Data Demand to Drive 4G Broadband Forward

New report shows explosive growth ahead for high-speed wireless -- yet WiMAX may emerge a loser.

By Judy Mottl | Posted Jul 31, 2008
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Burgeoning demand for data services will translate to soaring popularity for next-generation wireless broadband technologies, with 2.1 billion users projected worldwide by 2015, according to a study released Wednesday.

Big winners will be carriers and handset makers, as growing adoption will generate $784 billion globally in service revenue by 2015 -- a dramatic 2400 percent spike from today's nascent levels of wireless broadband penetration, according to the study from telecom analyst firm Analysys Mason.

"The availability of affordable mobile broadband services, mobile devices and data services are driving revenue growth as wireless penetration hits saturation in developed countries," Mark Heath, an associate analyst at Analysys Mason and the report's co-author, told InternetNews.com.

The news comes as carriers, handset makers and other wireless industry players are placing ever-larger bets on higher-bandwidth fourth-generation (4G) technologies in a race to widen their pipelines to meet increasing demand for data services.

Wireless service providers currently are moving from 2G network standards -- such as Global System for Mobile Communications (GSM), Time Division Multiple Access (TDMA) and Enhanced Data Rates for GSM Evolution (EDGE) -- to 3G technologies, which include Wideband Code Division Multiple Access (W-CDMA), Universal Mobile Telecommunications System (UMTS) and High-Speed Packet Access (HSPA).

Apple and AT&T recently unveiled the new 3G iPhone, for instance.

But while 3G capabilities are already providing greater speeds, network capacity and support for more bandwidth-intensive wireless features like video telephony, 4G technologies like WiMAX and LTE are expected to deliver even larger improvements.

Yet users may take some time to jump on the 4G bandwagon.

While both WiMAX and LTE are expected to grow in availability and popular, neither will eclipse the current HSPA standard anytime soon. According to Analysys, HSPA -- which is a collection of so-called "3.5G" technologies that improve on UMTS -- will support over 50 percent of wireless broadband users by the end of 2015.

HSPA will grow from 61 million users this year to 1.1 billion by 2015, the report said.

According to Heath, the main reason for its projected growth is that HSPA is the most natural evolution from current-generation technologies.

As for the remainder of the market, LTE will surpass WiMAX despite its slow early growth, according to the study

WiMAX is stalling a bit in U.S.-based enterprises due to challenges in network builds and slow delivery of compatible handsets.

The study states that WiMAX will be squeezed out of developed markets by fixed and cellular broadband services. By 2015, the technology will serve just 98 million customers worldwide, mostly in developing regions.

On the other hand, LTE is expected to achieve a customer base of 440 million by 2015 and will generate $194 billion in global revenue as it becomes the preferred technology used by a majority of carriers globally, according to Analysys.

In North America alone, there will be 43 million LTE customers by 2015, with associated revenue of $31 billion, the study said.

Article courtesy of InternetNews.com

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