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LTE will not be a competitive differentiator, says NSN exec

The FCC wants gigabit internet in every US state by 2015

Consumers are unlikely to buy 4G mobile services based on speed of throughput and operators’ LTE deployments will even out so quickly that LTE in itself will not be an effective competitive differentiator, according to Mark Neild, head of business transformation, Western Europe, at Nokia Siemens Networks.

Neild’s views run contrary to those held by some operators, including LTE pioneer TeliaSonera and Australian incumbent Telstra, which position their networks squarely as competitive cornerstones.

“Personally I’m not convinced that LTE is a major differentiator,” Neild told telecoms.com. “What LTE does is it makes mobile broadband more affordable because it reduces the cost per delivered megabyte. I don’t think that having the fastest network around is actually going to attract a lot of customers; I’m not convinced that people buy on speed.”

In any case, Neild argued, the capacity and efficiency gains afforded by LTE are likely  simply to generate a lot more mobile broadband traffic. “And with more traffic,” he said, “people don’t necessarily go any faster.” This chimes with an increasingly widely held view that LTE won’t actually solve the capacity crunch because the demand for mobile broadband will fill whatever capacity is made available to it.

If there were to be an advantage it would only fall to those operators that were the earliest to deploy the 4G technology, Neild said, drawing comparisons with carriers that won exclusive iPhone distribution deals with Apple. But he added that deployments will “even out relatively quickly” negating any benefits enjoyed by the earliest adopters.


4 comments

  1. Olivier 12/08/2010 @ 12:29 pm

    Interesting but if indeed it will even out that means that the operators that would delay and stay on 2G/3G would be left far behind and loose quickly their competitiveness.

    The wireless networks are following the wireline networks, requiring all IP / high throughput that currently only LTE promises.

    But the operators still have to find a way to not become only the fat pipes providers when the money is to be made on the apps and services…

    • Penny 14/08/2010 @ 12:43 am

      I live wirelessly – at work, and at home. The down side? Indeed – the speed. I want to stream video without delay, up/download files faster, sync faster, talk, text, what-ever the moment’s wish or need is, all at the same time regardless of where i am. I am a middle-class consumer. If 4G “takes the wait out”, I will pay more. Today.

  2. kamal 23/08/2010 @ 1:28 pm

    If this is the case, then why Verizon’s CFO told that it can charge subscribers a premium for the higher-speed service. “Customers will pay for quality and premium service and premium speed”. If LTE does not differentiate them from other players then they should not charge premium for LTE based services from customers?

  3. Praveen Kumar 18/10/2010 @ 12:36 am

    Mark, couldn’t agree more with you. I believe the early adopter will get a head start over others. The main differentiator comes from packaging it into a complete service i.e. a combination of availability, usability, & compatibility which will give competitive advantage to an operator and hence better margins.

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