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Analyst Insights iSuppli: LTE to Account for 10 Percent of Global Wireless Subscribers by 2015
Nov 15, 2011 – Francis Sideco

Driven by near-universal support among mobile network operators, the next-generation 4G wireless standard known as long term evolution (LTE) will enjoy stratospheric growth during the next few years, allowing the technology to account for 10 percent of worldwide mobile subscribers by 2015, according to an IHS iSuppli Smartphones & Converged Devices Market Tracker report from information and analysis provider IHS (NYSE: IHS).

Worldwide subscribers to 4G LTE at the end of 2011 will number a projected 11.6 million, up a superheated 4,062 percent from just 300,000 in 2010. Another round of explosive growth is anticipated for 2012 when the technology increases its subscriber rolls by an impressive 442 percent to hit 62.8 million.

Growth in the three years after 2012 will slow down somewhat but will remain robust, at 214 percent in 2013, 105 percent in 2014 and 84 percent in 2015.

By 2015—or five short years from initial launch—LTE will command a total of 744.2 million users, equivalent to 10 percent of the approximately 7.3 billion total mobile handset subscribers worldwide.

Although LTE usage in 2015 still will trail those of older wireless technologies—3.8 billion for 2G and 2.8 billion for 3G—the pace of expansion for LTE will be unmatched, especially because subscriber growth is slowing for legacy wireless standards, IHS data show.

“From fast music downloads, to high-definition video streaming, to multiplayer gaming, 4G can deliver the required bandwidth required for next-generation mobile services,” said Francis Sideco, senior principal analyst for wireless communications at IHS. “With its widespread industry support, LTE is emerging as the standard of choice to provide these and other compelling content offerings.”

The term 4G is defined as the next generation of high-speed, low-latency cellular technologies. Boasting speeds of up to 100 megabits per second and latencies in the tens of milliseconds, such next-generation technologies theoretically can be up to 10 times faster on average than 3G, the widely available standard today. The 4G technology is especially suitable for data intensive, real-time applications like video streaming and multiplayer gaming, which can gobble up bandwidth and capacity quickly and result in less-than-usable transmission of images and sound in older wireless standards.

LTE is in it for the Long Haul
The rise of LTE is remarkable for its projected speed of deployment. This speed is made possible because a common air interface standard now exists to which the wireless ecosystem can commit in developing next-generation smartphones, networks and applications. In the past, multiple commercial standards of older 2G and 3G technologies caused the market to fragment, resulting in continuous air interface transitions that not only bewildered customers but also hindered industry wide development in general.

“As the wireless market has matured, it has become clear that technology for its own sake is no longer valued by consumers,” Sideco said. “As a result, operators, handset manufacturers and even chipset suppliers have moved away from emphasis on technology. Instead, the focus has shifted to what mobile devices can do from the standpoint of users. They are looking for new capabilities enabled by the higher speeds and lower latencies of the new 4G technology. Attention now centers on product features that enhance the overall user experience—factors such as an attractive user interface for phones, applications to increase fun and productivity and smooth integration with new cloud-based services.”

Looking Backwards
To be sure, the wireless industry still must deal with the legacy fragmentation of air standards to ensure backward compatibility of future mobile handset devices. However, the common ground established by LTE means that more time can be spent within the wireless community to develop new applications and services for consumers.

Already, the results of leveraging a common underlying interface are bearing fruit, with wireless technology now an enabling factor in many areas of commercial activity, including retail, services, banking, healthcare and the automotive sector.

Nonetheless, a host of technical and commercial issues remain that must be addressed by the operators, IHS believes. In one challenge related to contiguous spectrum availability, operators are only able to field 10 megahertz (MHz) LTE channels as opposed to the more ideal and efficient 20MHz options.

Other issues facing operators include the establishment of new business models as wireless expands its reach past traditional borders into other industries; designing LTE devices that take advantage of new chipset architectures; and coping with the highly dynamic environments resulting from all these advances.



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