U.S. 4G Investment Could Lead to at Least $73B in Economic Growth
U.S. wireless companies may invest between $$25 billion and $53 billion in 4G networks between 2012 and 2016, according to a study by Deloitte, which could lead to the creation of 371,000 to 771,000 jobs and an increase in gross domestic product of $73 billion to $151 billion.
In a new report, the consulting firm analyzed the potential economic effects of continued investment in 4G network technology, which is likely going to be dominated by LTE in the years ahead.
However, the firm said there are a range of possible outcomes, depending on how much is invested. Deloitte said the $25 billion investment figure assumes a baseline scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G networks extends to the middle of the decade. The firm said that under these conditions, U.S. companies will be vulnerable to losing out to foreign competitors who aggressively deploy 4G networks abroad.
On the other hand, the $53 billion figure at the high end of the invest scale assumes a scenario in which U.S. carriers invest more rapidly in 4G networks, before foreign competitors gain market traction. Deloitte said the demand stimulated by new 4G offerings would justify more network investment and will lead to a "virtuous cycle" of growth and investment.
Deloitte said rapid 4G adoption could help catalyze growth in cloud computing. Additionally, 4G adoption will help minority groups, rural communities and localities with limited access to full broadband connectivity, as well as some small businesses.
Verizon (NYS: VZ) Wireless' LTE network now covers more than half of the U.S. population, and Verizon expects to cover its entire 3G footprint with LTE by the end of 2013. Verizon's LTE deployment is the world's most aggressive, but AT&T (NYS: T) Mobility plans to catch up quickly. AT&T is poised to launch its LTE network later this summer in Atlanta, Chicago, Dallas, Houston and San Antonio. The company expects to deploy LTE across 70 million POPs in 15 markets by year-end, and also plans to complete its LTE deployment by the end of 2013. Part of AT&T's proposed $39 billion acquisition of T-Mobile USA will involve AT&T using T-Mobile's 1700 MHz AWS spectrum to deploy LTE.
Sprint Nextel (NYS: S) , meanwhile, continues to resell Clearwire's (NAS: CLWR) mobile WiMAX service under the Sprint 4G brand in 71 markets. Clearwire's network covers around 130 million POPs.
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