Important Implications of Alltel's Choosing LTE

(Business News & Technology News, 20 May 2008)

Alltel Corp. recently joined a growing number of mobile operators in committing itself to LTE as its 4G technology of choice. Verizon Wireless and AT&T Mobility, T-Mobile, China Mobile, KDDI and Vodafone have also announced LTE plans. While Alltel executives cautioned that no budget had yet been allocated for the new network's deployment, and forecast a three-five year timeframe for its introduction, the announcement will be seen as another vote of confidence in LTE.

While not one of the big four US carriers, Alltel (it is the fifth largest with over 13 million subscribers) has the largest network area which includes coverage in 34 states as well as parts of Canada and Mexico. Even more notable, it has roaming agreements with CDMA-based operators in the United States and Canada, some of which include EV-DO.

So what does its LTE choice mean?

"It is no surprise that Alltel chose LTE as its 4G technology, since the carrier usually mirrors choices made by Verizon Wireless," says Nadine Manjaro, senior analyst at ABI Research. "Alltel's choice of LTE will help to ensure greater rural coverage for small and mid-sized cities in the United States and Canada since the carrier already has data roaming agreements in place. This will complement other mobile operators' initial LTE buildouts in major urban areas. Alltel's choice of LTE also confirms ABI Research's recent pessimistic assessment of UMB's future."

Alltel's realistic timing for its LTE buildout is dictated by both financial constraints and LTE's level of maturity. The company's timetable for significant rollouts fits with others' deployments.

"This announcement provides a clear picture as to what network coverage will look like in North America in the long term," adds principal analyst Philip Solis. "For the next five years we will see 802.16e mobile WiMAX pick up steam, with LTE right behind it. In five to ten years, LTE will surpass mobile WiMAX in subscribers, and IMT-Advanced-compliant networks will arise from upgrades to 802.16m mobile WiMAX and LTE-Advanced. Mobile WiMAX will remain a competitive secondary air interface, but LTE will be the primary 4G network technology since all the top carriers in the United States except Sprint are supporting it. The more granular near-term picture of how 4G will play out is critical for all companies across the mobile wireless ecosystem which need to start planning for chipsets, devices, network equipment, and services."

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