Long Term Evolution (LTE) technology is ahead in the race as the most sought after next-generation (4G) wireless network standard in the market. The 4G wireless networks are aiming to cope with substantial demand for high-speed wireless data services and mobile video. LTE is an IP-based modulation standard and a set of enhancement for the existing Universal Mobile Telecommunications System (UMTS). This technology has been pioneered by the 3rd Generation Partnership Project (3GPP), a telecom industry body comprising wireless carriers and equipment vendors who have been buying and selling the same proprietary products for years.
Verizon Communication (VZ), the largest carrier in the U.S., and NTT DoCoMo (DCM), the largest carrier in Japan, are the first two companies to decide on implementing LTE-based networks by 2010. Vodafone (VOD), the largest mobile carrier globally on revenue count, and AT&T (T) will implement LTE by 2012. Recently, China Mobile (CHL), the largest wireless operator globally on subscriber count, has also decided to opt for 4G LTE technology.
LTE offers several advantages over other 4G techniques like WiMAX, Ultra Mobile Broadband (upgrade of CDMA EV-DO) and Multi-input Multi-output (MIMO) Wireless LAN. This includes improvement in spectral efficiency, lower costs, and solid integration with other open wireless standards. These are the compelling reasons influencing the switch to LTE technology.
LTE provides downlink and uplink peak rates of 100 Mbit/s and 50 Mbit/s respectively, with RAN (radio access network) round-trip times of less than 10ms. LTE also supports flexible carrier bandwidth and both FDD (frequency division duplexing) and TDD (time division duplexing) on the same platform. Ability to incrementally increase speed and capacity are the major hallmarks for its acceptability to wireless carriers. Therefore, LTE gear makers like L.M. Ericsson (ERIC), Alcatel-Lucent (ALU), Nokia-Siemens and Huawei Technologies Ltd look to gain substantially from this state-of-the-art technology.
We reiterate Buy for Vodafone, NTT DoCoMo, and China Mobile while continuing to maintain Hold for Verizon, AT&T, L.M. Ericsson and Alcatel-Lucent.
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