4G: State of the Union

1Executive Summary

2008 was a transformative year in the wireless industry. Not only did the number of global subscriptions surpass 4 billion but there was also a significant uptick in mobile data usage. Buoyed by growing mobile broadband availability, numerous cheaper and better devices, and an insatiable appetite for mobile applications, the landscape of the mobile industry is undergoing a fundamental shift from a pure voice-centric industry to a multimedia data-centric industry.

The growing demand for mobile data in a flat-rate economy is also posing some serious strategic questions for the mobile operators, who need to figure out a way to deliver mobile data more economically and efficiently. Increasingly, the mobile ecosystem is looking toward the fourth generation, or 4G, wireless technologies such as LTE (Long Term Evolution) and WiMAX to help reduce the cost per megabyte, increase efficiency and decrease latency through flat all-IP infrastructure, and provide a rich framework to innovate new applications and services across multiple platforms.

In this report, we will discuss the main drivers behind 4G and take a look at the two main technology contenders. We will also take a look at how broadband impacts consumer behavior and the impact 4G might have on the mobile ecosystem. While there are clearly advantages to providing more bandwidth and better user-experience, we have to also tackle many significant issues over the course of the next few years, namely, backhaul capacity constraints, spectrum allocation, business models and pricing plans, and increased competition from new entrants both from the content and infrastructure side. Only after addressing these issues can we experience the true potential of 4G.

Next: Why 4G?
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