Smartphones drive rapid growth in 4G subs

Dianne Northfield/Tolaga Research
21 Jun 2013

Since launching its commercial 4G LTE services in late September 2011, Telstra's LTE subscriber base has grown to 2.1 million over a 19-month period. This compares favorably with the subscriber growth rates recorded by other LTE powerhouses, including Verizon (which hit 29.3 million in 28 months) and SK Telecom (hitting 10 million subs in 22 months).

Telstra initially launched only 4G dongle-based services and has since added Wi-Fi hotspot, tablet and smartphone services. Telstra's device portfolio encompassed 19 products last December and it has continued to add to its 4G device pool.

Telstra's LTE device sales increased sharply in the period between February and April 2013 - from 1.5 million to 2.1 million - attesting to the fast ramping nature of the mobile network operator's 4G LTE business. Figure 1 charts the growth of Telstra's 4G subscribers along with key device launch dates.

The rapid spike in 4G uptake is attributed to growth in iPhone5 sales, many with high-end service plans, along with sales of dongles according to Telstra releases.

One in three LTE devices sold by Telstra is an Apple iPhone. Uptake of dongles has been particularly pronounced for business users, notably in the construction and manufacturing industries. Telstra reports that over 60 percent of its LTE subscribers are using handsets followed by dongle users as shown in Figure 2. It recently reported that it believes that one in every five smartphone user plans to purchase an LTE handset within the 12 months.

In a parallel scenario, Japan's NTT DoCoMo has grown its LTE subscriber base to over 10 million over a 26-month period. Its subscriber growth rate has expanded rapidly month over month since the operator launched handsets in November 2011 when its subscriber base was about 650,000. By December of the same year LTE subscribers hit the one million mark and reached four million by July 2012.

This same pattern can be seen for operators including Verizon and SKT that have also taken an aggressive stance in the promotion of their 4G services.

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