LTE deployment is in full swing across the globe, and the appetite for seamless mobility, digital services, and capacity is ever-increasing among billions of consumers. After embracing the opportunity to “go digital,” global businesses are now managing the transition towards full market penetration of LTE.
A 2013 report by GSMA Intelligence stated that global LTE connections will pass the one billion mark in 2017. And that trend will continue: global LTE connections will climb to three billion by 2020, according to a July 2014 study by Juniper Research.
As of August 2015, 66 mobile operators in the Asia Pacific region had LTE up and running. In the past five years, more than 170 operators have acquired new spectrum earmarked specifically for 4G use, and 42 have acquired technology-neutral spectrum licenses.
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LTE Insights October 2015
Most markets leading in LTE today benefited from the early assignment of additional frequencies for LTE use. Developed markets are reaching a saturation point when it comes to smartphone adoption, while developing markets continue to expand their LTE infrastructure and seek ways to lower the out-of-pocket cost of purchasing a smartphone.
LTE has had (and will continue to have) a positive impact on usage for operators across the world. With time, LTE’s increased speed and capacity will help grow revenue for these operators, as consumers use more robust apps and more data with the support of growing network capabilities.
Smartphones are key
One important and key aspect to this growth is the growing popularity of smartphones. That may sound obvious, but smartphones are driving network expansion across all regions. For example, 4G adoption is a key driver of smartphone sales, and LTE devices represent 90% of smartphones sold today, according to one top executive from a North America-based CSP.
LTE smartphone users download approximately twice the amount of data that non-LTE smartphones consume - in some cases, three times as much. Also, consumers are encouraged to consume significantly more data than previously because of expanded capabilities and network capacity, and they can do so because of the increased breadth of network services, which providers can monetize.
Leading mobile carriers in China, with hundreds of millions of subscribers and strong related handset sales, continue to push adoption of 4G in China. As developed markets approach saturation, developing markets will play an increasing role in demand for 4G smartphones, causing suppliers to seek ways to meet the needs of price-sensitive consumers. On that front, a number of non-traditional handset providers plan to deliver low-priced smartphones to emerging markets.
Formulate your 4G strategy
Whether a CSP is in a developed or developing market, it must have a clear strategy that continues the transition to complete LTE market penetration, and helps drive adoption of 4G. There are three areas where CSPs have differentiated themselves: network, customer experience, and pricing.
As LTE deployment continues, here are a few items that must be factored in to 4G strategies going forward:
- Small cells - Especially for dense urban areas, small cell deployment helps fill both coverage and capacity needs, and incorporating them into the overall strategy is crucial.
- Network deployment - An aggressive view of both network coverage and capacity is essential. This will help CSPs with cost-per-byte-per-user.
- Customer experience - As with any customer-facing industry, providing an end-to-end customer experience that is both engaging and differentiated is also a critical component in satisfying customers. Leading CSPs, CSP retailers and consumer goods industries are implementing omni-channel strategies across all channels - including mobile, call center, web, retail, and social media - to deliver an integrated customer experience.
- Internet of Things (IoT) strategies - Defining strategies for the IoT is an important component for CSPs to expand their base and further penetrate additional industries. LTE enables a new level of IoT usage. In the Asia Pacific region, China has the largest IoT network, while others are playing catch-up. CSPs must try to become part of the revenue stream of apps and services leveraging the IoT.
- Devices - CSPs must continue to work with suppliers to introduce more capable and affordable 4G devices, particularly smartphones. The influx of device manufacturers from China enables a segment of the population with more affordable and capable devices. Finding additional partnering opportunities will be an important component in the device strategy. Ultimately, the goal is to ensure that consumers have a broad range of choices when it comes to 4G device capability and cost to the end-user.
In their path to improve network infrastructure and operations in the era of continued LTE and 4G growth, CSPs must boost their ROI, deploy services more effectively and efficiently, and provide an enhanced quality of service to their customers across the board. By following these strategies, CSPs can enhance the digital customer experience and - in time - grow revenue through new products and offerings.
Miguel Myhrer is managing director and Steven Brown and Geoffrey Prior are senior managers for Accenture’s Communications, Media, and Technology Group
This article was first published in Telecom Asia LTE Insights October edition