LTE networks will become more ubiquitous and popular in the years ahead, with the number of LTE subscriptions ballooning from around 210 million this year to around 387 million in 2020, according to a new report from research firm Strategy Analytics.
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Those figures include connected consumer electronics like cameras, video game consoles and smart watches that may be tethered to smartphones. Still, it represents a 13 percent expected compound annual growth rate and the report's forecast indicates that as the U.S. market matures even further, carriers are going to focus on getting more connected devices into consumers' hands--and more revenue as a result.
Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T) have largely completed their macro LTE buildouts, while Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) are expected to largely finish theirs this year. Strategy Analytics analyst Susan Welsh de Grimaldo told FierceWireless that the research firm expects carriers to focus on getting that inbuilding coverage and making their networks more dense to spur greater adoption of LTE. "Getting high-quality LTE available to more subscribers to get the upgrades," will be a key focus, she said, in a push that likely will be a boon to small cell providers.
Overall, while subscriber growth has slowed, Strategy Analytics expects that nearly 100 million wireless connections (including consumer electronics connections but excluding M2M) will be added through 2020, reaching a 128 percent penetration rate of the US population by then.
Currently, the carriers are focused on "upgrades, upsell, customer satisfaction and expanded user experience on mobile devices," the report noted, adding that carriers are increasing their focus on content and value-added services in bundled plans and international communications (including roaming and calls/texts from the U.S.). Further, the carriers see growth segments such as small- and medium-sized businesses, Latinos and millennials and are creating targeted offers for these groups to both reduce churn and attract new subscribers.
Despite challenges from Sprint and T-Mobile, Verizon and AT&T are expected to maintain their market lead in the years ahead, the report said. There will also be continued consolidation and declining market share of regional Tier 2 and Tier 3 carriers, many of which have already been acquired by the Tier 1 carriers.
Welsh de Grimaldo said that carriers are going to increasingly focus more on enabling new services, especially video, and less on pure connectivity. She said that the market is already seeing glimmers of this with Verizon's forthcoming mobile-first, over-the-top video service and AT&T's purchase of DirecTV (NASDAQ: DTV).
"You really need to create offers and opportunities that's not a one-size-fits-all opportunity," she said, adding that carriers are going to be "going after different types of users and needs."
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