Analyst: HSPA+ to become the 3G norm in five years

High-speed packet access plus (HSPA+) won’t just be option for operators looking to compete with new long-term evolution networks, according to ABI Research. The firm believes it will become the 3G norm by 2015, estimating that 75% of all UMTS base stations will sport the HSPA+ upgrade.

In the US, T-Mobile (NYSE:DT) and AT&T (NYSE:T) are both completing the upgrade to HSPA+, joining a handful of other global operators in building 3G networks supporting theoretical speeds as high as 21 Mb/s. ABI forecasting vice president Jake Saunders said many other operators will follow suite in the next two years, making HSPA+ 11% of all wireless infrastructure spending in 2012. While that may seem low, the first iteration of HSPA+ is primarily a software upgrade, making it much less capital intensive than building a new LTE network. For instance AT&T has said it can complete the upgrade across its entire network for a mere $10 million.

ABI said that many of those upgrades will be conducted by operators in the developed world who are either thinking pragmatically about their current networks or have no 4G spectrum, but much of the HSPA+ activity will be in the developing world, much of which is just now bringing its 3G infrastructure online. “4G equipment spending will be very much welcomed,” ABI practice director Aditya Kaul said in a statement. “But vendors are also targeting the remaining emerging market for 3G, and also securing 3.5G framework agreements. That should improve vendor earnings in the latter half of 2010.”

The costs incurred by each operator, though, may differ depending on the age of their equipment. Operators that launched 3G early, for instance, deployed equipment before the HSPA+ standard was passed. And while it is still possible for them to perform the upgrade, their equipment many not be ‘HSPA+ ready’ as new gear such is.

NTT DoCoMo (NYSE:DCM), for instance, was the first operator to launch a UMTS network globally, beating most operators to the market by years. Given the likely high costs of upgrading its now-decade old 3G network to HSPA+, it’s probably no coincidence that it has been very aggressive with LTE. Meanwhile T-Mobile USA has one of the world’s newest LTE networks, which allowed it to launch immediately with 7.2 Mb/s and quickly jump to HSPA+.