find a business model beyond selling data capacity.

Combined with likely reductions in capital expenditure during the recession, this may make some reluctant to invest to achieve the best performance levels.

Three step strategy

User organisations need to adopt a three-phase LTE strategy.

1. Initially, organisations need to consider LTE for employee applications. From 2012 to 2015 corporate users can safely adopt LTE for business-to-employee (B2E) applications, such as laptop data connections, as soon as it becomes available. Because LTE is a standard, there is little strategic risk, and laptop adapters, such as dongles, should be available at launch.

2. Mass-market, consumer-facing applications that exploit LTE performance may not be viable before 2015 in most mature markets. It is likely to take LTE four to five years to reach 50% of subscribers, which will likely happen by 2015.

3. After 2016, organisations can consider implementing applications that require all customers to have LTE.

Long life

LTE is likely to be a fairly long-lived standard. Therefore, it will be viable for manufacturers to build LTE built into network devices. It should have a sufficiently long life that the LTE module will not need replacing during the expected two- to three-year life span of the device.

Although it will take many years for LTE to mature and be widely available, we predict LTE will become the dominant wireless broadband standard. On maturity, it could match the speed of wired (fibre) broadband in some regions, and enable a wide range of "in the cloud" services to be delivered wirelessly.

Sylvain Fabre is research director, and Nick Jones, vice president at Gartner.

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