LTE brings fast Web, not gear maker miracles

By Sinead Carew

BARCELONA (Reuters) - A high-speed wireless technology that is still in development promises to make mobile Web surfing about four times faster, but its impact on the embattled network equipment industry will be much less dramatic, according to industry executives.

Several big operators recently said they will build networks using an emerging technology known as Long Term Evolution (LTE), boosting interest in the technology standard and prompting a slew of news that put it in the spotlight at the Mobile World Congress in Barcelona this week.

China Mobile, the world's biggest mobile provider, said this week that it would test LTE. Alcatel-Lucent and Japan's NEC Corp signed a joint-venture deal to pool their development and marketing of the technology. Even Qualcomm Inc promised chips for LTE, a competitor to its own Ultra Mobile Broadband technology.

LTE promises to make everything from mobile-video sharing to music downloads speedier, but it may not show a visible boost in sales for the network equipment industry any time soon as the first networks are not expected for two years and many operators will wait longer, until the technology matures.

"I would not look at LTE as a savior" said Simon Beresford-Wylie, Chief Executive of Nokia Siemens, the networking venture of Nokia and Siemens.

"You will start to see LTE popping up in 2010, 2011, 2012, but there is a long life ahead for HSPA," he said referring to a technology AT&T Inc, the biggest U.S. mobile service is still adding to its network. AT&T plans to eventually use LTE.

Godfrey Chua, a network equipment analyst at research firm IDC said that even if many operators start LTE services in 2010, the technology would still only serve to help stop the industry from declining rather than create a massive growth spike.

Even with LTE, Chua sees the global network gear market growing only one to two percent a year in the next five years.

Brian Glinsman, a wireless executive from chip maker Texas Instruments said he expects early LTE products to appear in 2009, but demand may take off slowly.

"I think it's gradual," he told Reuters at a TI event at the show. "The real issue is going to be the operators and their acceptance of it."

While both Verizon Wireless, the No. 2 U.S. mobile service, and its minority parent Vodafone Group, which operates in 25 countries, back LTE, others are more cautious.

Hamid Akhavan, head of T-Mobile International, which operates in 12 countries, said LTE appears to be the most promising prospect for future networks but he was not willing to commit to the technology until it proves its promise.

"There's still quite a few issues to be resolved," said Akhavan in an interview with Reuters. "In a best case scenario, some of our markets may be demonstrating LTE in 2010."

T-Mobile USA has yet to start offering services based on today's highest-speed technologies, but aims to do so in the middle of 2008.

Canada's Nortel Networks Corp sees LTE as the most likely upgrade path for about 80 percent of the world's existing mobile phone providers, with others going for an alternative technology known as WiMax.