With Verizon Wireless having officially turned on their brand spanking new LTE network, analyst firms are starting to predict just how much money the bleeding edge high speed mobile broadband technology is going to make operators. ABI Research estimates that by 2015 revenues from LTE will exceed $15 billion. That’s a terribly small number compared to what the folks at Juniper Research said earlier this month: $200 billion by the same year. Then again the Juniper figures are for the world in general, while ABI is focusing on the United States. If both figures are right, then only 7.5% of the revenue expected to be made from LTE in 2015 will actually come from America.
“The LTE service revenue growth curve for Western Europe is practically a straight line,” says ABI Research Director Philip Solis. “That contrasts sharply with constantly accelerating revenue growth in the US, and is largely due to the sometimes exorbitant amounts European network operators paid for their 3G spectrum: many of those operators want to squeeze every drop of value from their 3G investments before migrating to 4G.” That actually sounds a lot like the path T-Mobile USA is going to take.
But when it comes to voice, Research Analyst Xavier Ortiz says: “Although carriers will appreciate LTE’s bandwidth efficiency and users its higher data speeds and lower latency, voice will only start to enter the LTE picture in a meaningful way in 2013 or 2014. Existing networks still provide voice services with great coverage and reliability. Using LTE for voice will mean completely abandoning the tried-and-true legacy TDM backhaul and replacing it with IP backhaul at considerable cost. Carriers will only make that leap when 4G can truly replace 2G and 3G for voice, although ABI Research recommends doing it sooner rather than later.”
Assuming your typical consumer will spend $60 per month for Verizon’s LTE service, that’s $720 per year, so divided by $15 billion and it’s roughly 20.8 million users in 2015. That’s a lot of bits flying through the air and a totally realistic prediction; maybe even a bit conservative if you ask us.