TD-LTE rollouts, connections starting to snowball, say analysts

Recent reports from Dell'Oro Group and Juniper Research highlight the rampant rollouts of LTE networks worldwide and ongoing uptakes of LTE service by end users. Further, both firms are bullish regarding the growing importance of the TDD variant of LTE, particularly in emerging markets.

The market for LTE-based mobile radio access network (RAN) equipment, including macro cell and small cell radios, will close in on $22 billion by 2018, according to Dell'Oro Group. The research firm added that LTE RAN revenue levels over the next five years should outpace the RAN revenue peaks of GSM in 2007 and WCDMA in 2011.

"The momentum around LTE coverage build-outs and subscriber adoption is stronger than anything we have experienced with previous mobile technologies," said Stefan Pongratz, Dell'Oro analyst.

"The pace of the LTE radio deployments during the coverage phase and the variety of band combinations available for LTE is enabling service providers to deploy radios in multiple bands optimized for coverage and capacity. This is driving investments to remain high even after the initial LTE coverage phase," he added.

During the first quarter of 2014, the top LTE RAN vendors as measured by revenue were Ericsson (NASDAQ: ERIC), Huawei, Alcatel-Lucent (NYSE: ALU) and Nokia (NYSE:NOK), according to Dell'Oro.

The research firm predicts that total RAN market, including macro cells and small cells, will grow for a second consecutive year during 2014. However, it will then decline at a low single-digit compound annual growth rate (CAGR) between 2014 and 2018.

Dell'Oro expects more than 1 million macro radios, including those for remote radio heads, antenna integrated radio and active antenna systems, will ship in 2018 and will be configured using both distributed and centralized baseband architectures.

In addition, the TDD flavor of LTE is expected to account for some 40 percent of LTE radio-frequency (RF) carrier shipments during the 2014-2018 forecast period.

Earlier this year, Dell'Oro reported that the TD-LTE RAN market grew rapidly during the fourth quarter of 2013, thanks mainly to large-scale rollouts in China. TD-LTE RAN revenues exceeded $1 billion, accounting for more than one third of total FDD/TDD LTE revenues during 2013's final three months, the firm said.

Similarly, Juniper Research has forecast that deployments of TD-LTE in China, Japan and India will prompt increased network rollouts in other parts of the world.

"TD-LTE will play a significant role, especially in the emerging markets, pushed by China Mobile's need to support TD-LTE and accelerate its commercial deployment in China. There are 36 commercial TD-LTE networks and we expect active TD-LTE connections to demonstrate a higher annual growth rate when compared to FD-LTE," analyst Nitin Bhas.

In addition, the Global mobile Suppliers Association (GSA) said this month that 168 manufacturers have so far announced 1,889 LTE-enabled user devices. It noted that support for TD-LTE has significantly strengthened over the past year, and now 530 devices can operate in the TD-LTE mode.

Source: Global mobile Suppliers Association (GSA)

Juniper expects the Far East and China will account for most LTE service revenues by 2019. The firm noted that one in three smartphones shipped this year will be LTE-enabled, with manufacturers expected to ship more LTE-enabled devices relative to 2G/3G devices.

Juniper said active LTE connections will exceed the 1 billion mark in 2017 and reach 1.8 billion by 2019, representing 22 percent of global active mobile SIM connections by that time.

For more:
- see this GSA release
- see this Dell'Oro release
- see this Juniper release

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