HELSINKI, Dec 18 (Reuters) - Operator investments in new super-fast LTE mobile networks will not provide a boost for the ailing mobile telecom equipment market, the head of Motorola's MOT.N wireless networks business said.
“Total dollars being spent ... I don’t believe they will increase,” Bruce Brda told Reuters in an interview.
The mobile network gear market, while showing strong growth in emerging economies, has shrunk overall of late as newcomers from China have agressively driven down prices and operators cut spending in the downturn.
Telecom carriers globally are lining up infrastructure vendors as they prepare to launch LTE technology, which offers cheaper operating costs and enables faster uploads and downloads of movies, music and other data to mobile devices.
Industry watchers have said LTE, or 4G, will boost the overall market in coming years, but Brda said this was unlikely as operators’ average revenue per user (ARPU) was stagnant across developed markets, despite booming demand for mobile Internet services.
“The increase in demand for mobile broadband is skyrocketing and the ARPU increase is almost insignificant. The economics just do not work,” Brda said. “The only way to afford 4G investment is to cut back on 3G.”
Nordic operator TeliaSonera opened the world's first LTE service this week in Oslo and Stockholm using equipment from China's Huawei [HWT.UL] and top mobile gear maker Ericsson ERICb.ST. [nLDE5BD1NK]
In one of the biggest public deals to date, U.S. operator Verizon picked Alcatel Lucent ALUA.PA and Ericsson as its key LTE suppliers. Motorola has so far unveiled an LTE deal with KDDI 9433.T in Japan.
Motorola is the world's sixth largest mobile network gear maker, behind Ericsson, Huawei, Nokia Siemens [NSN.UL], Alcatel-Lucent and ZTE 0763.HK.
(Reporting by Tarmo Virki; Editing by Dan Lalor)
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