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What 4G Means to Carriers
Certainly 4G is a marketing tool to attract and retain customers, but transitioning to 4G networks is also expensive, and requires additional back-end maneuvering to manage the hand-off between 4G and legacy networks. 4G means a significant capital outlay for carriers seeking to upgrade, new services that exploit the faster network, real-time charging/billing to effectively monetize and manage data services, and an attractive 4G device portfolio to get the technology supported and in the hands of users. This last point is key, because all the speed in the world can’t sell a network without devices that consumers want and that exploit the 4G technology employed.
We can look at device rollouts to glean some insight into carrier strategy. Until CES this year, neither Verizon nor AT&T had 4G handsets. The only U.S. carrier with a 4G handset was Sprint. The Verizon iPhone 4 is CDMA, not LTE (4G). And neither the iPad or the iPad2 will have 4G connectivity. Coupling this lack of 4G with the facts that selling iPads is like printing money, users are already dumping the original iPad in anticipation for iPad2, data services represent the most urgent need area in terms of network stress/support, and tablets are quickly becoming the preferred mobile data portal, it would seem the top carriers have a more realistic view of the rate of adoption of 4G than their marketing might suggest.
Network strategy also reveals a slightly different picture than the advertising. We can see many carriers who’ve chosen to use a mix of “4G” technologies for their networks—this despite the public vitriol about which tech is better. Deutsch Telekom recently announced HSPA+ to its 4G mix, AT&T is now announcing it will mix LTE and HSPA+ network resources, and Sprint, the U.S. bastion of WiMAX technology, announced at Mobile World Congress that it is “looking at trends and the migration track toward LTE.” As Edward Kozel, CTO of Deutsch Telekom, explained, “The key feature of the 4G experience is that our customers will always automatically be able to use the fastest connection currently available…it won’t matter whether this connection is based on Wi-Fi, LTE, or HSPA+”
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Consumers want sexy devices on fast, reliable networks, no matter the “G” rating. |
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What 4G Means for Consumers
For consumers, it’s all about devices, network reliability, and perceived speeds—consumers want sexy devices on fast, consistently networks, no matter the “G” rating. A consistent 600% increase over 3G speeds is significantly perceptible, so for the time being, even HSPA+ will meet consumers’ expectations.
A great example of this is AT&T’s success even as its network quality suffered. In the United States, AT&T had the coolest device—the iPhone—for years, and despite consistently garnering the lowest scores for network quality, millions of users put up with it to have the iPhone.
Now that the iPhone is not locked to one carrier and new, hip smartphones drop almost daily, network reliability and quality will play a bigger role. This boils down to QoE, or more importantly perceived quality of experience in your area. As analyst Devin Coldewey wrote in MobileCrunch.com: “What matters is what’s available and how fast it is, where you are.”
Is 4G Just a Speed Limit?
So does attaching a theoretical speed limit badge to 4G even matter? Maybe not. With the flexibility ITU has given to carriers, just as HD can mean everything from 720p to 1080p (which has more than double the pixels per image of 720P), 4G can mean everything from HSPA+ to LTE to WiMAX.
Some analysts, like Dan Hays at PRTM, feel that the confusion around 4G will ultimately cause its demise. "The labeling of wireless broadband based on technical jargon is likely to fade away in 2011," said Hays. "That will be good news for the consumer. Comparing carriers based on their network coverage and speed will give them more facts to make more informed decisions."
If ITU can change the definition of 4G based on what operators are able to bring to market, and consumers perceive a faster experience on a reliable network as 4G, then maybe the designation doesn’t mean as much as the talking heads would like it to.
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