When the guys at iFixit found the 4G LTE components built into the Nexus 4 there were a lot of speculations but LG is here to clear things up. According to their spokesperson, LG felt it was right that they confirm what we are all suspecting as to why the Nexus 4 has the chips required to make 4G possible but not the full package.
Here is the reason according to their interview with techrader:
And if you were wondering if a software update could enable the 4G capabilities, they were not shy to squash that dream."In order to provide the best possible specification for Nexus 4, LG utilized the same powerful Qualcomm Snapdragon chipset as can be found in its 4G LTE product, namely LG Optimus G. This powerful chipset is only available with a combined processor and modem and cannot be implemented separately.”
There you have it folks, from speculations to confirmation in a week."The modem contains 4G LTE capabilities but is only effective when combined with other essential hardware parts such as a signal amplifier and filter in order for it to work. It therefore cannot be upgraded to 4G LTE capability through software.