Everything in business comes down to money, and money isn't exactly easy to come by these days. While we'd all like to see our carriers expand their coverage and offer better service, the costs to the providers involved in doing so need to be weighed against the money they'll make from our usage before they can make a decision to invest more resources into a project. It costs money just to provide wireless access, and building out a brand new network - as we're waiting for carriers to do for WiMAX and LTE - will cost a great deal of money.
Besides the choice between investing in WiMAX or LTE for 4G technology, carriers also have to determine whether they want to start working on their 4G network or if their money would be better spent improving their existing 3G network. AT&T and T-Mobile are two carriers (along with Verizon) who have selected LTE for 4G, but at last week's Long Term Evolution summit both companies divulged plans to improve their 3G HSPA networks before sinking money into LTE. With a series of upgrades to the radio network, antenna structure and packet core, HSPA providers can make upgrades to their system to improve it HSPA+ standards, similar to Verizon and Sprint upgrading from EVDO to EVDO Rev-A. T-Mobile only recently rolled out their 3G network - the Google/HTC G1 smartphone was their first 3G-enabled device - and plan to expand coverage while upgrading to HSPA+ in late 2009 and 2010. AT&T will begin to upgrade their HSPA network to HSPA+ this year.
So what about LTE? Despite their plans to improve their 3G network first, AT&T is working towards LTE with initial deployments planned for 2010 and a commercial launch aimed for 2011. The good news is that once deployed, actually providing 4G service like LTE will be considerably cheaper for the carriers than their current costs for 3G. Hank Kafka, vice president of network architecture for AT&T, cited a study that showed that it cost about 13 cents to deliver 1 megabyte of capacity to a user on an LTE network running at full capacity on a 5 x 5 MHz channel. By comparison, HSPA costs providers about 77 cents to trasmit 1 megabyte and even on HSPA+ it will cost the provider 39 cents per megabyte. Unfortunately, those future savings can't negate the cost of developing and deploying the brand new LTE network.
Will AT&T reach their 2011 goal for LTE? Let's cross our fingers that Kafka and Company keep those big operating costs in mind as they allocate their resources over the next crucial year.
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