The total global Long Term Evolution (LTE) subscription base will reach 1.3 billion by the end of 2018, up from 188.6 million at the end of this year, a compound annual growth rate (CAGR) of 44 percent over the five-year period, according to Informa Telecoms & Media’s latest forecasts.
The report indicated the way in which operators position LTE relative to 3G, in particular in terms of pricing and marketing, is the single most important component of their LTE launch strategy.
The most successful LTE operators have shown that not charging a premium for LTE is the key ingredient in ensuring LTE subscription take-up, the report noted.
Informa’s individual country forecasts indicate that the United States would be the largest market for LTE throughout the forecast period, rising from 89.8 million LTE subscriptions at the end of 2013 to 242.1 million at the end of 2018, a CAGR of 22 percent.
Speed, latency and quality are the main ways operators can differentiate LTE from 3G, according to operator respondents to the survey. In terms of specific services, video is, by far, the service type that operators are seeing drive the greatest volume of traffic on LTE networks.
The vast majority (83.4 percent) of operators responding to the survey on LTE launch strategies said they believe that there is a viable business case to launch LTE today, and one-third said that they plan to launch LTE this year.
"LTE is providing operators with a new lease of life, and not just in terms of being able to offer an improved user experience, a chance to sharpen branding messages and an opportunity to differentiate themselves from rivals," Paul Lambert, senior analyst at Informa, said in a statement.
More than one-quarter (28 percent) of the operator respondents said they saw an increase in data usage of 11 percent or more when a subscriber migrates to 3G, suggesting changes in consumer behavior, and the initial signs are that LTE users are consuming more data than 3G customers.
"Evidence from the market indicates that successful 4G operators have approached LTE-network launches initially as a platform to enhance the mobile-broadband experience rather than to generate new revenues by charging more for access to the network," Lambert said. "By enhancing the end-user experience of accessing the Internet on the go without charging more for access, successful LTE operators are seeing that people use Internet services while mobile more than they did over 3G. Because of this increase in usage, operators are seeing improvements in KPIs."