Smartphones Fueling 4G Wireless RevenuesSmartphones Fueling 4G Wireless Revenues

Just as a rising tide will lift all boats, rising worldwide installations of LTE are expected to lift backhaul revenue.

In fact, backhaul revenue is likely to double over the next 30 months as carriers deploy LTE infrastructure, according to a new report from ABI Research.

Announced Wednesday, the report states that the backhaul growth curve will likely accelerate even more after 2012, resulting in a fivefold revenue increase between 2009 and 2014.

Blame much of the surge in the growing use of smartphones.

"AT&T Mobility has found that one iPhone user typically generates as much data traffic as 30 basic feature phone users," ABI senior analyst Nadine Manjaro said. "Wireless network traffic will dramatically increase as iPhone-like devices become the norm and laptop PC card usage increases."

The market research firm expects capital expenditure on microwave backhaul to exceed $8.5 billion this year.

LTE infrastructure is spreading throughout the world. In the United States, Verizon Wireless is spearheading the ultra-high-speed wireless technology as it expects two initial rollouts to be established late this year in anticipation of widespread commercial deployment next year.

Traditional wireless infrastructure suppliers, which have been under profit and sales pressure in recent years, are likely to get a shot in the arm from the spread of LTE. ABI said backhaul equipment vendors likely to benefit from LTE deployments include Alcatel-Lucent, Dragon Wave, Ericsson, Harris Stratex, and Nokia Siemens Networks. In addition, companies like AT&T, BT, Embarq, and Verizon Communications are poised to develop new revenue streams by providing leased backhaul services.

"We have observed a movement toward backhaul as a managed service," said Manjaro. "This enables mobile operators to focus on their core business while guaranteeing a backhaul capacity matched to their changing traffic demands."

LTE Vs. WiMax won't be the typical winner-take-all showdown. Learn what each brings to the race (registration required).