September 30, 2009 / 7:05 AM / 10 years ago

Hefty LTE bill pressures mobile tel cos -study

 * Network sharing could see boost from LTE costs -consultancy  * LTE deployment to cost U.S. carrier $1.78 bln in first year  * First yr cost seen at $880 mln in a large European country
 By Tarmo Virki, European technology correspondent
 HELSINKI, Sept 30 (Reuters) - Building mobile telecom networks for next-generation LTE technology will be too costly for many carriers and they will be forced to find new means, like network sharing, to cut costs, telecoms consultancy Aircom said on Wednesday.
 There is increasing urgency worldwide for faster wireless networks as growing demand for mobile data is driven by smartphones like Apple’s (AAPL.O) iPhone and laptops with data cards.
 Aircom studied planned LTE launches in key markets around the world and estimated a U.S. operator would need to invest $1.78 billion in the first year of LTE roll-out.
 Verizon Wireless, owned by Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L), plans to start installing LTE into its network later in 2009, ahead of AT&T (T.N).
 The world’s telecom carriers are lining up infrastructure vendors as they prepare to launch LTE technology, which will enable faster uploads and downloads of movies, music and other data to cellphones.
 The cost would be around $880 million for a major operator in a large European country like Germany, and $750 million in Britain, Aircom said, adding the costs would be somewhat smaller in most parts of the world at first.
 From the investments, 25-40 percent will go to improving fixed-line networks, which are used to connect mobile base stations, Aircom said.
 “Very few operators have the available resources or shareholder freedom to meet these costs,” said Margaret Rice-Jones, chief executive of Aircom.
 “This means that innovation within the mobile industry needs to be redefined,” she said, adding operators need to find new technologies and approaches to manage their networks, which will let them deliver services with lower costs.
 The significant investment required for LTE deployment could also see mobile operators globally embracing network sharing as a means of reducing capital expenditure and operating costs, Rice-Jones said.
 First LTE services will be opened later this year, with mass deployments seen in 2010.  (Reporting by Tarmo Virki, editing by Matthew Lewis)   

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