25 Jul 2012

Maravedis-Rethink predicts patchy LTE growth without key business decisions

LTE is seeing rapid growth in 2012, and will generate over $1.7bn for the wireless vendors this year, a figure which will increase tenfold by 2017, reports Maravedis-Rethink, US.

But, adds the industry analysis company, LTE will only fulfill that potential if operators address several key business challenges first.

Despite a 61% increase in subscribers between the first and second quarters of 2012, LTE will account for less than 5% of global wireless capex this year, and mass LTE deployments are highly concentrated within a few carriers and geographies.

For these successes to be repeated around the world, mobile carriers have several hurdles to overcome - spectrum availability, a smooth transition for voice services, and a clear strategy for pricing.

The last emerges from the survey as a critical issue for LTE return on investment. Maravedis-Rethink found that 4G service pricing strategies worldwide are in chaos, with major implications for margins and data roaming.

"The move to 4G is not merely a way to increase capacity and data rates. It will only deliver returns for the operators if it is accompanied by a complete rethink of the business model," commented Caroline Gabriel, research director at Maravedis-Rethink. "That is why some operators appear to be taking the cautious approach for now, but a surge of investment will happen from 2013 onwards."

Another important trend is the entry of TD-LTE into the mainstream. The 'junior' strand of the standard now accounts for almost one fifth of commitments (35 in a total of 184 worldwide).

"Maravedis-Rethink anticipates that 560 million LTE subscribers will be active by 2017, of which 25% or 117 million will be TD-LTE users," added Cintia Garza, 4GCounts team leader.

Multi-mode devices will be essential to TD-LTE uptake, and the study forecasts that by 2017, 83% of devices will be capable of supporting both TDD and FDD modes.

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