Strategy Analytics: HSPA+ and LTE Investment Key to Operator Profitability

BOSTON -- (BUSINESS WIRE) -- In its latest Wireless Operator Strategies (WOS) report, “Outlook & Forecast: How HSPA+ and LTE Investments will save Mobile Operator Profits,” Strategy Analytics projects the impact of HSPA+ and LTE investments on operator margins through 2016. Successful operators will be those who accelerate investment in next generation infrastructure in response to the dramatic growth in Broadband data demand. The race is on to reduce cost per Gigabyte (GB) to match the rate at which revenue per GB is falling. Operators who invest early in next generation HSPA+ and LTE infrastructure will see improvements in gross margins after 2014.

Strategy Analytics predicts the impact of these new technologies on operator gross margins, and summarizes the impact of traffic growth that leads to significantly lower revenue per GB. This is compared to cost per GB to project gross margins through 2016. The challenge is to offset the decline in revenue per GB with lower cost HSPA+ and LTE, due to:

• Higher speeds
• Spectral efficiency
• WiFi offload
• Policy control
• Media optimization
• Small cells
• Backhaul
• All-IP architecture.

The report provides five-year projections, by region, for:

• Daily traffic
• New capacity requirements
• Subscribers by Technology – Pre-2.5G, 2.5 & 3G, HSPA+, LTE
• CAPEX and TCO per GB
• Revenues
• Gross Margins

Sue Rudd, Director, Service Provider Analysis, noted, “This detailed report provides a sound foundation for operators who are evaluating their investment and deployment schedules for HSPA+ and LTE. Accelerated deployment is the key to profitability as the data ‘tsunami’ peaks in 2014.”

Phil Kendall, Director Wireless Operator Strategies, added, “In our September report Strategy Analytics noted that the upturn in wireless CAPEX is helping to lift results of the leading players. Today’s report indicates that operators will enhance their margins as they fund Capital Expenditures (CAPEX) for HSPA+ or LTE over the next few years.”

About Strategy Analytics

Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in the areas of Mobile & Wireless. The company is headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China. http://www.strategyanalytics.com/