LTE: What happened and what's next

LTE: What happened and what's next

Value Partners analysts and John C. Tanner  |   September 12, 2012
Telecom Asia
That's the story up to 2012. As the next wave of LTE operators gear up for launch, they will be taking those lessons to heart, but that doesn't mean they will be able to simply copy old strategies and replicate the success stories. They will be confronted with their own challenges and opportunities, from spectrum and TD-LTE to VoLTE and M2M.
In terms of subscriber base, Verizon Wireless is still the undisputed global leader in LTE. (see chart: Top LTE operators by subscriber base) The US remains the biggest market for LTE with all three LTE operators ranking high on the chart.
Verizon's success over its counterparts can be attributed to its wide coverage, strong LTE marketing with no LTE premium and the sheer number of devices - Verizon has 20 LTE smartphones and half as many LTE tablets on offer, more than any other operator.
Success stories
Rogers has also done well in the Canadian market by increasing its LTE penetration from 0.2 to 6.4% in half a year, making Canada one of the bigger LTE markets.
The most noticeable success story on the chart is Korea. SK Telecom has unseated NTT DoCoMo from second place, and the Korean market seems to be growing rapidly with strong penetration rates of 5% to 20%. Koreans have once again shown themselves to be a data hungry market as even late LTE entrant KT has managed to grab over 860,000 LTE subscribers in just half a year. Possible reasons for success of LTE in Korea include a moderately strong device offering (five to 12 smartphones for each operator), comprehensive LTE plans priced closely to 3G plans and - most importantly - it's the only country where all three operators can claim nationwide LTE coverage.
One notable feat is how Russian operator Yota transformed 300,000 Wimax subscribers in Moscow, the bulk of its subscriber base, into LTE users overnight. This is part of its move to comply with the regulator requirements to convert all its subscribers to LTE by September. Yota has moved from being a Wimax poster child to sole LTE wholesaler in Russia in just slightly over half a year, as it felt that LTE had a better ecosystem compared with Wimax 2.
European counterparts like Germany and the Nordic countries seem to be experiencing much slower growth despite being early adopters and having continual network upgrades. This may be due to the pricing premium placed on LTE, which has restricted LTE growth only to the high-end segments. However, there are indications that European markets with fierce LTE competition are seeing prices come down on a per-GB basis (see sidebar, "The case for speed-based pricing").


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