Telecom Companies Could Invest Up to $53m in 4G Technology – Deloitte

Michelle Remo, “Big 4″ observer
August 22, 2011 /

Wireless telecom companies in the United States could invest $25 to $53 billion in fourth generation cellular wireless networks (4G) between 2012 and 2016, pushing the gross domestic product growth to $73 to $151 billion and the jobs to 371,000 to 771,000, according to a Deloitte study.

The Deloitte report, “The Impact of 4G Technology on Commercial Interactions, Economic Growth and U.S. Competitiveness,” looks into the economic dynamics surrounding 4G technology.

Additional growth could also take place through the creation of new mobile broadband products and services by high-tech companies.

Deloitte said the $25 billion figure “assumes a baseline scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G extends to the middle of the decade.”

Under these conditions, U.S. firms are vulnerable to incursions by foreign competitors that invest in aggressive efforts in their home markets to deploy 4G networks and develop 4G-based devices and services.

“The $53 billion figure assumes a scenario in which U.S. carriers invest more rapidly in 4G networks and start to produce popular 4G-based offerings before global competitors gain traction,” Deloitte added.

In this scenario, the demand triggered by new offerings justifies more network investment, setting off a “virtuous” cycle of investment and market response that puts the U.S. in a position to retain its mobile broadband leadership.

Investment in communication aids in economic recovery and provides jobs for the future, according to Phil Asmundson, vice chairman and U.S. media and telecommunications sector leader, Deloitte LLP.

“The key to harnessing the potential benefits of 4G technology lies in America’s market-driven wireless sector, which encourages the emergence of innovative applications that spur productivity and could produce the same surge of innovation and demand we experienced during the 3G era,” Asmundson said.

‘Global competition should spur U.S. innovation and investment’

According to the report, more than 150 carriers in 60 countries are currently committed to 4G deployments and trials, including South Korea, Sweden and China that are moving rapidly to reap the benefits of 4G technology.

By allowing developers and entrepreneurs to analyze the market’s response to new applications, content, solutions and business models – cheaper and quicker – USA continues to take full advantage of 4G’s potential impact with the rapid adoption of cloud computing.

“Cloud computing will allow handheld devices to be more compact and efficient while making them tremendously more useful and powerful,” Asmundson said.

“Applications, storage and computing power all can largely reside in the cloud, but only if connectivity is robust, reliable and secure. The benefits of 4G and cloud go beyond the telecom sector. Together, 4G and cloud technologies support the kind of entrepreneurial ecosystem that has made the United States a mobile broadband leader,” he added.

The report noted that high-performance wireless capacity, coupled with cloud infrastructure and other advances, proliferates new offerings and capabilities that exceed what has been possible with 3G technology.

In addition to consumers, a variety of U.S. end-user industries, including nonprofit and government entities, are likewise expected to use devices and services incorporating the capabilities of 4G technology to better serve their customers, patients, clients and students. This includes applications such as augmented reality for businesses, machine-to-machine technology involving the use of sensors and actuators and the development of smart highways.

4G empowers marginalized groups

Deloitte’s report suggested that the deployment of 4G mobile broadband has special implications for marginalized groups, rural communities and localities with limited access to full broadband connectivity and some small businesses.

The report explained how equipping these marginalized groups with 4G access helps in moving them further into the nation’s economic mainstream, thereby serving the public interest while boosting U.S. competitiveness.

‘Lessons from the 3G Revolution’

The report emphasized that America’s success in 3G was spurred by entrepreneurial innovation.

“When the government auctioned large amounts of spectrum, removed spectrum caps limiting individual carriers’ spectrum holdings and permitted market forces to operate, private enterprise pursued new opportunities and a robust 3G ecosystem was born,” Deloitte’s analysis noted.

The FCC is moving to expand spectrum supply through a new incentive auction, but the report indicates that it will be difficult to keep pace with projected demand.

Accordingly, there is a continuing need to find additional ways to make better use of available spectrum and to unlock additional spectrum.

 

Share your opinion