Carriers cap LTE services to avoid fixed-line cannibalization, says IEEE's Saracco

Says real significance of LTE is its native IP access, not its bandwidth

Roberto Saracco isn't buying carriers' claims that they need to put caps on their LTE services due to excessive traffic causing massive engineering challenges.

Roberto Saracco isn't buying carriers' claims that they need to put data caps on their LTE services due to excessive traffic causing massive engineering challenges.

Saracco, a senior member of the IEEE and the director of the Telecom Italia Future Centre, said during an interview Tuesday that the major reason carriers are placing data caps on their LTE services is to prevent users from going exclusively with wireless data services and ditching their landline connections.

"You're always going to want to make the maximum amount of value," he said. "And you don't want to have your fixed-line network being cannibalized by mobile."

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Saracco also said that while carriers have been marketing LTE for its bandwidth and download speeds, the real benefit of LTE is that it provides users with a native IP connection, which in the long run will provide cheaper wireless connectivity for users than previous cellular technologies such as HSPA and EV-DO.

This may seem somewhat counterintuitive given that carriers are currently charging a premium for LTE services. Saracco said carriers are able to do this because they've successfully marketed LTE as a game-changer in terms of providing data speeds to smartphones and tablets. However, Saracco said most smartphone users don't require LTE-level data speeds to meet their needs and predicts that consumers will start to pay less for LTE connectivity once more competitors hit the market.

"My feeling is that if you're using a smartphone you're never going to need this kind of [LTE] speed," he said. "It's a different story if you're using a dongle on your laptop and you're downloading a really big file."

The wireless industry has been moving away from all-you-can-eat data plans over the past couple of years and toward tiered service plans that place caps on monthly data consumption. AT&T got the ball rolling in 2010 when it announced it was dropping unlimited data plans for the iPhone in favor of ones that offered between 200MB and 2GB of data consumption per month. Verizon shortly followed by saying it would implement a similar pricing scheme for its 4G LTE services that launched commercially in December 2010, while T-Mobile last year said it would start throttling 3G users down to 2G speeds if they exceeded data consumption caps. Sprint is currently the only mobile carrier that offers users unlimited data plans for smartphones, although the carrier does impose data caps for devices such as tablets that are likely to use greater amounts of data.

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