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Global Status: LTE deployments gain ground

March 29, 2013

The uptake of long term evolution (LTE) technology has grown significantly since its initial deployment by TeliaSonera in Sweden in December 2009. According to analytics firm iSuppli, the number of subscribers opting for LTE-based services increased from 612,000 in 2010 to 13.2 million in 2011 and reached 92.3 million in 2012. As per the Global mobile Suppliers Association (GSA), 97 commercial LTE networks were launched last year and 145 commercial LTE networks were operational in 66 countries as of January 2013. Further, 381 operators have invested in LTE networks in 114 countries, including 330 operator commitments in 104 countries and 51 pre-commitment trials in 10 other countries.

In the third quarter of 2012, North America accounted for 51 per cent of the LTE subscriptions, followed by Asia-Pacific (44.6 per cent), Europe (4.2 per cent) and the rest of the world (0.2 per cent). The 1800 MHz band is mostly used for 4G/LTE deployments globally, accounting for 40 per cent of the commercially launched networks.

The operator focus on LTE is being spurred by the increasing demand for faster content delivery, as well as feature-rich applications and mobile services such as social networking and online videos. As per market estimates, online videos constitute 25 per cent of the total smartphone traffic and 40 per cent of the total tablet traffic.

The growth in LTE networks can also be attributed to the increasing demand for smartphones. This is because smartphones, as compared to other mobile devices, are able to leverage the fast data connectivity provided by LTE while ensuring low latency and always-on mobile broadband connectivity.

As per GSA estimates, multiband, multimode LTE dongles and customer premises equipment are commercially available from all major chipset and device manufacturers. As of November 2012, 560 LTE products (including both frequency division duplex [FDD] and time division duplex [TDD]) were launched by 83 manufacturers, a threefold increase in the number of devices available in 2011. This included 184 routers/personal hotspots, 151 smartphones, 97 dongles, 53 modules, 50 tablets, 19 notebooks, 3 PC cards and 3 femtocells. Going forward, over 200 commercial LTE networks will be launched in 75 countries by end-2013.

LTE is expected to become a mainstream technology platform, providing operators with adequate network capacity, enhancing data throughput and ensuring low latency. It will also support existing and new services as well as applications requiring higher levels of capability. According to Strategy Analytics, global LTE smartphone shipments are expected to triple from 90.9 million units in 2012 to 275 million in 2013. This growth will be driven largely by the markets in the US, the UK, Japan, China and South Korea. The key vendors in the LTE smartphone market will include Apple, Samsung, LG, Nokia, HTC, Motorola, BlackBerry, Huawei, ZTE and Pantech.

 Region-wise LTE deployment

North America

According to Ericsson’s Mobility Report, the North American market has witnessed a rapid growth in LTE uptake owing to intense competition following the foray of CDMA operators into this space. LTE was launched in this market on September 21, 2010 in Las Vegas by regional carrier MetroPCS. The company offered the Samsung Craft device as part of its service bundle. LTE deployments were then extended to Dallas, Detroit, Boston, Sacramento and New York. MetroPCS registered 500,000 LTE subscriptions at the end of the first quarter of 2012. This was followed by Verizon’s commercial LTE deployments in the 700 MHz band in December 2010. So far, 19 commercial LTE networks have been launched by various operators including Bell Mobility and Rogers Wireless in Canada, and AT&T, MetroPCS, Sprint and Verizon in the US.

According to 4G Americas, LTE subscriptions in North America stood at 22.3 million as of December 2012. Going forward, over 200 million LTE connections are expected by 2017.

 Latin America

The adoption of mobile broadband has fuelled the demand for LTE technology in the region, with the majority of operators planning to launch 4G services soon.

Meanwhile, 13 commercial LTE networks have been established in Antigua and Barbuda, Bolivia, Brazil, Colombia, the Dominican Republic, Mexico, Paraguay, Puerto Rico and Uruguay. As per 4G Americas, the number of LTE subscriptions stood at 93,000 as of 2012, which is expected to increase to 2 million at the end of 2013.

However, this market is dominated by GSM/EDGE subscribers. Going forward, the increase in the user base will be driven by economic development and consumer demand. Though the market is likely to be dominated by WCDMA/HSPA services in 2018, it will still witness a significant demand for GSM/EDGE-only services.

 Europe

LTE deployment has witnessed slower uptake in Europe as compared to the US and Asia-Pacific markets. This is largely owing to regulatory issues, a fragmented spectrum landscape and widespread deployment of HSPA and fixed line networks. TeliaSonera launched the first LTE network in Sweden in December 2009, but as of end-2012, the country had registered less than 10,000 subscriptions. This sluggish growth was due to the availability of USB dongles and Mi-Fi units, which were priced higher than 3G. Nevertheless, LTE uptake is expected to pick up and is expected to account for about 30 per cent of the active subscriber base by 2018.

 Asia-Pacific

In the fourth quarter of 2012, the number of LTE subscriptions in the Asia-Pacific market stood at 34.6 million, a 60.92 per cent increase as compared to the previous quarter. SK Telecom, the largest operator in terms of subscriptions, had an LTE subscriber base of 7 million in 2012 and aims to secure 13 million by end-2013.

Going forward, the number of LTE subscribers is expected to increase rapidly to reach 72.1 million in 2013.

 The Middle East and Africa

LTE was initially launched in Africa by Movicel and MTC. Thereafter, Mauritius’ second largest mobile operator Emtel launched its commercial LTE service in May 2012. This was followed by Smile Communications in Tanzania, which launched the service in June 2012.

Going forward, Africa will continue to witness higher LTE uptake. According to Informa Telecoms & Media, the number of LTE subscribers is expected to increase to about 40 million by end-2017.

The LTE subscriber base is growing rapidly in the Middle East as well. According to the GSA’s Evolution to LTE report, operators in Bahrain, Oman, Saudi Arabia and the UAE launched seven LTE networks in 2012, with Saudi Arabia leading with three networks. Last year, Zain Kuwait rolled out its LTE network as a part of the eight committed LTE networks across Bahrain, Jordan, Kuwait, Lebanon and Oman.

According to a report issued by Signals and Systems Telecom, about 7.5 million subscribers in the Middle East are expected to adopt LTE services by end-2015. Saudi Arabia will account for more than 5.4 million LTE subscriptions by 2015.

So far, all three major incumbents in Saudi Arabia – Mobily, STC and Zain KSA – have launched LTE services commercially. These companies have also chalked out expansion plans for the next year. In mid-2012, Zain KSA announced the deployment of LTE networks in Riyadh and other cities in the eight countries it serves across North Africa and the Middle East.

 Challenges in deployment

The biggest challenge faced in rolling out LTE networks is the issue of spectrum fragmentation. While the majority of LTE roll-outs are in the 2600 MHz band, North America is deploying LTE in the 700/800 MHz and 1700/1900 MHz bands, and Asia-Pacific is using the 1800/2600 MHz band. Europe is focusing on the 800 MHz and 2600 MHz bands and deployments in the 1800 MHz band are expected soon. While the vast majority of LTE roll-outs so far were FDD based, LTE roll-outs using TDD spectrum have been undertaken in countries including Poland and Saudi Arabia. The provision of voice-over-LTE and roaming-on-LTE networks and the non-availability of affordable smartphones are other challenges.

 Conclusion

Going forward, LTE deployments are expected to witness an upswing, with global 4G connections likely to surpass 500 million within four years. According to a recent survey by Informa Telecoms & Media, about 60 per cent of operators plan to launch 4G services this year (33.7 per cent) or in 2014 (24.9 per cent), while 70.5 per cent believe that there is a viable business case for 4G services.

Further, the survey shows that the key reasons for operators undertaking LTE roll-outs are to create new revenue streams (34.7 per cent), increase capacity to offer mobile broadband services (23.3 per cent) and build brand value through technology leadership (31.3 per cent).

 
 

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