North America: The race to LTE
North America has been a trailblazer in the LTE market and is the global leader for 4G services. Verizon Wireless in particular has been setting the pace with an aggressive LTE expansion throughout 2011 which is expected to continue into 2012.
AT&T’s abandoned acquisition of T-Mobile’s US assets was the big story of the year that didn't happen. If the deal had gone through, it would have drastically shaken up the US LTE market, and trumped market leader Verizon. Verizon will sleep easier with the deal buried.
Sara Kaufman, analyst for telco strategy at Ovum, believes that AT&T had not been relying exclusively on the deal's fruition to move its LTE strategy forward. AT&T, she says, remains the main LTE rival to Verizon, T-Mobile USA notwithstanding.
The two, intriguingly, are embarked on pretty much opposing LTE strategies. Verizon has rushed to provide comprehensive coverage as quickly as possible. hell bent of paying top dollar for 4G spectrum as it goes. AT&T, on the other hand, has been able to utilise its existing HSPA+ network for 4G allowing it more room for a slow and deliberate LTE expansion.
Sprint and Clearwire LTE expansion will also be one to closely watch over the next year. The two have recently expanded their services agreement in a deal that could be worth up to $1.6 billion over the next four years. The move reaffirms each company’s LTE targets, but with Clearwire losing its cable supporters to Verizon, the two companies impact on the market is likely to be less sizeable than it potentially could have been.
Other important developments on the horizon for 2012 include the LightSquared LTE endeavour, which has yet to be given approval for service tests. If the deal were to be approved over the coming year, it has the potential to upset the LTE market according to Kaufman. She expects that LightSquared could change the dynamics of the market, with the company likely to try to undercut the other major operators in price.
2012 looks set to be a year in which WiMAX declines gracefully, especially now that Sprint and Clearwire have clearly stated their intention to develop LTE most likely at the expense of WiMAX. Analyst forecasts for WiMAX are being tweaked to reflect the service’s potential demise, which might well be an unignorable fact by the end of the year.
Although Canada is considered a conservative market in terms of adopting next-generation technologies, a number of LTE deployments have occurred in the country and it is becoming an increasingly attractive option for LTE operators. Data usage in Canada is growing, and Kaufman believes that operators will want to exploit the potentially cost efficiencies inherent in LTE networks. There has been some speculation that Canada’s strict telecoms laws will at some point be eased to allow more involvement from outside investors. If this were to occur, fast expansion of Canada's LTE market will be all the more likely.
Developments in 2012
Following the failure of the AT&T and T-Mobile USA merger, market watchers are expecting further big consolidation moves over the next 12 months.
Verizon’s $3.6 billion deal to acquire122 advanced wireless spectrum (AWS) licences from SpectrumCO is subject to approval by the FCC, with a decision likely to be made in 2012.
LightSquared had planned to launch its LTE service early next year but this will depend upon a resolution between the company and the GPS industry. The FCC has said it will block LightSquared if the wireless provider can’t prove it can operate side-by-side with GPS networks.
Canada’s Roger Communications plans to extend its LTE network to 25 markets in 2012. The company wants to expand upon its LTE service but will face competition from Telus, which plans to launch its LTE network next year.