US catches up with Europe in 3G and looks to LTE

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US catches up with Europe in 3G and looks to LTE

By CAROLINE GABRIEL

Published: 16 September, 2008

READ MORE: LTE | Europe

The US financial world may be crashing around us, but the indications for the wireless market remain defiantly robust, buoyed by the rise of uptake of data and mobile web services. These, in turn, are boosting investment in new networks, especially as the US finally catches up with western Europe and east Asia in 3G usage.

According to wireless industry trade group the CTIA, which held its major conference last week, data now accounts for 20% of wireless operator service revenues in the US, up from 10% in the first half of 2006. Carrier service revenue from data reached $14.8bn in the first half of 2008, up 40% on the same period a year earlier. This figure includes text as well as email and mobile web data, and as SMS finally becomes almost as habitual to Americans as Europeans, a total of 75bn text messages were sent in the US in June alone. This was up 160% over June 2007, while the showing for MMS was even more dramatic, with 5.6bn multimedia messages sent in June, almost as many as the total for the whole of 2007.

According to Steve Largent, CTIA president and CEO, the US has finally caught up with western Europe in the adoption of 3G. Last week, researchers from comScore released a report saying that 28.4% of US mobile subscribers now use 3G devices, comparable to 28.3% in the main European markets. There were over 262m mobile users in the US in June this year, up almost 20m on the year earlier, although not quite matching the all-time record for year-on-year subscriber growth, 25.7m in 2005.

While 3G is driving healthy service revenues now, operators in the US and elsewhere are already looking to next generation networks to support more advanced data, multimedia and mobile web offerings, and hopefully increased user uptake and ARPU. By 2013, the number of base stations supporting wireless networks will increase to 5.7m, up from 3.6m in 2007, as networks expand and 4G technology becomes a reality, according to new figures from ABI Research. One key reason for the global growth is the proliferation of Mobile Internet Devices and advanced web-enabled smartphones, which contribute increased network traffic and email access. As these devices become more commonplace and less high-end, the demand for bandwidth and the necessary network support needed to sustain that growth is only bound to increase, says ABI.

However, there were mixed feelings about '4G' at the CTIA event. While vendors were talking as though LTE was almost a reality today - with vendors like Motorola and operators like Verizon already carrying out tests, even before the standards are finalized - other commentators set 2015 as the likely date for LTE to go mainstream. A panel led by analyst Andrew Seybold argued that there is still a great deal of life in 3G+ technologies like HSPA and HSPA+, while LTE is immature, and operators will not be in a hurry to invest, except in isolated hotspots of high demand for multimedia. Seybold pointed out that, despite the increase in data services, for carriers voice services will still pay the bills for some years to come.

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