Ronnie05's Blog

Telcos delaying 4G: a case of generating returns over the 3G technology cycle

Posted in Industry updates by Manas Ganguly on February 17, 2009

In an earlier blog , http://technologyandtelecom.blogspot.com/2008/11/what-is-biggest-challenge-telcos.html, i had mentioned that RoIs and profitability of innovation is severely challenged, when innovation out strips technology cycles i.e New technologies are introduced at a faster pace and it doesnot allow the incumbent technology to be generate viable returns before it becomes obsolete.

4G poses such a disruptive threat to 3G and 3.5G in Europe! Follow the link to read about LTE/4G versus HSPA/3G/3.5G.
http://www.ft.com/cms/s/0/524d7ea6-fb88-11dd-bcad-000077b07658.html?goback=%2Ehom
Vodafone, France Telecom and Deutsche Telekom have expressed no hurry to launch LTE in their respective countries because
1. They dont want a CAPEX splurge at a time of recession! Sound thought!
2. Avoiding a CAPEX splurge, is also going to re-assure the share holders and stake holders!
3. These players feel that there is enough head room in 3G and 3.5G for enhanced consumer services and thus there is no need to jump into 4G

It would be 2011-2012 before the implementation of 4G networks hits the ground! This thus means that these companies give themselves 2 to 3 years to generate maximum of their returns on the 3G investments!

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