The LTE/HSPA+ Disconnect

In Dallas earlier this week ATIS hosted a 3GPP LTE conference that drew attendees from many of the major U.S. operators and key vendors. As expected, many of the vendors touted the benefits of moving to LTE and their projections for when commercial LTE will occur were much more bullish than some of the operators in attendance.

Although Hank Kafka, vice president of network architecture at AT&T, acknowledged that LTE will enable carriers to dramatically lower their operating expenses (1 Mbps of data delivered over LTE will cost about one-sixth of what it costs to deliver 1 Mbps of data over UMTS), he said that AT&T would probably not trial LTE until 2010 and not start deployments until 2011.

Instead, the operator plans to upgrade from HSPA to HSPA+ because that is only a software upgrade and offers a substantial increase in speed. In fact, Kafka said that HSPA+ offers a menu of choices and the carrier has not finalized what it will deploy when--in other words--AT&T hasn't determined whether it will deploy 64 Quam or MIMO--when it upgrades to HSPA+ this year.

But to take advantage of those increased speeds offered by HSPA+, consumers will have to upgrade their handsets and laptop cards.  And once the operator deploys LTE, another device upgrade will have to occur to get the economics of scale and speeds that LTE provides. AT&T and others don't seem concerned by this fact. I heard repeatedly from other attendees that consumers upgrade their handsets every 18 months so this will be a natural progression.  Nevertheless, I'm surprised that AT&T isn't in a bigger hurry to deploy LTE. With its main competitor Verizon holding fast to its year-end 09 debut of LTE, I would think AT&T would be more aggressive in the race. Kafka said that he didn't expect the upgrade to LTE to be as difficult as it was to upgrade to 3G. "With 4G we are going into new spectrum. With 3G the upgrade was harder because there was no new spectrum."

So why isn't AT&T more anxious to make use of that new spectrum? --Sue