News
21/09/2009
LTE subscribers to reach 380 million by 2015
LTE: a Compelling Answer?
According to its latest report dedicated to Mobile Broadband, IDATE predicts that, by 2015, a total of 380 million subscribers in the USA, EU5, Scandinavia, China, Japan and South Korea will have access to mobile data through LTE networks.
With virtually all big-name operators, handset manufacturers and network vendors on board, the LTE ecosystem is healthy in the extreme - The LTE/SAE Trial Initiative (LSTI) and the Next Generation Mobile Networks (NGMN) Alliance both demonstrate a strong commitment to LTE. The former includes 23 equipment vendors and nine operators, and the latter includes 19 operators and 33 equipment vendors.
Earliest LTE deployments announced for end-2010; many more operators are set to follow - The forerunners of LTE deployment are NTT DOCOMO of Japan and Verizon Wireless of the USA. A host of other big-name MNOs is committed to deploying the technology from 2011 onwards.
Handset vendors still poised to deploy LTE, despite the financial crisis, first through laptops, then high-end phones and on to the mass market - All major handset vendors gave recorded negative YoY shipments due to the financial downturn. This will not stop LTE devices, however, and the first terminals will be aimed for use with laptops, gradually moving on to high-end phones and then to the mass market.
With advent of LTE, many MNOs could become enthusiastic about VoIP and adopt managed-VoLTE - LTE does not support circuit-switched (CS) services, but current mobile networks primarily uses CS for voice services. LTE can utilise VoIP together with an IMS (IP Multimedia Subsystem) network to deliver delay-sensitive, real-time voice services. Presently, operators see VoIP as a threat to their 3G networks, but VoLTE brings benefits to both operators and users. Initial LTE deployment is likely to see CS fallback for voice services, but in the long run managed-VoLTE could be a real possibility.
By adopting LTE, operators can hope to maintain current ARPU levels and stay being a smart pipe - LTE will certainly enhance the mobile experience, but monetising it will be difficult. Consumers are accustomed to free services from the world of Internet, and many LTE services will duplicate them. The realistic aim for operators would be to maintain current ARPU levels by offering premium services, and to keep being a smart pipe by staying at the core of the ecosystem by means of controlling the network and specific activities on top of it.
LTE will likely accelerate FMC, network sharing and strategic partnerships, especially in current financial climate - One potential downfall of LTE is its coverage, especially in its early days. Together with the expanding cellular backhaul traffic, LTE is a driver for adopting Fixed-Mobile Convergence (FMC). Network sharing and partnerships can already be seen throughout the LTE ecosystem, for a variety of reasons; for greater buying power, stronger influence over standards or to gain a foothold in a new market, to name but a few. In the current financial climate, cost-saving is also a key driver.
The cost of LTE deployment for an MNO operating both GSM and UMTS/HSDPA networks amounts to 2.1 billion EUR for coverage of the urban and suburban population. This is the figure to be considered for a territory of 50 million inhabitants with the population density characteristics of a Western European country.
Innovative services and business models, such as VoLTE which can bring benefits to both operators and subscribers, need to be deployed if operators are to maximise the potential of LTE deployment, maintain ARPU levels and continue to be a smart pipe.
