Wireless Network Investment to Top $53 Billion by 2016: Report

 
 
By Nathan Eddy  |  Posted 2011-08-24 Email Print this article Print
 
 
 
 
 
 
 

The $53 billion figure assumes a scenario in which U.S. carriers invest more rapidly and start to produce 4G-based offerings before global competitors gain traction.

Wireless telecommunications companies in the United States could invest $25 billion to $53 billion in 4G cellular wireless networks between 2012 and 2016, triggering $73 billion to $151 billion in gross domestic product growth and creating 371,000 to 771,000 jobs, according to a report from Deloitte. Additional growth could occur as high-tech companies create new mobile broadband products and services, further changing the way people live, work and learn.

The report, "The Impact of 4G Technology on Commercial Interactions, Economic Growth, and U.S. Competitiveness," investigates the economic dynamics surrounding 4G technology and explains how the United States can maintain the global leadership position in mobile broadband innovation it won during the 3G era.

The $25 billion figure assumes a baseline scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G extends to the middle of the decade. Under these conditions, U.S. firms are vulnerable to incursions by foreign competitors capitalizing on aggressive efforts in their home markets to deploy 4G networks and develop 4G-based devices and services.

The $53 billion figure assumes a scenario in which U.S. carriers invest more rapidly in 4G networks and start to produce popular 4G-based offerings before global competitors gain traction. In this scenario, the demand stimulated by new offerings justifies more network investment, setting off a virtuous cycle of investment and market response that positions the United States to retain its mobile broadband leadership.

"Investment in such a powerful form of communication contributes to the economic recovery and provides a job-creating engine for the future," said Phil Asmundson, vice chairman and U.S. media and telecommunications sector leader of Deloitte. "The key to harnessing the potential benefits of 4G technology lies in America's market-driven wireless sector, which encourages the emergence of innovative applications that spur productivity and could produce the same surge of innovation and demand we experienced during the 3G era."

The report also noted rapid adoption of cloud computing further enables the United States to take full advantage of 4G's potential impact by allowing developers and entrepreneurs to analyze the market's response to new applications, content, solutions and business models-cheaper and quicker.

"Cloud computing will allow handheld devices to be more compact and efficient while making them tremendously more useful and powerful," Asmundson said. "Applications, storage and computing power all can largely reside in the cloud, but only if connectivity is robust, reliable and secure. The benefits of 4G and cloud go beyond the telecom sector. Together, 4G and cloud technologies support the kind of entrepreneurial ecosystem that has made the United States a mobile broadband leader."

The advent of high-performance wireless capacity, coupled with cloud infrastructure and other advances, is proliferating new offerings and capabilities that exceed what has been possible with 3G technology, the report notes. In addition to consumers, a variety of U.S. end-user industries, including nonprofit and government entities, are likely to use devices and services incorporating the capabilities of 4G technology to better serve their customers, patients, clients and students. This includes applications such as augmented reality for businesses, machine-to-machine technology involving the use of sensors and actuators, and the development of smart highways.

 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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