Long Term Evolution Adoption Exceeds 3G Adoption Rates

Things change quickly in the telecom business. Consider the year 2003. That was the year the global inflection point happened for mobile adoption, and in fact, use of voice communications by billions of people in the developing world. In 2003, mobile adoption in sub-Saharan Africa and India was far less than 10 percent.

By 2009, mobile penetration in India reached 50 percent, after just six years. In sub-Saharan Africa, penetration hit about 52 percent in 2011, just eight years later. Now the GSMA (News - Alert) predicts fourth generation Long Term Evolution connections are being adopted faster than 3G had been adopted. That might not surprise too many, as 3G was not, initially, such a success, in many ways.

By 2017, the number of 4G LTE connections worldwide is forecast to pass one billion by 2017, representing 12.5 percent of total mobile connections of about eight billion.

In 2013, LTE will represent about 176 million connections, according to the GSMA. Some 20 percent of the global population now can buy LTE service. By 2017, LTE coverage will reach about half of all people. In the United States, LTE networks already cover more than 90 percent of the population, compared to 47 percent population coverage in Europe and 10 percent in Asia.

The United States currently accounts for 46 percent of global LTE connections, while three countries--the United States, South Korea and Japan--combined account for 80 percent of the LTE total today. But Asia is expected to account for 47 percent of all LTE connections by 2017.

As you would expect, LTE users consume more data than 3G users, about 1.5 GB of data per month on average, about twice the average amount consumed by non-LTE users. In developing economies, operators have noted that LTE users can generate ARPU seven to 20 times greater than non-LTE users. In developed markets, operators have found that LTE can generate an ARPU lift ranging from 10 percent to 40 percent.

That, in the end, is why LTE matters, for mobile service providers and providers of Internet access. LTE will be the most common method for people around the world to get access to the Internet, and the revenue to be earned from LTE access will be substantially higher than for 2G and 3G services.