4G is not 4G without the backhaul to support it

by Steve Blum • , , , , ,

“4G is not 4G without the backhaul to support it,” said Sara Kaufman, an analyst who follows mobile operator strategy for Ovum, speaking today at the CTIA Enterprise & Applications conference in San Diego. Mobile carriers have to start by connecting cell sites to fiber networks when they upgrade their networks to 4G speeds using LTE technology.

She predicted robust growth for LTE-based 4G mobile data service in the U.S., but had trouble explaining exactly why. There’s “no convincing evidence of LTE services generating new revenues”, Kaufman said, pointing to another barrier to faster growth for the technology. So far, LTE lacks a killer app or new services that would make it more valuable to subscribers.

Subscriber adoption has been lackluster. Only 2% of Verizon’s customer base currently subscribes to LTE service. Kaufman does not see widespread demand for it, because mobile phone companies have not given consumers a compelling reason to buy a new phone and upgrade their mobile data service.

Even so, she believes LTE deployments are inevitable, citing figures from Ericsson that show smart phones use ten times the data that conventional, dumb phones use, and larger devices – laptops and, presumably, tablets – use ten times as much as smartphones.

Her case for LTE is made by cost savings, not revenue. The result is slower build outs, particularly for carriers that have deployed HSPA+ networks in the interim. “Eventually operators will have to move to LTE,” she concluded, “but there’s no rush to do it.”