Deloitte: U.S. Could See $53 Billion in 4G Network
Investments by 2016, Creating 771,000 New Jobs
Aug. 22, 2011
New 4G products and services could drive additional growth
NEW YORK, - A new Deloitte report states 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. Additional growth could
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 the global leadership position 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 figure 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.
"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, Deloitte LLP. "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."
Global Competition Should Spur U.S. Innovation and Investment
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.
Cloud Computing Accelerating 4G Capabilities
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
The advent of high-performance wireless capacity, coupled with cloud
infrastructure and other advances, is proliferating new offerings and
capabilities that exceed what has been possible with 3G technology, the
report notes. In addition to consumers, a variety of U.S. end-user
industries, including nonprofit and government entities, are likely to
use devices and services incorporating the capabilities of 4G technology
to better serve their customers, patients, clients and students. This
includes applications such as augmented reality for businesses,
machine-to-machine technology involving the use of sensors and actuators
and the development of smart highways.
4G Enabling Marginalized Groups
Deloitte's report indicates that the deployment of 4G mobile broadband
has special implications for certain disadvantaged markets including
minority groups, rural communities and localities with limited access to
full broadband connectivity, and some small businesses. The report
explains how equipping these marginalized groups with 4G access helps
move them further into the nation's economic mainstream, thereby serving
the public interest while boosting U.S. competitiveness.
Lessons from the 3G Revolution
Deloitte's analysis emphasizes that America's success in 3G was driven
by entrepreneurial innovation. When the government auctioned large
amounts of spectrum, removed spectrum caps limiting individual carriers'
spectrum holdings and permitted market forces to operate, private
enterprise pursued new opportunities and a robust 3G ecosystem was born.
The FCC is moving to expand spectrum supply through a new incentive
auction, but the report indicates that it will be difficult to keep pace
with projected demand. Accordingly, there is a continuing need to find
additional ways to make better use of available spectrum and to unlock