LTE: opportunities and impact on operators

About LTE:

LTE is an acronym for Long Term Evolution, it is a 4G wireless communications standard developed by the 3rd Generation Partnership Project (3GPP) that is designed to provide upto 10 times the speeds of 3G networks for mobile devices such as smartphones , tablets and wireless hotspots. 4G technologies are designed to provide IP-based voice, data and multimedia streaming at speeds of at least 100 Mbit/sec and up to as fast as 1 GBit/sec. It is basically dealing with much more high speed than one would have expected. For example: while downloading, a movie gets downloaded in just one second...that is the speed they are provided by the operators.

The first commercial LTE networks were launched by TeliaSonera in Norway and Sweden in December 2009; as of 2012, there were 117 commercial LTE networks in various stages of commercial service. But, the plan is for 130 LTE deployments by the end of 2013 or in start-ups of 2014.

Opportunities and Impact on Operators:

As per recent stats new Long Term Evolution (LTE) mobile phones and proclamations of unsurpassed network speeds, Mobile Network Operators (MNOs) are invested heavily in the role. As LTE will play in their future competitiveness. LTE network rollouts are underway at various stages in major U.S. and global markets, so as per this the time is now for MNOs to monetize these investments by delivering new, innovative advanced communications services alongside voice to enterprise end-users and consumers.

According to research firm Informa  70% of global operators believe 4G services should be launched everywhere by 2013. The sense of urgency is not simply perceived but very real, resulting from a small but closing window of opportunity for MNOs to be the provider of choice when it comes to delivering unified communications services – including mobile video calling, instant messaging and presence, and Web collaboration – to customers. Top players such as Apple and Google are chomping at the bit to seize mobile subscribers and revenues, while the increasingly mobile workforce now demands a consumer-grade communications experience that matches what they have come to expect on their tablet, iPhone, Android and BlackBerry devices.

The ability of MNOs to capitalize on this opportunity will go a long way toward shaping the future of mobile broadband communications, including but not limited to what services are available to enterprise end users and consumers, who delivers these services and, of course, what customers will have to pay for these services. A better word than capitalize is monetize. Mobile operators must start the process of monetizing LTE today.

In all markets, LTE subscribers used significantly more mobile data than 3G subscribers. Specifically, in Korea and Japan, markets often used as leading indicators of mobile trends. At the same time, decreases in relative Wi-Fi usage in all markets were also noted and Korea registered an absolute decrease. While Wi-Fi usage is still very significant, the data points to a possible trend towards a decrease in reliance, suggesting an opportunity for LTE operators. LTE operators' strategy to reset pricing plans during the transition to 4G appears to be working. Various survey by mobidia’s data shows significant decreases in unlimited plans and increases in larger-sized, volume-limited plans. As an example, only seven percent of LTE subscribers are using unlimited plans compared to 24 percent of 3G subscribers. Additionally, the percentage of subscribers on 2G or higher plans increased from only 10 percent of 3G subscribers to 62 percent of LTE subscribers. So, to conclude the impact is severe at present on operators but the future is hopeful and operators can invest in this technology.

Vivek Chaturvedi

Class of 2015