Pyramid & Infonetics: LTE Drives Mobile Data Growth- Better Spectral Efficiency, Lower Latency, Increased ARPU

According to Pyramid Research, the US telecom market generated $389.6bn in service revenue in 2011, a 5.2% increase over the previous year, and represents the highest growth rate since 2007. Mobile data was the single most important driver behind this trend, generating $10.1bn more revenue in 2011 than in 2010. We expect to see service revenue grow at a more subdued 2.9% CAGR over the 2012-2017 period.

There are many subcategories of mobile data that are contributing to the top line, with mobile broadband data packs for smartphones, tablets, e-readers and M2M among the most notable. Connected cars, for instance, make for an interesting opportunity within the M2M space. Sprint estimates that already 4% of cars are wirelessly connected today. Sprint expects that having at least two wireless connection streams will eventually become commonplace —one for entertainment (music, video) and one for emergency use (similar to the OnStar service today). These initiatives and others will serve to drive mobile data to become a $120.1bn market in 2017.

Pyramid says the U.S. will continue to lead the world in total LTE subscriptions, making up 25.2 percent of total global Long Term Evolution (LTE) subscriptions in 2017, according to a new report titled, US: Bundling and Mobile Data Revenue Drive Telecom Market Growth.

“By 2017, LTE will be the most prevalent form of mobile cellular connectivity in the U.S., with 41.3 percent of subscriptions,” says Pyramid Research Analyst, Emily Smith. Even though there are many different forces at play that are
driving operators toward LTE, like the spectrum crunch, data QoS concerns and operational costs, Pyramid expects to continue seeing a market for older 2G and 3G technologies over the forecast period. “For the near future, investment in
these networks will continue, while 1xRTT remains the most dependable voice technology for CDMA operators like Sprint, leaving a small percentage of subscriptions as 2.5G-only through 2017,” she adds.

Not to be outdone, Infonetics Research released excerpts from its 2012 LTE Deployment Strategies:
Global Service Provider Survey, for which incumbent, competitive, and mobile operators were interviewed about their Long Term Evolution (LTE) network drivers, deployment plans, challenges, and service offerings.

“Despite the global gloom, there are better days ahead for mobile operators,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. “For the first time since we began tracking LTE in 2008, increased average revenue per user (ARPU) is among the top LTE upgrade drivers, along with spectral efficiencies that are driving down the cost per gigabyte. As a result, operators’ bottom line should improve for a change.”

.    Almost 1/3 of the operators that Infonetics surveyed plan to use their 2G and 3G networks for voice services as long as possible
.    TD-LTE continues to gain momentum, spearheaded by China Mobile’s participation in the LTE standards process
.    Single radio voice call continuity (SRVCC) is on track to become commercially available in Fall 2012, but 84% of operators surveyed don’t expect the feature to be ready this year
.    EMEA (Europe, Middle East, Africa) leads in the number of LTE deployments worldide, while North America is home to 80% of the more than 10 million global LTE subscribers


For this LTE Service Provider Survey, Infonetics interviewed incumbent, competitive, and mobile operators about their LTE network build-out plans, deployment migration scenarios, challenges, technical and commercial drivers, and the LTE services, features, and devices they plan to offer. Service providers surveyed together represent 31% of the world’s telecom capital expenditures (capex) and 29% of the world’s telecom carrier revenue, and come from EMEA (Europe, Middle East, Africa), North America, Asia Pacific, and Latin America. To buy the survey, contact Infonetics sales: