Feature Article

January 28, 2013

LTE Operators' Strategy: Focus on Coverage and Multi-Devices

In 2004, NTT DoCoMo of Japan proposed Long Term Evolution, or as we know it LTE, as an International standard. It is a standard for wireless communication of high speed data for mobile phones and data terminals. The first live emulation of an LTE network to the media was presented by Nokia Siemens Networks (known as Siemens Networks in 2006 when first presented). The first demonstration consisted of two users streaming an HDTV video in the downlink and playing an interactive game on the uplink. This happened back in 2006.

Great strides have been made since those early days. The experience in countries where LTE has been deployed relatively early suggests that mass-market pricing, whereby subscribers are given the opportunity to enjoy LTE services at prices comparable to those of 3G services, and the number of devices available – particularly LTE smartphones – are the key factors behind rapid LTE adoption.

In December 2012, the U.S. had five operational networks spanning multiple business models, making it the most competitive LTE market in the world. These business models include high speed premium, prepaid and low cost services. The promises that were made concerning 3G networks for high speed data, mobile video and other services are starting to be realized with LTE networks.

Smartphones are the keep factors behind rapid LTE adoption in other countries. South Korean operators offer a variety of LTE smartphones and devices which are comparable to their 3G prices. Operators in other countries have focused on network coverage as part of their marketing strategy. South Korean and Hong Kong each have about 90-95 percent of their country covered under LTE connections.

LTE is slowly taking hold in the United States. US operators are not following the usual “charge as much as we can get” strategy. Instead, they are doing what has already been done in other countries. This appears to be a sound strategy with the opportunity for a great amount of growth.

The rapid building out of their networks and not charging a premium for the service is what is attracting U.S. subscribers to their LTE networks. However, this does not mean that all of the networks are either successful or that the operators are all following the same strategies. The operators focused on LTE’s speed benefits while being able to keep their 3G prices. This is what initially enticed users to the new network.

Operators such as AT&T and Verizon offer affordable pricing by going the route of multi-device packages. Instead of charging more for LTE services, they are creating data packages that allow the user to add devices for a nominal fee. A plan that apparently is working for both, as AT&T sees 25 percent of its users having multi-device packages and 23 percent for Verizon.

You can read more details about an Analysys Mason’s Viewpoint, LTE lessons from market place leaders in the USA on Mobility Techzone

Edited by Brooke Neuman

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