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Market Watch

4G LTE to Enjoy Blistering 300 Percent Subscriber Growth in Next Two Years

Total subscribers by 2015 will represent 10 percent of all mobile handset users

November 08, 2011

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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 in the hundred- and even thousand-percent range for this and the next few years, culminating in sizable subscriber gains for the technology by 2015, according to an IHS iSuppli Smartphones & Converged Devices Market Tracker report from information and analysis provider 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 reprises its amazing feat this year, increasing subscriber rolls by an impressive 441 percent to hit 62.8 million.

Growth in the three years after 2012 will slow down somewhat but scarcely constitute grounds for complaint: 215 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 iSuppli data show.

The term 4G is variously interpreted, but it is clear—regardless of the definition applied—that the next generation of high-speed, low-latency cellular technologies has arrived. 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 that they intend to replace and supersede. 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 in older wireless technologies and result in less-than-usable transmis­sion of images and sound.

LTE is in for the Long Haul
The rise of LTE is remarkable for its projected speed of deployment, 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 industrywide development in general.

But as the wireless market matured, it became clear that technology for its own sake was no longer a differentiator prized by consumers. As a result, operators, handset manufacturers and even chipset suppli­ers have moved away from pure emphasis on technological specs. Instead, the focus has shifted to what devices can do from a use case/behavior standpoint, as enabled by the higher speeds and lower laten­cies of the new technologies. Attention now centers on product elements that enhance the overall user experience—factors such as an attractive user interface for the phone, applications to increase the fun and productivity quotient, and smooth integration with new cloud-based services.

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 staked out 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 human 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—not to mention the disparate nature of available spectrum bands among different regions. 

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 chip-set architectures; and coping with the highly dynamic environments resulting from all these advances.

Learn More > Putting the ‘Long Term’ in Long Term Evolu­tion 

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