[Satellite TODAY 02-13-13] By 2017, 4G LTE operators will see their revenues leap through an extended growth spurt, reaching more than $340 billion spread throughout the international market, compared to the $75 billion the LTE industry generated in 2012, according to a new Juniper Research study posted Wednesday. The firm said the momentum LTE has gained during the past 12 months supports the projected growth period.
The report, “4G LTE: Subscribers, Devices, Infrastructure & Service Revenue 2013-2017,” asserts that LTE has enjoyed continued success in serving higher value subscribers.
If Juniper’s results were to be proven correct, the 2017 $340 billion intake would represent approximately 31 percent of total service revenues from all mobile services of all generations (2G/3G/4G) at that time. Thought LTE has initially been dominated by the enterprise segment, the analysis firm predicts that consumer subscribers will begin to sign up for services in volume this year and will overtake the enterprise subscriber numbers by 2015.
While the firm believes LTE consumer subscribers will exceed enterprise, it also believes the consumer segment will only account for less than half of total revenues, with North American and Far Eastern markets, especially China, generating a vast majority – almost 70 percent – of total LTE revenues.
Juniper Research Analyst and Report Author Nitin Bhas said that Mobile Network Operators (MNOs) will need to develop clear pricing strategies to transition customers to LTE, especially with the increased penetration of LTE capable smartphones and other connected devices.
“Overall they will have to present customers with innovative services that will meet users’ requirements and, crucially, that users will attach value to,” said Bhas. “Operators will have to review their tariff structures to balance the need to monetise the greatly increased data throughput, yet still offer attractive packages. For example, with spectrum auctions underway in the United Kingdom, EE felt obliged to cut down its initial LTE pricing by approximately 14 percent within weeks of their network launch while Three UK has already announced 4G access at no extra cost.”
Bhas identifies what he calls the “twin issues” concerning spectrum as the timing of availability and the cost of bandwidth. With the twin spectrum issues playing pivotal roles in deciding the speed of LTE rollouts in the United States and the United Kingdom, Bhas added that, “4G LTE can represent a substantial investment that will take several years to recoup,” he wrote in the report. “This however critical, however, bearing in mind that at the outset only a comparatively small number of subscribers will be LTE-capable.”
On these issues, fellow research firm Ovum released a separate report Feb. 13, which uncovered huge disparities in regulatory environments worldwide, especially in the regions where Juniper predicted the strongest growth in LTE consumer services.
Having assessed and ranked the regulatory performance of 11 countries across three geographic areas, Ovum Analyst and Co-author of the report James Robinson found that inconsistent regulatory frameworks are holding back competition and investment in the global telecoms industry.
The countries that received the worst ranks across the board were those with generally less competitive markets – for example, Japan and South Korea. “[In those countries] the relationship between the government and the regulator could be perceived as too close,” Robinson wrote in the report. “Independence from political involvement is important in ensuring a credible NRA, whose decisions may be challenged through an effective appeals process.”
Robinson’s co-author, Ovum Analyst Luca Schiavoni, added that significant differences occur across regions in most areas of regulatory activity and that the regulation of the wholesale fixed sector differs from country to country, and from region to region, mainly due to the varying uptake of copper- and fiber-based fixed broadband. In Schiavoni’s ranking, Mexico appears significantly below its counterparts in South and Central America for almost every respect of the regulatory environment.
“While Colombia and Brazil are making progress in setting out a stable framework which reflects the industry’s developments, the regulatory process in Mexico appears confusing and slow. This inevitably leads to inefficiency in most areas of regulation,” said Schiavoni. “Regulators are awarding more frequencies for the development of next-generation mobile broadband. No one country appears willing to be left out from the opportunities of 4G. This is particularly true in South and Central America, where mobile connections go a very long way toward getting people online.”