4G LTE is poised to become the leading source of wireless infrastructure spending by 2013. In a recent study by the analyst group HIS iSuppli, global capital spending on LTE technology is expected to reach $24.3 billion by 2013, nearly tripling the estimated $8.7 billion that is to be spent in 2012. This increased growth in LTE infrastructure spending is fueled by the large number of mobile network operators who are deploying 4G LTE networks worldwide. Within the US, the largest 4G LTE carriers include Verizon, AT&T and Sprint. Globally, the number of 4G LTE carriers has expanded from 160 in 2010 to around 200 in 2012.

Increased customer demand for LTE equipment will help the market to grow by over 45 percent over the next 5 years. Affordable smartphones and the innovation in the app community open up new markets in both developed and developing economies. This opening allows carriers to invest in 4G LTE infrastructure to accommodate the rising demand for data consumption via smartphones.

IHS director Jagdish Rebello stated in the released report that “while 3.5G remains the dominant air interface technology in the mobile infrastructure market, the 4G LTE space has been gaining momentum. This trend started in the second half of 2009 when some wireless operators in Europe, North America, Japan and South Korea started to deploy LTE technology…And such widespread support will drive carrier spending on LTE to surpass 3.5G by next year.” The domination of wireless infrastructure budgets by 4G LTE in 2013 is all but a reality.

Verizon Wireless’ reliable wireless network has been tested this past month with two consecutive outages on its new 4G LTE network. The newest outage occurred on Wednesday morning of this week with customers affected across the nation. By midmorning, the company stated that normal service has bee restored. The other previous outage had occurred on Dec 6^th and Verizon had taken a day and a half to resolve the problem. Though it is not an uncommon occurrence for wireless carriers to have connectivity problems, to have it happen to the largest wireless carrier in the nation is notable.

“The big attraction for Verizon is its network superiority,” said Roger Entner, founder of the market research firm Recon Analytics. “People pay a premium for this superiority. But if that goes away, they are merely expensive.” Verizon primarily differentiates itself from its competitors like AT&T by touting its network reliability. Its network has won numerous awards from consumer groups. J.D Power and Associates had named Verizon’s LTE network the most reliable network in the nation this August.

Verizon has not yet offered any concrete explanations as to why the 4G LTE network was experiencing difficulties. Market analysts point to the fact that Verizon is the first major wireless operator in the world to deploy the 4G LTE technology on such a large scale. As a result, it is inevitable that the company experience some of the electrical difficulties that are associated with a first time enterprise.

“When you are the first carrier in the world to really deploy LTE in any significant scale, there are going to be issues,” Entner said. “Verizon has no one else to look to, to learn the painful lessons of deploying this network. The issues they’re experiencing are likely growing pains. And they’re to be expected.”

Verizon’s quick expansion and its growing number of customers on the network might be what contributed to the network outages. But as long as outages like this remain outliers on Verizon’s network, the company’s established reputation as a reliable and fast wireless connection should not be affected overmuch.

LightSquared and Quantum Networks have signed a new wholesale network agreement that allows Quantum to bundle 4G wireless connectivity with its products. LightSquared, a wholesale carrier that plans to build a nationwide wireless broadband network and Quantum, a global leader in wireless solutions, are both thrilled by this mutually beneficial agreement. The deal allows Quantum to become a “one-stop-shop” by bundling connectivity with its retail devices to offer their customers access to reliable wireless broadband services.

By offering 4G connectivity as a wholesale service, LightSquared also allows its partner, Quantum to take advantage of a new access to wireless broadband service and offer services beyond the traditional offerings.

In a statement, Ari Zoldan, CEO of Quantum, said, “”With LightSquared, we can now go the final mile and deliver the most advanced wireless services to our customers.” He added, “Before, we were only able to meet customers halfway while they scrambled for reliable connectivity. Now we can offer a complete communications solution while also maximizing our revenue opportunity.”

Quantum is part of a growing number of companies who are looking to tap into LightSquared advanced 4G network. Quantum just became LightSquared’s 33^rd wholesale customer among other wireless carriers, device manufacturers and mobile content providers. Executives at both companies hope that the new partnership is one that opens up new revenue streams and fosters entrepreneurship and competition within the U.S wireless market.

LightSquared has expressed outrage at a leaked government report over the findings of GPS interference tests that were concluded last week. The report, that was leaked by Bloomberg News, stated that the tests had shown that LightSquared’s LTE network would interfere with 75 percent of GPS devices tested. LightSquared has retaliated by issuing a statement that confirms that the report was based on selective data and reflected power levels 32 times higher than LightSquared actually plans to use.

“It is apparent that this leak was intended to damage LightSquared’s reputation, spread false information in the marketplace, and prejudice public opinion against LightSquared” before a full analysis of the rest results is presented to the FCC (Federal Communications Commission) and other key agencies, LightSquared CEO Sanjiv Ahuja said in a letter to the co-chairs of the National Executive Committee for Space-based PNT. He asked for a public statement to clarify the information and an investigation into the circumstances of the leak.

The company believes that the FCC will make a decision in their favor sometime in the first quarter of next year. Last month, the National Coordination Office for Space-Based Positioning, Navigation, and Timing (PNT) oversaw the second set of tests to determine the danger of interference. The PNT will then report its conclusions to the FCC. LightSquared also contends that only 14 of the 93 GPS receivers tested were affected by the LTE network. LightSquared’s network is scheduled to undergo another round of testing in January, after which the FCC will make a final decision on the proposed LTE network.

Verizon Wireless is expanding its cache of expensive smartphones, all of which are priced at $299 with a two- year contract. The company hopes that customers will be drawn to Verizon because of its reputation for high- speed mobile connectivity and network quality. The latest phone to released from Verizon in this price range is Samsung’s Galaxy Nexus. Verizon is to start selling the device before the end of this month for $299.99 with the two-year contract, following the similar releases of the HTC Rezound and the Droid RAZR.

The increased cost of these phones with Verizon is helping the company to create a specific high-cost niche for itself. While most other carriers have slashed prices and even offered phones online at no cost, Verizon continues to offer a variety of smartphones priced significantly higher than phones at most other carriers like AT&T and Sprint Nextel.

“It used to be that $199 was the top of the heap, the most you were going to pay,” said Charles Golvin, a Forrester Research analyst. “Verizon clearly believes that with their 4G network coverage and reputation they can appeal to a segment that will pay a little more for the latest and greatest.”

The strategy allows Verizon to pay a lower subsidy, which is the difference in price that Verizon pays manufacturers from what customers pay for a phone with a contract. Samsung’s Galaxy Nexus is extremely anticipated by Verizon customers. Developed in conjunction with Google’s Ice Cream Sandwich Android platform, the Galaxy Nexus is also important for Samsung as it hopes to displace HTC as the US’ top smartphone seller. With Verizon’s 4G LTE service that guarantees high download speeds, customers will be more enticed by phones like the Galaxy Nexus which have more features like larger screens and faster processors. The promise of high-speed connectivity coupled with an advanced smartphone is what Verizon hopes will entice its customers to pay $299 for their mobile devices with contracts.

As Verizon celebrated the first anniversary of its 4G LTE network yesterday, it also confirmed the increase in its spectrum purchases. The company continued to invest in additional spectrum and exchanged spectrum licenses with Leap Wireless for $200 million. Under the terms of the deal, Leap will purchase 12 MHz of spectrum in Chicago from Verizon for $204 million. In turn, Verizon will buy spectrum from Leap for $188 million in a number of U.S markets. The deal is seen as a financial boost for Leap.

“Together, these transactions will allow us to strengthen our spectrum position in our Chicago market and receive net cash proceeds of more than $100 million, after repayment of indebtedness and estimated transaction fees,” Doug Hutcheson, Leap’s president and chief executive officer, said in a statement.

“We plan to use the net cash proceeds to support our ongoing deployment of LTE network technology,” Hutcheson said. “As we have previously announced, we plan to cover approximately two-thirds of our current network footprint with LTE technology over the next two to three years.”

Verizon, with this deal, primarily looks to gain additional spectrum across the country with the expansion of its LTE network. The deal comes only days after Verizon concluded payments with three of the country’s top cable companies of $3.6 billion for 122 spectrum licenses. Under the terms of the deal, Comcast was given $2.3 billion, Time Warner given $1.1 billion and Bright House $189 million for the additional spectrum. The extra spectrum is vital for Verizon as increased numbers of users switch to data- intensive devices such as smartphones and tablets. Verizon’s 4G LTE network has enjoyed success and has wide reach across the nation, covering 198 markets. The additional spectrum will help extend Verizon’s dominance of the LTE market, especially as rivals like AT&T are still embroiled in legal battles regarding its merger with T- Mobile.

Sprint Nextel may soon be forced to let go of its highly popular unlimited data services because of its extended LTE upgrade. The company offers unlimited data services for a flat fee, but this generous offer might have to be abandoned as its LTE upgrade will only have half the wireless airwaves that its larger rivals Verizon Wireless and AT&T have for their LTE networks. Because Sprint’s data plan is so popular, the large number of users coupled with the shortage of wireless airwaves could put a heavy strain on the network and slow down Web surfing speeds.

Sprint has assigned 10 mHz of spectrum for the LTE lauch in comparison with the 20 mHz that its rivals have for their LTE networks. To expand its capacity, Sprint will most likely have to reassign airwaves being used for other services. Unlike Verizon and AT&T, who cap their data use to prevent overcapacity issues; Sprint remains the only national carrier to offer unlimited data to users for smartphones, including the iPhone on its network. The unlimited data plan is an important part of Sprint’s marketing strategy, as the company has struggled for years to retain customers. A viable option to keep this advantage would be for Sprint to institute higher caps on data usage than those used by its rivals.

Sprint, on the other hand responds to these concerns about the capacity of its LTE network by emphasizing that advanced technology will allow it to make the best use of its spectrum resources. Bob Azzi, a Sprint executive, told reporters that the company plans to retain its unlimited data service throughout the LTE rollout. Azzi also pointed out that Sprint was in the process of concluding an agreement with Clearwire Corp. that would help it to expand its LTE capacity. However, Sprint has already begun shifting away from unlimited offerings. Beginning December, Sprint stated that mobile broadband devices such as tablets, mobile hotspots and netbooks would no longer have access to Clearwire’s mobile WiMAX network.  These plans do not yet apply to smartphones and it remains to be seen if Sprint’s LTE rollout will allow it to keep the unlimited data plan for long.

Data from Juniper Research forecasts a rapid increase in LTE broadband technology within the next five years. Subscriber levels are to reach 428 million by 2016, but will only account for six percent of the global population, as the uptake will be limited to a number of large cities and only in certain countries. The majority of this growth is expected to occur from 2012 onwards, as various mobile operators are gearing up to realize their roll out targets for the LTE network. The research also points out that the rate of LTE network commitments was significantly higher as network vendors have jockeyed each other to offer products and solutions to network operators.

LTE is also expected to be dominated by consumer subscribers from 2013 onwards and will soon overtake business subscribers to LTE. This growth is fueled by the embedded LTE technology within mobile devices and the improved data speeds and service guarantees that are offered with the LTE network. LTE smartphones and tablets will come to dominate the user device market and will account for 50% of total LTE subscribers by 2016. LTE smartphones are expected to achieve the most notable early market traction in the business market, with consumers following suit as devices and network costs become more affordable.

Rumors of the possibility of bringing LTE to the iPhone and the iPad were fanned when Qualcomm’s next- generation mobile device modem chips were released. Qualcomm announced on Wednesday that updated chips with integrated LTE and 3G support will offer greater power efficiency for mobile devices, a specific consideration that has kept Apple from extending compatibility to high speed LTE networks so far. As Qualcomm is the company that produces the baseband chips for Apple in its current designs of the iPhone 4, iPhone 4S and the iPad2, the new chip should open an easy upgrade path to LTE for Apple in 2012.

The chip, called the 4G LTE Gobi 4000 chip, is designed to “give customers an uncompromised mobile connectivity experience, both in terms of download speeds and flexibility,” according to Cristiano Amon, the senior vice president of product management at Qualcomm.  Apple was not specifically mentioned in the press release, though the company did note that the chip was perfect for personal computing and tablet and e- reader operating systems.

The chip is slated to be available in the first quarter of 2012, which could make Apple’s next generation iPad the first mobile device to incorporate it. Apple’s qualms about incorporating LTE into its devices seem to have been addressed with the new chip. The chip’s improvements in LTE speed without causing additional battery problems are an integrated solution to the problem. Though Apple has not yet released any specifics on the new iPad 3, it is expected that Apple may make the jump to 4G LTE with the iPad 3 next year.

Verizon Wireless’s new 4G data plan promotion for LTE smartphones is meant both to promote 4G hardware as well as to reduce congestion on the company’s 3G EV-DO network. Under the current terms of the offer, customers can pay the regular price for an LTE- friendly data plan and Verizon will give them double the data allotment without any additional charges. Speaking at an investor’s conference on Wednesday, Verizon Communications CFO Fran Shammo said that the promotion, which is set to run through the holidays, is “beneficial from a financial standpoint” particularly to save exorbitant expenditures to add capacity to the EV- DO network.  Apple’s iPhone, which is a success for Verizon puts capacity pressure on the company’s EV-DO network. In order to maintain the quality of the network and its experience, some of the pressure from that network has to be relieved. Verizon’s new offer in essence entices customers with a Droid handset on 3G to move onto one on 4G, thus reducing the strain on the 3G network and making it unnecessary to add more capacity to it.

The promotion is timed to coincide with the launch of the LTE capable Motorola Mobility Droid RAZR, the Samsung Galaxy Nexus and the HTC Rezound, which are also LTE Android phones. Shammo also stated that the “theory behind this was to entice the users to move to the 4G to free up the capacity for the iPhone.” The offer also possibly is a way to rival AT&T, which just launched its first two LTE smartphones- the HTC Vivid and the Samsung S II Skyrocket. Verizon intends to accelerate its LTE deployment as much as possible so that the customer experience on the new network is at the 4G network and does not continue to fluctuate between the 3G and 4G network as it has so far. The expense benefits, operating benefits and the efficiency of the 4G network make it a much more attractive option for Verizon to continue investing in.