Mobile Data, the Next Generation: High Speeds but at What Cost?

The next great leap forward in wireless broadband networks, a superfast technology called Long Term Evolution (LTE), is being hailed as a breakthrough that will transform the world's mobile operators into the lucrative gatekeepers of the on-the-go Internet. But despite its theoretical potential to redefine the online experience -- with download speeds many times faster than currently available -- many of the world's major carriers are holding back.

They are wary of repeating the mistakes of a decade ago, when billions were spent on equipment and licenses for third-generation networks, the current standard, only to see consumers largely ignore the technology until Apple introduced the iPhone in 2007. "Despite the benefits of the technology, many are wondering whether LTE will be a sustainable business," said Paul Gainham, director of service provider marketing at Juniper Networks, a maker of network routers and switches. The problems start with the cost of new networks, which range from the hundreds of millions to the billions. Aircom International, a London research firm, estimated a U.S. operator would pay up to $1.8 billion for LTE -- in the first year alone. A European operator faces $880 million in costs. There are also concerns over whether the network would deliver service that is that much better than that available, despite the potential speed. Some of the latest 3G networks, using a technology called HSPA+, can already deliver download speeds of up to 21 megabits a second, a vast improvement over the 2 to 3 megabits a second available in most home Internet connections, although not the 250 to 500 times LTE promises.