Mobile operators could save two thirds of their Capex budgets by upgrading their existing 3G networks to support HSPA+ instead of investing in new LTE technology, claims a new study for Aircom International, a network planning and optimisation company.
Aircom believes that a US$750 million investment would be required in the first 12 months for a UK mobile operator to start an LTE rollout, while upgrading a current network to HSPA+ would cost just US$250 million given that only a software upgrade is needed.
This issue, according to Fabricio Martinez, head of services business at Aircom, is already causing some operators to delay their LTE deployment plans, "and we expect this trend to continue... The more operators delay, the more likely the incumbent vendors are to secure longer-term business through HSPA+ and then on to LTE," Martinez said.
Aircom believes that the so-called 'iPhone effect' is piling pressure on to existing infrastructure, and there is a real and immediate need for operators to upgrade their networks.
"The most important factor in deciding a future network technology is ROI. Due to the low Capex investment and new revenue opportunities, deployment of HSPA+ will allow operators to see ROI in three years; perfect timing to upgrade to LTE, when that technology's ecosystem has matured, devices have come to market, and equipment prices have reduced," concluded Martinez.
To justify its argument, Aircom listed the following as reasons for operators to stay with HSPA+:
- HSPA+ allows for re-use of existing HSPA infrastructure and antenna systems.
- HSPA+ offers similar savings in core network infrastructure as LTE by employing 3GPP tunnelling, which removes the need for expensive SGSN and RNC expansions.
- HSPA+ can deliver speed enhancements with allocation of 5MHz bandwidth; LTE channels must be allocated 10-20MHz.
For more on this story:
Reuters & Aircom press release
Related stories:
Telia Sonera releases LTE user survey
T-Mobile CTO: I'll invest in LTE, not HSPA+
LTE deployment: T-Mobile and Orange remain cautious
LTE will bridge the digital divide