What is LTE and what will it bring to operators?

Last updated: 11 April 2014

There’s been a lot of debate and discussion around Long Term Evolution (LTE), sometimes referred to as 4G technology. The move towards LTE is proving to be a key driver in the creation and launch of new services, particularly those being launched at this week’s Mobile World Congress.

But what it is? In short, it’s a new standard for mobile network operators that is set to be the next major step forward for high-speed wireless communications. As a high-bandwidth, all-IP, wireless network, LTE offers an excellent end-user experience for applications where data is important – it means faster emails, file uploads, VPN connections, cloud computing and application-sharing when users are on the move. Operators are investing in the required licenses and network infrastructure, but what return on investment can they expect to see?

Bandwidth is an obvious starting point. Our demand for mobile data is exploding, be it for downloading apps or media, accessing news stories or checking our friends’ latest status updates on Facebook. However, many of us still feel limited by the bandwidth available through 3G networks. LTE promises far greater bandwidth, meaning that more of these tasks can be carried out in a short space of time. The benefit of this for operators is that this will increase the average revenue per user (ARPU), ensuring that they are at the forefront of the fight for the next generation of customers.

In the longer term, making the high-speed internet world available to mobile users opens up a world of revenues in terms of value-added services. Introducing advanced connectivity allows operators to offer new high speed channels & propose new services to their customers that simply weren’t possible before.

The important thing for service providers is not to allow ‘Over-the-Top’ (or third-party) players to grasp all of the service revenues. Mobile payment solutions such as NFC look set to offer another new revenue stream, while machine-to-machine (M2M) connectivity should benefit from the full-Internet Protocol market (tablets, dongles…), enabling new optimization possibilities including network off-load.

Two types of positioning have appeared on the LTE market so far. Control all the services or play the open partnership with Internet Service Providers… Which one are you going to be?