LONDON, May 26 (Reuters) - Mobile telecom operators can save two thirds of their costs in the near future by upgrading older 3G networks instead of investing in new LTE technology, telecoms consultancy Aircom said on Wednesday.
Aircom said a $750 million investment was needed in the first 12 months for a British operator to start LTE rollout, while upgrading a current network to new, so-called HSPA Plus technology can cost just $250 million as it is only new software.
“It will take less time and less capex to solve the problem in the short term for any operator,” Fabricio Martinez, head of the services business at Aircom, told Reuters.
TeliaSonera TLSN.ST opened the first LTE network late last year in Sweden and Norway, but many other mobile operators have only slowly started to invest in the new technology, which promises to ease data overload in many networks.
With prices of new equipment falling fast, the same LTE gear is expected to be significantly cheaper in 12 or 24 months.
“We are seeing operators delay their LTE plans now, and we expect this trend to continue,” Martinez said.
The delays are set to help current leaders of the mobile telecom equipment industry — Ericsson (ERICb.ST), Nokia Siemens [NSN.UL] and Huawei [HWT.UL] — and hurt gear vendors such as Alcatel-Lucent ALUA.PA and Motorola MOT.N, which have bet heavily on a boom in LTE networks.
“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 reviewed investment needs for large operators in the U.S., large Western European markets, the Middle East and in Asia. (Reporting by Tarmo Virki, editing by Will Waterman)