Equipment vendors are trying to convince mobile operators to spend money upgrading their networks to deliver faster Internet access, with two technologies battling for the bucks: LTE (Long Term Evolution) and WiMax. However in the short term the winner could be an intermediate technology, HSPA+, as operators look for ways to wring more out of their existing networks with less capital outlay than LTE requires.
US operator Verizon Wireless made headlines at the Mobile World Congress in Barcelona this week with its announcement that it will build an LTE (Long Term Evolution) network this year, offering commercial service next year.
Other operators are proving slow to adopt LTE -- but vendors of the rival WiMax technology will have a hard time taking advantage of this reluctance because of the economic situation.
Verizon Wireless' announcement gave LTE a boost: a more palpable deadline means standards and equipment will have to be finalized, said Mark Newman, chief research officer at market research company Informa Telecoms and Media.
"It gives confidence to other operators looking at LTE. Because of the financial markets operators are averse to risk. Being a pioneer is quite risky, but Verizon Wireless going early helps to reduce that risk a little for other operators," said Newman.
Verizon Wireless will buy its LTE radio base stations from Alcatel-Lucent and Ericsson.
Some other operators that will be ready to roll out LTE networks in a similar timeframe, according to Mike Iandolo, president of the Wireless Networks Product division at Alcatel-Lucent.
Rolling out LTE service, though, involves building a whole new network of base stations, while other, cheaper, ways exist to improve the performance of many existing cellular networks, such as upgrading an existing HSPA (High Speed Packet Access) network to HSPA+.
HSPA, already deployed by some operators, can deliver data at up to 14Mbps. And this year, a few operators will start offering HSPA+ services that offer up to 21Mbps, with 42Mbps on the way.
During its LTE trials Verizon Wireless saw peak speeds of 80Mbps.
"There weren't a lot of big LTE announcements at the show, other than Verizon Wireless. The emphasis seems to be much more on extending HSPA, and it seemed like there was a push back on LTE," said Richard Webb, directing analyst at market research company Infonetics. He doesn't see operators installing LTE in any significant volumes until 2011.