LTE Spending to Outpace WiMax, IDC Says

Spending on LTE equipment will exceed spending on competing 4G wireless technology WiMax by 2011, according to IDC analysts, who say LTE's ability to reduce data delivery costs makes it hugely attractive to mobile operators.

LTE, or Long Term Evolution, is quickly gaining momentum as the industry moves toward 4G mobile networks, and spending on LTE equipment will outpace spending on WiMax by the end of 2011, according to research company IDC.

In a report issued April 26, IDC analysts said more than 100 mobile operators-including nine of the top 10 worldwide-are supporting LTE, and such a high level of commitment will push the technology past WiMax and let it continue growing. IDC is predicting that LTE infrastructure revenues will grow to almost $8 billion by 2014.

"The world is coalescing around the LTE standard as a result of its promise to increase speed and capacity to address the exploding growth in mobile data traffic," IDC analyst Godfrey Chua said in a statement. "LTE is an important part of the portfolio of technology solutions that will enable mobile operators to cost-effectively deliver more innovative and robust data applications and services over the mobile network."

More than a dozen new networks are being prepared to go live in 2010, according to IDC. Verizon Wireless officials have said they are on track to deploy LTE in 25 to 30 markets-covering about 100 million people-by the end of 2010. In addition, AT&T plans LTE trials this year, and to begin deploying LTE in 2011.

The first LTE network went live in December 2009 in Sweden through Ericsson and carrier TeliaSonera. And IDC isn't the only research company high on LTE. ABI Research said in a report earlier in 2010 that growth in LTE networks will help drive a 4 percent increase in mobile capital expenditures in 2010.

However, WiMax isn't going away. Clearwire officials have said they plan to offer WiMax service in 80 markets by the end of 2010, which will cover 120 million people. Sprint owns a majority stake in Clearwire.

IDC analysts said despite the strong future of LTE, there are challenges facing the 4G technology, including varying levels of commitment among operators and some issues surrounding spectrum.

What's pushing LTE forward is its ability to reduce data delivery costs, which is important as data traffic continues to outgrow revenues, the analysts said.