The changing behaviour of users in the LTE era

Regular readers will know of my "late-adoption" status when it comes to LTE. Yes, I finally have an LTE-capable phone, but my provider (Orange's Sosh brand) does not yet offer LTE services. This situation will no doubt change in time, and I'm not in any rush, but those in the know tell me that when I have LTE, I will wonder how I ever lived without it.

Indeed, LTE adoption is growing at a pace that is considerably faster than the move from 2G to 3G, according to recent research from the GSM Association. The GSMA predicts that there will be 1 billion LTE connections globally by 2017, when LTE networks will also be available to half of the world's population.

Considering there will only be around 176 million LTE connections by the end of 2013, this would represent pretty staggering growth within a four-year timeframe. Hyunmi Yang, chief strategy officer at the GSMA, attributes the rapid adoption to various factors including the arrival of lower cost LTE smartphones (not the iPhone 5s then!) and the efforts mobile operators have been making to provide more innovative tariffs that also include content.

Indeed, the penny seems to be dropping that content is essential if high-speed services such as LTE are to make sense to many consumers--a lesson that seemed to take a long time to learn in the 3G era.

It is also becoming increasingly clear that the drivers of LTE are moving beyond the traditional Western markets. Indeed, of the 1 billion forecasted connections, the GSMA predicts that 20 per cent of these will be in Europe compared to a whopping 47 per cent in Asia. Nonetheless, the 20 per cent in Europe compares favourably to the 9 per cent registered for 2013 and of course Europe accounts for just 11 per cent of the world's population compared to Asia's 60 per cent.

China is set to play a dominant role in the growth of LTE subscriptions in Asia, and this means that LTE based on time division duplex (TDD) rather than frequency division duplex (FDD) is also set to play a much bigger role in the market.

In the 3G era, TDD always seemed a bit of an afterthought, and operators in Europe certainly never seemed to know what to do with that bit of TDD spectrum they acquired along with their FDD bands.

Now, China and India are largely responsible for the changing fortunes of TDD LTE: China Mobile is set to launch its TD-LTE services on a commercial basis from Dec. 18 and will sell the services under the brand "He," meaning harmonious in the Chinese language, according to the Shanghai Daily.

According to the GSMA forecasts, TD-LTE connections as a proportion of total LTE connections are expected to increase from 3 per cent in 2013 to 15 per cent in 2017, with the remainder being FDD. Out of the total 1 billion LTE connections forecast by 2017, that's 150 million TD-LTE connections. This proportional increase will be mainly due to the upcoming launches in China.

Whatever LTE flavour operators choose, TDD and FDD LTE seek to offer the same thing: faster mobile data speeds. Already with the relatively small number of LTE connections today, changes are being observed in user behaviour.

For example, the GSMA quotes Sanjay Kapoor, Airtel's CEO for India and South Asia, as saying that its TD-LTE service "definitely has a wow offer."

"Right now we are able to offer 40 Mbps of download and 20 Mbps of upload speed," Kapoor said in October 2012. "The icing on the cake is that the customer pays us around $20 ARPU." The GSMA estimates this to be seven times more than ARPU from non-LTE users.

A new report carried out by TNS on behalf of Orange has also revealed early signs that consumer behaviour is evolving as a direct result of the introduction of LTE--fuelled by faster download times and greater bandwidth.

The Orange Exposure study found that not only are LTE users consuming more content--for example 30 per cent of U.K. LTE users regularly use their mobile to download videogames, compared with 17 per cent of their 3G counterparts--they are also using more of the phone's functionality, such as downloading video, and using geolocation.

Clearly, research presented by the likes of the GSMA and Orange into LTE adoption and usage is unlikely to provide a negative picture. A lot of LTE networks are still to be rolled out and expanded, and the hype around "4G" has in some cases proved misleading and offputting to users.

Whether we will see 1 billion users by 2017 remains to be seen, but there is no doubt that momentum is growing.

Time for me to subscribe and see what all the fuss is about.--Anne

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