A new Yankee Group report identifying the early leaders and followers among 4G wireless operators emphasizes that 3G wireless technology and expertise won't automatically lead to 4G dominance.
4G strategies must be different than 3G strategies, targeting a market, a specific solution or a competitive point in order to build brand awareness among users, particularly because almost 75% of users don't know what 4G is and deployments will be spotty for a while.4G strategies must be different than 3G strategies, targeting a market, a specific solution or a competitive differentiator.
Early 4G Leaders and Followers report
Addressing the three 4G technologies -- Long-Term Evolution (LTE), WiMAX and Evolved High-Speed Packet Access (HSPA+) -- Yankee said LTE and HSPA+ will win the market by 2011, even though WiMAX was rolled out earlier. Still, the report cites WiMAX as a strong machine-to-machine (M2M) services and smart grid technology contender, and a fixed broadband technology especially in developing countries.
Yankee Distinguished Research Fellow Chris Nicoll drew his conclusions from a combination of Yankee Group consumer surveys, vendor discussions and Rethink Technology surveys of nearly 200 operators worldwide. The report categorizes operators into leaders, followers and those "on the bubble," depending on their business decisions and execution in the next six-to-12 months.
Yankee's picks for early 4G leadership in three global areas are as follows:
- Asia-Pacific: Japan's KDDI and South Korea's KT -- for their WiMAX and LTE deployments.
- U.S.: Clearwire for its WiMAX rollout, MetroPCS for LTE and T-Mobile for HSPA+.
- Europe: TeliaSonera.
So where's Verizon Wireless? Nicoll ranks Verizon Wireless in his "on the bubble" category because it is lagging the leaders in its 4G LTE deployment, even though it has announced an aggressive rollout plan for the rest of this year. Nicoll sees Verizon moving into a leadership position in the U.S. by the end of 2011, however, even though it will trail Clearwire until 2012. Joining Verizon "on the bubble" are Sprint, LightSquared, China Mobile and Telefonica.
Landing in the dreaded "followers" category, where Yankee sends operators that are slower to develop 4G strategies or have had challenges integrating past technology decisions, are AT&T, Telenor and Vodafone.
Addressing the marketing challenge for 4G wireless operators
Customer awareness will be one of the major challenges for 4G wireless operators in 2011, Nicoll said, because they need to figure out how to position their 4G networks against their own 3G networks,as well as against competitors. In the early days, differentiation will likely be recognized through 4G devices wireless (including data cards and dongles), but the lines will blur as more 4G handsets hit the market.
Operators need to get beyond the speed and price discussion with customers and market the "experience" enabled by 3G and 4G, historically a difficult jump. Operators that tie their marketing messages to third-party services will see the most improvement, Nicoll said, and average revenue per user will improve due to the ability to charge add-on rates for services like mobile TV.
To move the 4G business model along, Yankee suggests that operators focus their early 4G services on a specific market solution or a point of competitive differentiation to create a specific identity with customers. Backing up Yankee's point, some wireless operators have already started building 4G solutions for vertical markets like health care or manufacturing.
HSPA+ technology positioned for a few great years
Another confusing 4G issue for customers is that operators have three different technology options: HSPA+, LTE and WiMAX. Customers don't know the difference, much less whether there is any device portability among them.
HSPA+ will be a viable alternative to LTE for the next few years, according to Yankee. HSPA+ is already operational in almost 30 European networks that report speeds of up to 21 Mbps. LTE's 40-50 Mbps speeds in Sweden easily surpass that, but HSPA+ beats some LTE test speeds (like Verizon's Boston 700 MHz test, with unofficial speeds of about 8.5 Mbps), the report said.