Spending on LTE networks to rocket

Spending on LTE infrastructure will rise dramatically over the next four years as network carriers invest in the necessary equipment to host new 4G services, according to figures from research group IHS iSuppli.

Currently only North America registers any significant spending on LTE infrastructure, accounting for £450m of the £919m spent globally in 2010 and set to account for £1.2bn of the £2.3bn in 2011.

However, global spending during 2012 will rise to £5bn before rising to £14bn in 2013 and £17bn in 2014, with North America accounting for only £3bn of this as other regions ramp up migrations to 4G networks.

Jagdish Rebello, senior director and principal analyst for communications at IHS iSuppli, noted that mobile operators will be forced to run multiple network technologies concurrently given the time it will take to move to LTE.

"While this spending represents tremendous growth in next-generation wireless technology, carriers will be required to support multiple air interface technologies simultaneously, as the migration to 4G and LTE will not happen overnight," he said.

"In most cases, carriers will need to offer 2.5G, 3.5G and 4G technologies in order to support all customers and roaming customers."

Rebello suggested that this will affect companies offering equipment to network carriers, particularly semiconductor manufacturers, and he urged them to plan for the future demands that carriers will start making.

"Semiconductor suppliers must focus on developing effective infrastructure solutions that not only meet the current needs of carriers, but achieve alignment with the 3G/3.5G technology migration paths of the carriers to 4G," he added.

Rebello explained that mobile operators will also be forced to look at new ways of pricing networks as they run these concurrent technologies, in particular by moving to smart metering to measure bandwidth use for specific pricing.

The spending will be seen as good news for many, but the UK is likely to be one of the slowest adopters of the new technology, as the auctions and release of the spectrum holdings needed for 4G networks will not be completed until 2014.