Pyramid Research (www.pyr.com) says that LTE subscriptions in Asia-Pacific will top all other regions by 2014, with Japan and China as regional leaders; however LTE will take longer to gain scale in emerging Asia-Pacific markets,
Long-term evolution (LTE) has become the worldwide standard for next-generation mobile technology, and a handful of operators in Asia-Pacific will be in the forefront of its development and implementation. Through the combined pressure of demand-side and supply-side factors, LTE deployment is likely to eventually occur in all major markets in the region.
Demand-side drivers include the rapid growth in the base of mobile subscribers, the uptake of next-generation devices by consumers and the growing popularity of bandwidth-heavy applications. On the supply side, the need for more efficient use of limited spectrum assets in order to keep pace with growth, the need to lower operational costs and the desire to introduce new bandwidth-rich applications to differentiate themselves from the competition have been driving operators toward LTE deployment.
LTE will be deployed in developed markets first where more customers are willing to pay for better service, with wide-scale deployments in emerging markets expected after costs for equipment, devices and handsets begin to decrease. Although the market share potential for LTE in emerging markets in the next five years is limited, due to its huge population we expect emerging markets to capture more than half of the LTE market share in Asia-Pacific by year-end 2016. Overall, we expect LTE to reach 238.1m subscriptions by year-end 2016, comprising 5.8% of the Asia-Pacific total mobile subscriptions. In the developed markets, the figure will be 29.4%, and in emerging markets, it will be 4.0%.
The Pyramid Research report, “Asia-Pacific to Be Global Leader in LTE by 2014” analyzes the market opportunity for LTE by looking at factors affecting operators’ decisions to deploy LTE in the next several years across developed and emerging markets in Asia-Pacific, the motivations behind the trendsetters as opposed to the early majority, and the factors that might cause an operator not to deploy LTE in the next five years. This report provides subscription forecasts and projected LTE capital expenditure amounts from selected operators.
“LTE networks will exhibit strong growth in Asia-Pacific in both developed markets and specific emerging markets, due to a combination of cost and competition considerations by operators and exponentially increasing data usage by consumers,” says Pyramid Research analyst Emily Smith. LTE will be deployed first in developed markets, where more customers are willing to pay for better service, with wide-scale deployments in emerging markets. The market is expected to ramp up soon after costs for equipment, devices and handsets begin to decrease. “Although the market share potential for LTE in emerging markets in the next five years is limited, due to their huge population Pyramid expects emerging markets to capture more than half of the LTE market share in Asia-Pacific by year-end 2016,” Smith indicates.
An earlier study by Wireless Intelligence concluded that Asia Pacific would surpass 120 million LTE connections in 2015. That firm had forecast that LTE will account for around 3 percent of all connections in the region by this point, driven by key regional markets such as China, Japan, Indonesia and South Korea.
The figures are the first LTE forecasts published by Wireless Intelligence and form part of a global LTE study due to be published later this year. The Asia-Pacific study includes LTE forecasts for 35 mobile operators across 11 regional markets: China, Japan, South Korea, Taiwan, Australia, New Zealand, Malaysia, Hong Kong, Singapore, Indonesia and the Philippines.
The pioneering LTE operator in the Asia-Pacific region is expected to be Japanese market leader NTT Docomo, which plans to launch its ‘Xi’-branded LTE service in December this year. The service will initially be switched on in Tokyo, Nagoya and Osaka, with plans to gradually expand coverage to additional cities.
Docomo has been testing LTE since June this year and is deploying new WCDMA base stations equipped with newly-developed remote radio equipment (RRE) units to support both existing WCDMA (3G) and forthcoming LTE services. The deployment is a part of the operator’s plan to layer a 2GHz LTE network over its existing 3G network to provide dual WCDMA/LTE services. Meanwhile, Docomo’s domestic rivals SoftBank Mobile and EMOBILE (eAccess) are both planning LTE launches in 2011 and 2012, respectively, while supporting high bandwidth mobile services via their HSPA+ networks in the meantime. This market scenario means that Docomo will benefit from a first mover advantage, which is expected to boost its LTE market share in Japan to approximately 60 percent by 2015 (it currently has an overall mobile market share of just under 50 percent).
Wireless Intelligence estimates 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.
Japanese and South Korean mobile users will account for almost 30 percent of total LTE connections in the Asia-Pacific region by 2015 (see table). However, almost half (47 percent) of LTE connections by this point will be based in China, the world’s largest mobile market.
Question & Comment: Where does this leave Mobile WiMAX in Asia Pacific? South Korea, Japan and Taiwan were big proponents of that technology which seems to have faded fast from all market researchers radar screens! Has Korea switched from WiBro to LTE? Can WiMAX from UQ Communications (with a $43M investment from Intel) compete with LTE from NTT DoComo in Japan? What about all the Taiwanese WiMAX operators who’ve been silent for over 1 year?