UK 4G not economically viable until 2015

New research suggests operators will be sweating their existing assets for some time yet

It will not be economically viable to upgrade current UK mobile broadband networks to address traffic demands and improve user experience until 2015, according to global researcher Informa Telecoms & Media.

It suggests that if current HSPA 3G networks were upgraded they would be sufficient to cope with traffic demands in the medium term, and as a result large-scale LTE networks (4G) do not make financial sense for mobile broadband providers.

"Even though there is growing demand for mobile data by smartphones and USB modems, current UK mobile network deployments [HSPA] are so dense that it would make the introduction of LTE both an investment-heavy and somewhat unjustifiable decision," said Dimitris Mavrakis, a senior analyst for Informa.

Informa estimates that a new LTE deployment will cost at least an additional £37m, compared to upgrading the existing networks, if deployment were to begin in 2013.

"This additional cost excludes what would be paid for spectrum, and in reality is much higher," added Mavrakis.

Ofcom announced last month that the auction for 4G spectrum will begin in the first quarter of 2012, with the process of release to be completed by the end of 2013. The auction will release the crucial 800MHz and 2.6GHz blocks of spectrum required for next-generation mobile broadband.

"Mobile operators are still paying for 3G networks and in some cases the 3G spectrum licences, which was billions of pounds," said Mavrakis.

"They are just starting to make money out of 3G, and 4G is starting to be pushed already. The equipment is yet to mature and it is not viable to deploy the LTE networks yet."