LTE to account for 4% of world’s mobile connections by 2015 - 300 million LTE connections forecast by 2015 led by growth in major Asia Pacific markets

LTE networks will account for 4 percent of the world's mobile connections within five years, according to a major new report by GSMA Intelligence. The new study, Global LTE network forecasts and assumptions 2010-2015, predicts that global LTE connections will surpass the 1 million mark in the first half of 2011 and will reach 300 million by 2015 as the world's mobile operators ramp-up rollout of the next-generation network technology.

We forecast that Asia Pacific will be the world's largest LTE region by 2015, contributing almost half (43 percent) of global LTE connections by this point (see Table 1). Major LTE migration is expected in key regional markets such as China, Japan, Indonesia and South Korea during the period. As a consequence, we estimate that 20 percent of the Japanese mobile market will have migrated to LTE networks within five years, closely followed by South Korea on 17 percent. Both markets have already migrated a significant majority of their customers (70 percent and 60 percent, respectively) onto WCDMA and HSPA networks, which will support a rapid migration to LTE. Elsewhere in the region, Hong Kong's CSL launched LTE this month, becoming the first Asian operator to do so.

However, even though we predict that only around 5 percent of the Chinese mobile user base will have migrated to LTE networks by 2015, the sheer size of the Chinese market - the world's largest - means it will still account for almost half of the Asia Pacific region's LTE connections by this point. Market-leader China Mobile has been conducting TD-SCDMA/TD-LTE trials in 2010 and is planning on rolling-out its TD-LTE network as early as 2011. Third-placed China Telecom is also expected to launch LTE services next year, while number-two China Unicom – in collaboration with minority shareholder Telefonica – is expected to launch LTE by 2012.

Despite the longer-term prospects for LTE in Asia Pacific, LTE network migration is being initially driven by operators in Western Europe and North America, which account for a combined 70 percent of global LTE connections in 2010. This is due to early LTE network rollouts by operators such as TeliaSonera (Europe) and Verizon Wireless (USA). By contrast, the Americas and Africa are expected to be the two regions slowest to migrate to LTE, collectively accounting for just 5 percent of global LTE connections by 2015.

Our study is based on all known LTE deployments scheduled to take place over the next five years (excluding India). It predicts that 19 live LTE networks will be up-and-running across the globe by year-end 2010. These include major commercial LTE launches due later this month from market-leading operators such as NTT Docomo (Japan), Deutsche Telekom (Germany) and Etisalat (UAE). The world's first commercial LTE networks were launched a year ago by TeliaSonera in Sweden (Stockholm) and Norway (Oslo); TeliaSonera has since rolled-out LTE across its Nordic footprint, including in Finland and Denmark. GSMA Intelligence forecasts that global LTE connections will reach 350,000 by year-end 2010.

LTE migration will also be dependent on regulators allocating suitable frequency bands. The study highlights three main spectrum scenarios for the deployment of LTE services; the release of IMT extension spectrum in the 2500-2600MHz bands, the release of 'digital dividend' spectrum in the 700-800MHz bands, and the re-farming of existing spectrum.

Joss Gillet, Senior Analyst, GSMA Intelligence:

The introduction of LTE networks reflects the move the telecoms industry is making towards delivering cloud-based and converged services, and an improved user experience. Our latest forecasts show that LTE is being adopted by operators across the globe, but the pace of migration will be faster in countries where mobile broadband is on the political agenda and favourable regulatory developments are taking place – especially with regards to spectrum. However, creating a profitable ecosystem around the new networks will take time and it may take a few years for LTE services to live up to the hype. Subscriber uptake of LTE is initially being driven by demand for data-centric mobile broadband services, typically accessed via USB dongles and embedded devices for which operators will charge a premium. We predict that the introduction of voice over LTE (VoLTE) by around 2012 will mark the 'tipping point' for mass-market LTE handset volume shipments, which will accelerate LTE connections growth. However, premium price points and limited availability means that we will see low LTE handset penetration in the short term.

Regional share of LTE connections (%)
Source: GSMA Intelligence