The Asia-Pacific region dominates the global LTE scene, both in terms of current LTE users as well as expected new LTE users. However, LTE in Asia-Pacific is a tale of two different stages of adoption and the accompanying challenges at each stage.
Countries such as the Philippines, Indonesia, Thailand, or India are at the early stages of LTE adoption, while markets such as South Korea and Japan have advanced LTE ecosystems and are actively considering 5G technology. Both these sets of markets have their own challenges to continue the development and adoption of LTE.
Telecom operators in emerging markets in Asia face the twin challenges of maximizing their ROI from 3G networks while having to justify the additional investments and returns on LTE. They also face several challenges in stimulating LTE adoption and migrating customers from their 3G networks.
First, ensuring that they have a compelling value proposition for 3G customers to use LTE services. This includes key elements like the positioning of LTE vs 3G, the pricing of data on LTE vs 3G, and the specific services and consumer benefits that only an LTE network can provide.
Second, regulators in some markets are still grappling with issues around spectrum allocation for LTE, including critical concerns like re-farming lower frequency bands or declaring them technology-neutral for LTE use. Likewise with upgrading backhaul and transmission infrastructure to cater to the increased traffic of LTE networks.
Third, LTE handset penetration is very low (between 2%-5%) in some emerging markets despite recent launches of low-priced devices. Operators need to take on more creative strategies including OEM marketing partnerships, trade-in schemes, reverse subsidization models, and exclusive device bundles or MiFi device launches to enable 4G speeds on 3G phones.
Fourth, upgrading SIMs where necessary to ensure that a user with an LTE handset can actually avail of LTE services. Many users still carry legacy SIMs, which have to be replaced with an LTE ready SIM. Retail channels also need to upgrade their capabilities to explain the LTE benefits to customers.
And fifth, increased competition from new LTE-centric mobile operators like Bolt and Smartfren in Indonesia, TM in Malaysia and Reliance Jio in India.