Global Boom for LTE Network; Subs to Top 1B by Year-End

Long-Term Evolution (LTE), the most sought-after next-generation (4G) super-fast wireless communications technology, is rapidly gaining momentum globally. The 4G wireless network aims to cope with the substantial demand for high-speed wireless data services and mobile video.

The Global Mobile Suppliers Association (GSA) recently reported that it anticipates the total number of LTE subscriptions worldwide to exceed 1 billion by the end of 2015.

Citing data provided by analyst firm, Ovum, the GSA noted that the total number of LTE subscriptions reached 755 million globally at the end of Jun 30, 2015, driven by 113.5 million net additions during second-quarter 2015 alone. Moreover, over the past 12 months, 441 million LTE subscriptions were added leading to an annual growth of 140%. On the other hand, 3G subscriptions rose just 74.4 million, while GSM subscriptions dropped 98 million during the same time frame.

Notably, per the report, for the first time, LTE connections accounted for more than 10% of all mobile subscriptions. Also, per GSA data announced in July, 422 LTE networks were commercially available across 143 countries. Further, the association reiterated its earlier estimate that 460 LTE networks will be commercially functional by the end of this year.

Why 4G LTE Networks are Flourishing Worldwide

LTE offers several advantages over legacy 3G network technologies such as improved spectral efficiency, lower cost and solid integration with other open wireless standards. Theoretically, LTE is expected to achieve download transmission speed of up to 300 Mbps and roughly 100 Mbps upload transmission speed.

LTE also supports flexible carrier bandwidth and both FDD (frequency division duplexing) and TDD (time division duplexing) on the same platform. Ability to phenomenally enhance speed and capacity are the positives which spur LTE adoption by wireless carriers.

Asia-Pacific at the Forefront

While the U.S. is expected to maintain the momentum in LTE network growth over the near term, the major impetus is likely to come from the emerging markets of Asia-Pacific. Countries like China, Japan, Taiwan and South Korea are significantly expanding their nationwide LTE network either through TDD or FDD mode.

Continuing its lead, as of Jun 2015, Asia-Pacific accounted for 51.2% of the total global LTE connections followed by North America with 26.2%, down from 42.4% a year ago. At the third place was Europe with around 16% share, while the total figure of LTE subscriptions across Western Europe crossed the 100 million mark. Finally, the rest of the world's share was only 7% halfway through the year.

Within the Asia-Pacific region, China is the primary LTE growth driver. It is worth noting that almost 56% of the new LTE subscriptions added in the second quarter were in that country alone. The Chinese mobile operators collectively signed up 63.5 million customers, taking the market total to 225 million.

Also, the Latin American and Caribbean regions witnessed annual growth of a massive 324%, bringing the total number of subscription to over 22.5 million. The Middle East fared well with a total of 23.7 million LTE subscriptions, resulting in 194% surge annually. In addition, the number of LTE subscriptions in Russia went up nearly threefold from the year-ago tally.

LTE-A Network Deployment Gains Strong Global Momentum

Wireless network standards are continuously evolving around the globe to offer faster speed. After significant growth in the next-generation 4G LTE network deployment, LTE-A (Long-Term Evolution Advanced) wireless network standard is gradually finding a solid foothold globally.

Notably, over 30% of global operators are investing in LTE-A deployments, with two-thirds having already launched the service commercially in 45 countries. Interestingly, most of the LTE-A networks support Category 6 carrier aggregation offering compatible devices above 150 Mbps upload speed and up to 300 Mbps download speed.

Additionally, the total LTE and LTE-Advanced subscriptions are projected to pass the 3G subscriptions global tally by 2020.

The Top Players

The two major U.S. wireless operators, Verizon Communications Inc. VZ and AT&T Inc. T , are gradually expanding their respective LTE networks. In China, the leading wireless operator China Mobile Ltd. CHL decided to initiate a significant LTE-TDD network deployment plan in 2014. Also, SK Telecom Co. Ltd. SKM in South Korea and NTT DOCOMO, Inc. DCM in Japan are aggressively investing in their LTE networks and garnering greater traction in the market.

Looking Ahead

The already thriving LTE market is thus set to touch new highs, going forward. We believe that such robust growth projections in the 4G LTE and LTE-A spaces is a good omen for major wireless operators looking to cash in on the opportunities that LTE offers.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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