Long-Term Evolution (LTE), popularly known as 4G LTE and the most sought after, next-generation (4G) super-fast wireless communications technology, is gaining rapid momentum worldwide. 4G wireless networks primarily aim to cope with the substantial rise in demand for high-speed wireless data services and mobile video.
According to a recent research report published by Ovum for industry association 5G Americas, the market share of LTE connections compared to all other mobile wireless technologies reached 28% at the end of the first quarter of 2017, marking a rise of 11% over a year. Out of a total of 7.7 billion total cellular connections worldwide, total LTE connections were 2.16 billion in the first quarter. This marks the addition of 863 million new LTE users in a year, with 40% year-over-year growth from the first quarter of 2016.
LTE connections are estimated to increase up to 2.5 billion connections by the end of 2017, 3 billion in 2018 and 4.2 billion connections in 2020. By 2021-end, LTE connections should get to 4.7 billion (forecast includes Machine-to-Machine) and LTE global market share is projected to reach 53%.
Now let’s take a look at how LTE connections have grown in different regions:
North America: The LTE network has the highest penetration rate of 85% in North America with 308.5 million LTE connections, reflecting the gain of 55 million LTE customers from the first quarter of 2016 to the first quarter of 2017. Western Europe has a LTE penetration rate of 37%, while Oceania, Eastern and South-eastern Asia boast 67%. In North America, LTE penetration is expected to exceed 100% in 2018. By end-2021, LTE connections should reach 452 million (including Machine-to-Machine) and 5G connections will likely hit 11 million with a market share of nearly 44% of all global 5G connections.
Latin American and Caribbean: In this region, the LTE market share grew 100% from 9.7% to 20% on a year-over-year basis at the end of Mar 2017. LTE connections rose 16.5% in just one quarter. The LTE penetration rate surpassed 20% regional penetration with 140 million LTE connections, reflecting a rise of 71.2 million year over year.
By the end of 2017, LTE connections should reach 171 million (inclusive of M2M) and LTE global market share 24%. By the end of 2021, LTE connections should scale to 449 million (inclusive of Machine-to-Machine) and LTE global market share should hold 58%.
Others: Comparatively, Central and Southern Asia saw the fastest year-on-year growth in the first quarter of 2017 with a rate of 1,804%, while Africa, Eastern Europe and the Middle East grew over 100% in the past twelve months.
Earlier, research on 4G in the Americas had stated that the latest version of LTE-A network, which is popularly known as LTE-Advanced Pro (3GPP Release 13), will be a major step toward the smooth transition from 4G to the upcoming 5G network standard. In the U.S., all four national telecom operators, namely, Verizon Communications Inc. (VZ – Free Report) , AT&T Inc. (T – Free Report) , T-Mobile US Inc. (TMUS – Free Report) and Sprint Corp. (S – Free Report) have deployed LTE-A networks and are working toward the deployment and launch of 5G wireless network. Among them, Verizon seems to have the lead as evident from its initiatives to conduct 5G wireless network trials in 11 U.S. cities and plans to deploy its fixed wireless version in 2018.
All the four stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5G, which marks a revolution in the field of communications, is expected to accumulate connections starting 2020. By 2021, there should be 25 million 5G connections worldwide. Moreover, 5G mobile handsets will be available for sale in the market by 2020, following a broader rollout of the technology.
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