MONTREAL – LTE is seeing rapid growth and is expected to generate over $1.7 billion for wireless vendors in 2012. That figure could increase tenfold in the next five years, but only if operators address several key business challenges first, says a new report by Maravedis-Rethink.
According to the latest 4G Counts report, despite a 61% increase in subscribers between the first and second quarters, LTE will account for less than 5% of global wireless capex this year, and mass LTE deployments are highly concentrated within a few carriers and geographies.
For these successes to be repeated around the world, mobile carriers have several hurdles to overcome – spectrum availability, a smooth transition for voice services, and a clear strategy for pricing. The report describes 4G service pricing strategies worldwide as being “in chaos”, which could have major implications for margins and data roaming.
"The move to 4G is not merely a way to increase capacity and data rates. It will only deliver returns for the operators if it is accompanied by a complete rethink of the business model," said research director Caroline Gabriel, in the report’s news release. "That is why some operators appear to be taking the cautious approach for now, but a surge of investment will happen from 2013 onwards."
Another important trend is the entry of TD-LTE into the mainstream. The 'junior' strand of the standard now accounts for almost one fifth of commitments (35 in a total of 184 worldwide). The report predicts 560 million LTE subscribers will be active by 2017, of which 25% (117 million) will be TD-LTE users. Multi-mode devices will be essential to TD-LTE uptake, and the study forecasts that by 2017, 83% of devices will be capable of supporting both TDD and FDD modes.
Other key findings include:
– The top 50 LTE operators profiled in 4GCounts reached a total LTE subscriber base of 17.6 million at the end of Q1 2012, in a global total of 20 million;
– In Q1 2012, NSN and Huawei enjoyed the lion's share of awarded LTE contracts, with 28% and 24% respectively; and
– The WiMAX subscriber base will decline from 25 million in 2012 to 11 million by 2017.
