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Deloitte: U.S. Could See $53 Billion in 4G Network Investments by 2016

August 23, 2011

A new Deloitte report says that wireless telecommunications companies in the United States could invest $25 to $53 billion in fourth generation cellular wireless networks (4G) between 2012 and 2016, triggering $73 to $151 billion in gross domestic product growth and creating 371,000 to 771,000 jobs.

Growth may also occur as high-tech companies create new mobile broadband products and services, further changing the way people live, work and learn.

The Deloitte report, “The Impact of 4G Technology on Commercial Interactions, Economic Growth, and U.S. Competitiveness,” investigates the economic dynamics surrounding 4G technology and explains how the U.S. can maintain global leadership in mobile broadband innovation it won during the 3G era.

The $25 billion figure assumes a baseline scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G extends to the middle of the decade. Under these conditions, U.S. firms are vulnerable to incursions by foreign competitors capitalizing on aggressive efforts in their home markets to deploy 4G networks and develop 4G-based devices and services.

The $53 billion assumes a scenario in which U.S. carriers invest more rapidly in 4G networks and start to produce popular 4G-based offerings before global competitors gain traction. In this scenario, the demand stimulated by new offerings justifies more network investment, setting off a virtuous cycle of investment and market response that positions the U.S. to retain its mobile broadband leadership, Deloitte says.

“Investment in such a powerful form of communication contributes to the economic recovery and provides a job-creating engine for the future,” said Phil Asmundson, vice chairman and U.S. media and telecommunications sector leader at Deloitte. “The key to harnessing the potential benefits of 4G technology lies in America’s market-driven wireless sector, which encourages the emergence of innovative applications that spur productivity and could produce the same surge of innovation and demand we experienced during the 3G era.”
According to the report, more than 150 carriers in 60 countries are currently committed to 4G deployments and trials. South Korea, Sweden and China are examples of countries moving rapidly to reap the benefits of 4G technology.

Rapid adoption of cloud computing further enables the U.S. to take full advantage of 4G’s potential impact by allowing developers and entrepreneurs to analyze the market’s response to new applications, content, solutions and business models – cheaper and quicker.

“Cloud computing will allow handheld devices to be more compact and efficient while making them tremendously more useful and powerful,” Asmundson said. “Applications, storage and computing power all can largely reside in the cloud, but only if connectivity is robust, reliable and secure. The benefits of 4G and cloud go beyond the telecom sector. Together, 4G and cloud technologies support the kind of entrepreneurial ecosystem that has made the United States a mobile broadband leader.”

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