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  4. > LTE worldwide outlook: technology, devices, services and pricing, and deployment forecasts 2013–2018

LTE is out of the experimental stage and is being deployed. Unlike the last major technology upgrade to 3G, most countries are not experiencing 'deployment fever'. Instead, MNOs want to maximise their use of their 3G network infrastructure, and will deploy LTE as demanded by the market and competitive concerns.

About this report

This report provides:
• a 5-year forecast of LTE connections, revenue and data traffic, and LTE’s share of these KPIs in each geographical area
• an in-depth analysis of the trends, drivers and inhibitors for the adoption of LTE networks and devices
• a discussion of the technical characteristics of LTE and LTE-A, and of other factors that affect supply-side take-up of LTE including spectrum and the device ecosystem
• a comparison of LTE pricing, revenue and data traffic growth with lower technology generations
• an analysis of TD-LTE networks, in terms of share of operators, countries and LTE connections worldwide
• key implications and recommendations for mobile operators that are considering the transition to LTE.

This report draws on Analysys Mason’s core forecasts for each of the geographical regions; wireless traffic forecasts; Wireless network tracker; and Spectrum auction tracker.

Geographical coverage

Regions modelled:
• Western Europe
• Central and Eastern Europe
• North America
• Latin America
• Developed Asia–Pacific
• Emerging Asia–Pacific
• Middle East and North Africa
• Sub-Saharan Africa
• Worldwide

Major KPIs

We show the LTE share of the following mobile market metrics up to 2018:
• handset connections
• broadband connections
• service revenue
• handset data traffic
• broadband data traffic

Operators discussed in this report

LTE operators mentioned include:
• A1 Telekom Austria
• AT&T
• China Mobile
• EE
• LG Uplus
• NTT Docomo
• Optimus
• SK Telecom
• Smart
• Sprint
• T-Mobile
• Telefónica
• Telkom Mobile (8ta)
• Telstra
• Turkcell
• Verizon Wireless
• Vodafone
• Yota

More than 20 new LTE handset models and 30 mobile broadband devices entered the market every month on average during 2013

The number of LTE devices nearly doubled between November 2012 and July 2013. Two key factors drive this growth.
• The LTE device cycle: Handset vendors tend to release new flagship models every 12 months.
• New LTE markets: Countries such as France, Italy and the UK have launched LTE networks, creating demand for more devices in the 800MHz and 2600MHz bands.

The LTE device ecosystem is becoming more diverse.
• The LTE device space is dominated by mobile broadband devices such as USB modems, routers and embedded modules.
• Handsets only represented a third of the LTE device ecosystem in July 2013. By comparison, handsets corresponded to 44% of the HSDPA device ecosystem at the same period.

The number of LTE-compatible handsets is set to grow significantly in the next couple of years as LTE deployments mature particularly in Europe. There were 360 LTE handset models in July 2013 compared with 1679 HSDPA handset models.

Table Of Contents

LTE worldwide outlook: technology, devices, services and pricing, and deployment forecasts 2013-2018
List of contents

8.Executive summary and recommendations
9.Executive summary: LTE will spread from the USA and developed Asia to cover a large proportion of the rest of the world in the next 5 years
10.Executive summary: LTE's technology advantages will drive rapid roll-out, subscriber take-up and traffic growth
11.Executive summary: LTE deployment decisions are driven by clear market and business considerations
12.Executive summary: LTE take-up depends on smartphones
13.Recommendations: LTE deployment and device ecosystem
14.Recommendations: driving LTE service take-up

15.LTE market environment
16.LTE trials are making good progress in emerging and developed markets
17.FD-LTE is the most widely deployed LTE technology - deployments and planned networks will provide near-worldwide coverage by 2015
18.TD-LTE networks are augmenting FD networks in many markets, but remain behind FD networks in terms of total number of deployments
19.Ten dual FD/TD-LTE networks have been deployed, combining spectrum assets and offering service differentiation
20.LTE market power is shifting to emerging Asia-Pacific and Latin America - these regions account for most of the planned LTE launches
21.LTE coverage and take-up worldwide will start to even out by 2018, greatly reducing the dominance of South Korea and the USA

22.LTE worldwide and regional forecasts 2013-2018
23.Nearly one-fifth of mobile connections worldwide will be on LTE networks by 2018
24.Key drivers and assumptions of our LTE forecasts
25.Regions that deployed LTE early will race ahead in terms of LTE penetration …
26.… but in absolute terms, we forecast that emerging Asia-Pacific will have the most LTE connections
27.The USA will be the country with the largest number of LTE connections during the forecast period, but China will almost catch up by 2018
28.The transition to LTE began with mid- and large-screen mobile broadband services, but handsets will drive the market ultimately
29.TD-LTE will remain specific to a few niche markets, and will account for 13% of LTE connections by 2018
30.LTE devices will generate the majority of mobile data traffic worldwide by 2015
31.Average 4G ARPU worldwide will be significantly higher than sub-4G, primarily because 4G-intensive markets are also the most expensive
32.4G will generate 52% of worldwide telecoms revenue by 2018, 69% of mobile broadband revenue and 51% of handset revenue

33.LTE technology evolution and spectrum considerations
34.LTE technology is well-suited to allow MNOs to combine multi-technology networks, and to support multiple service options
35.From a technical perspective, LTE offers cost savings and flexibility as well as supporting higher speeds, and LTE-A will push this even further
36.Operators' early LTE-A Release 10 results are offering promisingly fast speeds, but so far miss the 1Gbps mark (outside the laboratory)
37.However, forthcoming releases of LTE-A significantly upgrade mobile network speed and performance compared with the initial LTE release
38.LTE-A Releases 10, 11 and 12 will change the way operators use and manage spectrum for mobile services
39.MNOs will benefit most from several LTE-A features: carrier aggregation and SON by 2014, and HetNets by 2015
40.VoLTE is showing limited market penetration in 2013, hampered by slow network deployments and technical concerns
41.A key advantage of LTE is its suitability for combining the multiple spectrum positions that many operators hold
42.LTE spectrum fractionalisation is more of a myth than a reality - regulators, operators and device manufacturers are addressing the issue
43.The APT700 plan puts North America at odds with the rest of the world, and Africa is also likely to join

44.LTE device availability and trends
45.More than 20 new LTE handset models and 30 mobile broadband devices entered the market every month on average during 2013
46.Three vendors control more than half of the LTE handset ecosystem, in terms of number of LTE handset models commercially available
47.Fragmented LTE spectrum leads to variations in LTE handset availability across the world
48.Apple is showing strong commitment to LTE and has launched iPhone 5S and 5C models that support 17 LTE bands across the world
49.Device vendor role in LTE service usage: Samsung has launched the first LTE-A smartphone
50.Device vendor role in LTE service usage: Sony Mobile Communications is differentiating its LTE-compatible handset with superior applications

51.LTE service offerings and pricing
52.‘4G' is not clearly understood by consumers; operators will need different strategies to market handset services versus mobile broadband
53.Our analysis of LTE smartphone tariff strategies worldwide shows variation across regions, and a strong push towards the mass market
54.We compared the 4G smartphone tariff marketing strategies for LTE operators across Asia, Europe and the USA
55.Entry-level 4G contract tariffs: pricing and allowances vary significantly among LTE mobile operators [1]
56.Entry-level 4G contract tariffs: pricing and allowances vary significantly among LTE mobile operators [2]
57.Marketing LTE [1]: Greek MNOs Cosmote and Vodafone are offering smartphone subscribers extended periods of premium-free LTE access
58.Marketing LTE [2]: competition in the UK LTE market is causing prices to drop, and driving up data allowances
59.Marketing LTE [3]: LTE-operators in Western Europe use content and value-added services to upsell 4G handset tariffs
60.Marketing LTE [4]: LTE makes shared data plans more viable because higher speeds support data consumption across multiple devices
61.LTE mobile broadband retail strategies - we conducted an analysis of tariffs in the second and third quarters of 2013
62.LTE mobile broadband entry-prices will decline as LTE becomes mainstream
63.LTE MNOs are reducing the price difference between 3G and 4G mobile broadband services as their LTE networks mature
64.Operators in Singapore charge up to 51% premium on 4G mobile broadband monthly access charges, for the same data quota as 3G offers
65.Optimus and TMN in Portugal are promoting LTE mobile broadband with unlimited data allowances on all tariffs
66.NTT Docomo offers two-tier variable volume-based pricing that matches sporadic data usage

68.Glossary - key terms in this report

69.About the authors and Analysys Mason
70.About the authors [1]
71.About the authors [2]
72.About the authors [3]
73.About Analysys Mason
74.Research from Analysys Mason
75.Consulting from Analysys Mason

List of figures

Figure 1: Summary of report coverage
Figure 2: Share of top-10 markets' LTE connections, by country, 2018
Figure 3: 4G devices' share of mobile network traffic, by region, 2011-2018
Figure 4: LTE connections by device type, worldwide, 2010-2018
Figure 5: LTE trials in progress, by region, July 2013
Figure 6: FD-LTE network deployments, worldwide, 1Q 2013
Figure 7: TD-LTE network deployments, worldwide, 3Q 2013
Figure 8: FD/TD-LTE network deployments, worldwide, 2Q 2013
Figure 9: LTE network status, by region, July 2013
Figure 10: Share of top-10 markets' LTE connections, by country, 2012
Figure 11: Share of top-10 markets' LTE connections, by country, 2018
Figure 12: Mobile connections by technology generation, and LTE's share, worldwide, 2010-2018
Figure 13: LTE's share of total mobile connections by region and worldwide, 2012, 2015 and 2018
Figure 14: LTE connections by device type and region, 2018
Figure 15: LTE connections by country, 2012
Figure 16: LTE connections by country, 2018
Figure 17: LTE connections by device type, worldwide, 2010-2018
Figure 18: TD-LTE's share of LTE connections by region, 2012 and 2018
Figure 19: LTE's share of mobile connections, revenue and traffic, worldwide, 2011-2018
Figure 20: Mobile data traffic by device type and technology generation, worldwide, 2011-2018
Figure 21: Mobile ARPU by technology generation and region, worldwide, 2018
Figure 22: Mobile service revenue by technology generation and device type, worldwide, 2011-2018
Figure 23: LTE-A test results by operator, September 2013
Figure 24: 3GPP LTE standards network speed and performance characteristics
Figure 25: Key features in LTE-A Releases 10, 11 and 12
Figure 26: Activities relating to VoLTE, selected operators
Figure 27: MNOs according to number of spectrum bands held, worldwide, September 2013
Figure 28: Commonly used frequencies for FD- and TD-LTE networks
Figure 29: APT700 and NAM700 plans status, worldwide, October 2013
Figure 30: LTE devices by type, worldwide, November 2012 to July 2013
Figure 31: LTE handset models by device vendor, July 2013
Figure 32: LTE mobile broadband device models by device vendor, July 2013
Figure 33: Number of LTE handset models by LTE spectrum band, and operator, country or region, July 2013
Figure 34: LTE band capabilities of iPhone 5 and iPhone 5C/5S, October 2013
Figure 35: Samsung Galaxy S4 LTE-A
Figure 36: Sony Xperia Z1
Figure 37: Factors that would most attract mobile broadband users to a new mobile broadband package
Figure 38: LTE smartphone tariff marketing strategies of selected operators, by country, September 2013
Figure 39: 4G entry-level contract tariffs for smartphones, by operator, Europe, 3Q 2013
Figure 40: 4G entry-level contract tariffs for smartphones, by operator, developed Asia-Pacific and North America, 3Q 2013
Figure 41: Access charges and data allowances, ‘COSMOTE unlimited‘ smartphone postpaid tariff plans, Cosmote, September 2013
Figure 42: 24-month postpaid tariff plans with unlimited voice and messaging allowances, but varying data allowances, EE, UK
Figure 43: Content and value-added services bundled with 4G postpaid tariffs, selected operators, Western Europe
Figure 44: Multi-device shared data plans for consumers in the USA
Figure 45: Average cost per gigabyte and monthly access charges for entry-level 4G mobile broadband tariffs, selected countries, 2Q 2013
Figure 46: Monthly data allowance and access charge for 4G entry-level mobile broadband packages, selected countries, Western Europe, 2Q 2013
Figure 47: Monthly data allowances and access charges for mobile broadband tariffs, by technology generation, Hong Kong and Singapore, 2Q 2013
Figure 48: Monthly data allowances and access charges for top-tier unlimited mobile broadband tariffs, 2Q 2013
Figure 49: NTT Docomo's Xi Data Plan and Xi Data Plan 2 tariff structure
Figure 50: Definitions of key terms used in this report

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