Press release: Verizon’s successful LTE launch has changed the US competitive landscape

US is the dominant LTE market worldwide with 63% of total global LTE subscribers

The US will be the top LTE market globally by subscriptions through 2015, when it will be overtaken by China according to the latest forecasts from Informa Telecoms & Media. By 2016, there will be 100 million LTE subscribers in the US compared to 613 million LTE subscribers worldwide. This accelerated growth has been driven, in part, by Verizon Wireless’ early commercial LTE launch in December 2010, which will have more than 4 million LTE subscribers at end-2011, representing 63% of total global LTE subscribers.

“Although 26 operators worldwide have launched LTE networks, Verizon stands out with more than 3 million subscriptions in 3Q11, putting it on track for more than 4 million by year-end. That will represent 63% of total global LTE subscriptions of 6.4 million at end-2011,” says Mike Roberts, principal analyst at Informa Telecoms & Media.

LTE has already changed competitive dynamics in the US. Since launching LTE in December 2010 and the iPhone in February 2011, Verizon has gained market share on AT&T and most other US operators apart from MetroPCS, which launched LTE in September 2010. “Verizon has increased its share of US mobile subscriptions from 31% in 4Q10, when it launched LTE, to 33% in 2Q11,” Roberts says. “That’s a huge swing in six months, particularly in a mature market such as the US.”

While the iPhone was the larger driver of Verizon’s share gains early in 2011, LTE is accelerating and will be the key driver from 2012 onwards. “Verizon has added around 2 to 2.3 million iPhone subscriptions every quarter in 2011, but new LTE subscriptions nearly tripled from 500,000 in 1Q11 to 1.4 million in 3Q11,” Roberts says. Looking at a different metric, LTE accounted for 53% of Verizon’s total postpaid net subscriber additions in 3Q11, up from 30% in the second quarter. “The bottom line is Verizon is increasing market share, subscriptions and revenues with LTE.”

Verizon may have secured an early lead in the LTE market but its rivals are racing to catch up, most recently AT&T which launched LTE in September 2011. Sprint has also just announced plans to launch LTE in mid-2012, and to migrate its 4G WiMAX subscriptions to LTE. “With all the focus on Verizon’s LTE launch, it’s important to remember that Sprint is actually the 4G leader in the US, with near 8 million 4G WiMAX subscriptions in the third quarter – more than double Verizon’s LTE subscriptions.”

Among other major operators, Leap Wireless is launching LTE in December 2011 and US Cellular plans to launch in March 2012. MetroPCS was the first operator in the US to launch LTE, in September 2010. In addition, AT&T says it will expand its LTE coverage if its acquisition of T-Mobile USA is completed.

However the US is the exception rather than the rule in the global LTE market. “LTE has taken off in the US due to a unique combination of high mobile broadband penetration, early availability of choice spectrum, and the need for CDMA plays to deploy LTE early to gain a new competitive edge,” Roberts says. LTE takeup in other markets is much slower, which has led many operators worldwide to delay their plans for LTE launches until demand and the business case are clearer.

That helps to explain why the US will be the top LTE market globally through 2015, when it will be overtaken by China. “The US will also hit the milestone of 100 million LTE subscriptions in 2016, when there will be 613 million LTE subscriptions worldwide,” Roberts says.

Informa’s Analysts will be discussing this and other hot topics at the LTE North America event in Dallas. For more information please visit: http://americas.lteconference.com/

About LTE North America
Now in its 4th year, LTE North America 2011 has firmly established itself as the ultimate ‘learning conference’ of the North American region, bringing together the leaders of the entire LTE ecosystem for unparalleled breadth and depth of discussion around the future of mobile broadband.

About Informa Telecoms & Media
Informa Telecoms & Media is the leading provider of business intelligence and strategic services to the global telecoms and media markets. Our aim is to provide actionable, strategic advice and forecasting on all aspects of the music, mobile and fixed, entertainment markets.

© Informa UK Ltd 2011. All rights reserved.

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Denise Duffy
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