Sizing LTE vendor market share

Dianne Northfield/Tolaga Research
There are many ways to spin the dice in terms of evaluating LTE vendor market share.
 
Here we present two scenarios based on the use of empirical data housed in Tolaga Research’s LTE Market Monitor and Service Provider Intelligence Databases.
 
This analysis is focused on vendor contracts awarded for network infrastructure associated with 64 commercially deployed LTE networks around the world as at April 31, 2012. It is based on contracts awarded in association with an LTE launch, and does not include contracts for further network upgrades awarded after the switch on of a live network. MVNO launches are not included in this analysis.
 
Exhibit 1 identifies the vendor share breakdown for the commercial LTE contracts that have been awarded to date.
 
Exhibit 1: Commercial LTE Network Vendor Market Shares
Source: Tolaga Research, Vendor and Operator Releases, 2012
 
As shown, Huawei and Ericsson dominate the market with individual or combined involvement in close to 60% of contracts awarded for commercial LTE networks, followed by Nokia Siemens Networks, which is involved in 20% of the contracts. Sixty percent of LTE contracts involve a single vendor, and Huawei and Ericsson also dominate, with the two claiming over 68% of this market segment. Where commercial LTE networks involve two or more vendors, Huawei is involved in 61% of these awards, while Ericsson and NSN are represented in 58% of multi-vendor deployments, albeit in different vendor combinations.
 
In isolation, this type of data is often misleading or misrepresented, and it is often questioned. For example, macro market share statistics generally fail to compare the size and scope of different LTE vendor contracts. This macro data is strengthened when normalized against other data points. To this end, we turn to an analysis of the potential addressable subscriber market in nations where LTE networks are live. This allows a more quantitative view of contract sizes based on different service provider mobile subscriber bases.
 
Exhibit 2: Vendor LTE Positioning – Potential Addressable Market of Commercial LTE Launches
Source: Tolaga Research, Vendor and Operator Releases, 2012
 
When compared with the data presented in Exhibit 1, we now have a different view of the LTE vendor landscape, which takes into account the potential size of the individual LTE contracts. All contracts are certainly not equal and vary in size relative to service provider. When we scale LTE contracts according to the respective size of the service providers, we see that the tables are turned between the market leaders, with Ericsson coming in before Huawei by a significant margin.
 
Nonetheless, Ericsson and Huawei also dominate - holding just over 50% of the market in terms of subscriber counts associated with their service provider LTE contracts. At the lower end of the scale the tables are also turned, as Alcatel-Lucent’s share now outpaces that of NSN, largely as a consequence of the former's deals in the United States.
 
With a wide array of commentary and unconfirmed claims surrounding LTE vendor market share, we note that the analysis in this article is explicitly based on 64 LTE networks that have been commercially launched. It is not intended to represent a proxy for the wider LTE vendor market which also encompasses LTE trial and network upgrade contracts bringing service providers to a position of LTE readiness.
 
With many LTE network launches anticipated over the next 24 months, the race amongst infrastructure vendors towards market supremacy is by no means over. This is particularly the case as service providers advance their LTE business models to embrace disruptive network architectures such as those that incorporate small cells and advanced antenna technologies and automated operational models that place greater emphasis towards optimizing the customer experience.
 
Dianne Northfield is vice president of research at Tolaga Research, and Phil Marshall Ph D is chief research officer. For more information, visit www.tolaga.com/

 

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