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LTE Could Boost European Operator Revenues

27 октября 2010

European telecommunications operators could increase consumer revenues by as much as 10 percent, and enterprise revenues by nearly 30 percent as the adoption of LTE technology matures, Alcatel-Lucent said. In part, those expectations seem to grow from anticipated substitution of higher-priced 4G services for slower and less-expensive 3G services.

Improved speed and quicker response time (improved interactivity) were the top two attributes ranked for enhancing quality of experience, across all enterprise segments. However, speed ranked highest for the small-sized enterprises, while improved interactivity was most important for medium- and large-sized enterprises, Alcatel-Lucent  said.

The study of  4,500 consumers and 950 enterprise respondents based in France, Germany and the United Kingdom suggests that more than half of small-sized businesses, and more than three-quarters of medium-sized and large-sized enterprises are interested in signing-up for next generation wireless network access for their employees.  

The findings also indicate that LTE service also impacts customer loyalty. More than half of small-sized businesses, and over 70 percent of medium-sized companies, and over 80 percent of large-sized enterprises report they would change service providers in order to get LTE.

In addition to mobile cloud computing, the surveyed enterprises also expressed a strong interest in signing up for mobile collaboration and multi-party video conferencing.

More than half of consumers surveyed are likely to sign up for LTE, and 40 percent would switch network providers to gain access to the technology. The main perceived benefit for consumers was faster speeds.

Of course, to the extent that 4G services largely cannibalize 3G services, the revenue will be incremental, rather than representing an entirely-new revenue source. A big unknown is how much incremental revenue can be earned by faster 4G connections.

The bigger unknown is where additional new revenue streams can be created, and most observers do not believe most of the increase can come from end user customers, business or consumer. Some call the change a shift from a single-sided to a two-sided business model and that is a reasonable formulation.

Where communications service providers have sold services to end users, other businesses routinely make money partly from end users and partly from business partners. Most media-related businesses provide examples of the approach, where some revenue comes from consumers and some comes from business partners, whether that is advertisers or other business partners. 

Even Alcatel-Lucent's own projections suggest the importance of creating those new revenues, as the amount of bandwidth consumed, and therefore cost, is set to exceed incremental access revenues by quite some measure. 

LTE almost must boost mobile service provider revenue by 10 percent to 30 percent, or there would be scant business rationale to build and operate the networks. The issue is that LTE has to create more revenue at the same time that every service provider is scrambling simply to replace voice revenue that steadily is decreasing, at least in developed markets. 

In some sense, LTE has to replace up to 70 percent of existing voice revenues, while additionally boosting the top line by 10 percent to 30 percent. That would be a tall order for any contestant in any industry. It simply is an imperative for mobile operators.

Источник: TMC Net

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