Dell'Oro: Ericsson, Alcatel-Lucent lead surging LTE gear market

The LTE Radio Access Network equipment market is surging, with revenues tripling in the second quarter compared with a year ago, according to a new report from research firm Dell'Oro Group. According to Dell'Oro, Ericsson (NASDAQ:ERIC) and Alcatel-Lucent (NASDAQ: ALU) continue to lead the market.

The news makes sense given the growing number of carriers deploying LTE across the globe. Dell'Oro counted 85 commercial LTE deployments at the end of the second quarter, up fourfold from the year ago-period. TDD-LTE accounted for 9 percent of LTE revenue in the quarter, Dell'Oro said.

Nokia Siemens surpassed Huawei as the No. 3 LTE vendor in the quarter, Dell'Oro said, with Samsung holding the No. 5 spot. Huawei and ZTE continued to lead the TDD-LTE market. Importantly though, the report indicated that despite rising LTE spending, the gains in LTE are not yet offsetting slower 2G/3G spending; the total mobile RAN market declined 18 percent in the second quarter.

Dell'Oro counted 28 million total global LTE subscribers. The overwhelming majority of those subscribers come from the United states, South Korea and Japan; indeed, Verizon Wireless (NYSE:VZ) alone counted 10.9 million LTE connections at the end of the second quarter.

"LTE continued to be the bright spot for the infrastructure vendors as operators slowed down their 2G/3G investments. It is basically the only technology that grew in the second quarter," said Stefan Pongratz, an analyst at Dell'Oro. "In addition to the North American and South Korean operators deploying LTE at full speed, there are signs that revenues are starting to materialize in other parts of the world. For instance, LTE revenue share from regions outside of North America increased more than six percentage points" in the second quarter.

Separately, Dell'Oro said that spending for Voice over LTE technology during the past four quarters exceeded $200 million. The spending went toward devices such as IP Multimedia Subsystem (IMS) Cores and Telephony Application Servers. MetroPCS (NYSE:PCS) and South Korean carriers SK Telecom and LG U+ were among the first to launch commercial VoLTE service.

Verizon will add VoLTE capability to its network later this year. AT&T Mobility (NYSE:T) plans to have VoLTE in place by 2013, and Clearwire (NASDAQ:CLWR) has said it will offer VoLTE when it launches its TDD-LTE network by the middle of 2013. T-Mobile USA, which has not previously indicated an interest in supporting VoLTE, has reportedly begun hiring experts in the area.

For more:
- see this Dell'Oro release
- see this separate Dell'Oro release

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