Are LTE subs growth rates over 400% believable?

Putting the ongoing economic havoc to one side, a recent report from Pyramid Research predicts LTE subscriptions will grow at a rate of over 400 per cent annually between 2010 and 2014.

The author backs up this forecast with the claim that nearly 30 mobile operators worldwide have publicly committed to deploying LTE, with 12 of them expected to roll out commercial services in 2010 and the remainder during 2011 and 2012. Finally, Pyramid maintains that, while it took nearly six years for UMTS/HSPA to reach 100 million subscriptions, LTE will take just over four years to reach the same milestone.

Heady numbers given that consumer spending continues to fall in the majority of developed countries and global operators are attempting to impose harsh cost-cutting programmes--as seen by Vodafone's plans to reduce costs by €1 billion in 12 months.

While accepting that smartphones, and in particular the iPhone, have bucked the trend of a declining handset market, these high-cost items remain a niche market in terms of shipment volumes and revenue generation.

But, having lived through the hype that surrounded HSCSD, GPRS, 3G and now HSPA, I have to question what service(s) will be the driver behind such an enormous uptake in LTE? I accept that mobile Internet usage will continue to rise, but only if operators continue to maintain (or lower) the price of mobile data downloads. I also struggle with the sweeping announcement made by another market research firm that "LTE will bridge the gap between the mobile and consumer electronics worlds."

To make matters worse, the writer of this study then made the bold pronouncement that he expected "LTE to enable a next generation of connected devices, like portable games consoles and digital cameras." How many other wireless technologies have attempted to search for this particular Holy Grail? WiFi and Bluetooth are two (out of many) that have made marginal inroads into achieving this, but only after decades of trying.

Why should LTE be any different when it will be deployed and marketed by the giant operators that understand technology but continually fail to recognise consumer needs. As one industry observer recently commented: "The major cellular service providers are overloaded with highly skilled engineers who lack ambition and marketing flair."

Their engineering capabilities have been demonstrated by deploying increasingly higher mobile data networks, but the drivers behind the uptake has noticeably come from outside the cellular industry, most notably Apple's iPhone and Google.

If we believe the 400 per cent LTE growth rates, then I would submit that the bulk of any data revenues flowing across these networks will not accrue to the operators, but to others who recognise consumer needs and apply style and purpose to satisfying this demand. -Paul