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LTE handset shipments to increase tenfold this year

Pricing is the key to success
Fri Mar 23 2012, 16:46

HANDSETS supporting Long Term Evolution (LTE) networks will see a tenfold increase in shipments during 2012, however there will be hurdles to overcome in UK adoption.

Analyst outfit Strategy Analytics claims shipments of phones that support LTE networks will hit 67 million units in 2012, 10 times the number shipped in 2011. However the firm told The INQUIRER that there are hurdles that must be overcome before LTE networks will be deployed in the UK.

Scott Bicheno, senior analyst at Strategy Analytics told The INQUIRER, "The evidence of countries that have already rolled-out LTE is that both operators and handset vendors are keen to get LTE products to market as soon as the network can support them. However, as the response of some UK operators to the recent Ofcom 4G announcement implies, there are still some hurdles to overcome before LTE is rolled-out in the UK."

Bicheno referred to the recent go-ahead that Ofcom gave Everything Everywhere to use part of its 3G spectrum for LTE deployment. That decision led to criticism from Vodafone, which claimed it would give the rival firm an unfair advantage.

However Tom Kang, director at Strategy Analytics said that LTE deployment won't be without its problems. "The LTE phone segment is expanding at a rapid rate this year, but there will undoubtedly be growing pains in this early phase. Many LTE phones and data plans will be relatively expensive, which means operators will need to invest generous subsidies to make 4G more affordable for subscribers. Meanwhile, consumers will be concerned about LTE usability issues, such as shortened battery life, excessive device weight or sudden bill shock caused by high data consumption," said Kang.

Although Kang correctly pointed out that mobile operators need to make data plans affordable in order to push LTE adoption, Bicheno said that once LTE networks are deployed, LTE handset sales will grow quickly. "The research summarised in our announcement shows a rapid growth in LTE phone shipments in those countries - such as the US, Japan and South Korea - which have rolled-out LTE networks, so the cadence would need to be measured in months rather than years. We expect the 'growing pains' detailed by Kang in our press release to apply across all geographies," said Bicheno.

Strategy Analytics' figures suggest that there is an appetite for LTE in those countries that have it. Handset makers need to sort out battery life and consumers will need to be convinced that LTE will not only produce a step-change in mobile performance but also have adequate coverage. µ


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