Author: Maniam Palanivelu on March 4, 2013 Category: 4G LTE, Business Modeling, Mobile broadband, User Demand, User experience

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4G LTE is here and the operators early to market are reaping the rewards

By Maniam Palanivelu

Mobile data demand and usage are now at truly unprecedented levels worldwide. There are more people online than ever thanks to the growth of smartphones and they comprise a more demanding subscriber base than network operators could ever have expected!

Mobile connectivity has empowered a whole new generation of end-users, giving them access to apps, products, services, social networks and all their other online favorites in places previously unavailable to them. The consumerization of IT, proliferation of apps and the growth of smartphones and tablets have contributed to a user who wants desktop experience on their mobile and expects to be online, all the time, everywhere via text, IM, voice or video.

Thanks to the big leap in mobile access technology, service providers can finally give customers what they want – speed, quick response for interactive apps like games, fast-loading mobile internet, HD video, business productivity and a rich social media experience. 4G LTE has raised user expectation levels still further, and for service providers the race is on. There are massive business benefits to be had, new and increased revenues, enhanced brand perception and more – but fundamental to them all is speed of deployment and launching commercial service to the mass market.

As a case in point let us consider Verizon, one of the world’s largest mobile network operators. By deploying 4G LTE and related services early and getting to market fast, Verizon has been able to reap the rewards. Verizon’s 4G LTE network now extends coverage to around 274 million US subscribers across 480 cities – around 9 out of every 10 of the country’s population. As a result of this the provider has been able to increase service revenues by 7.7 per cent year-on-year (Jan 2013), increasing their overall smartphone penetration to 58 per cent and carrying half the traffic on the most efficient radio access technology – a compelling business case statistic. There are a number of other operators across the world who have witnessed increased net additions and customer satisfaction following the acceleration of their LTE plans.

Our Bell Labs business modeling experts have been able to analyze market data and trends to date along with projections using proven models to show the successful impact of 4G LTE on operator business models. The first movers again are those that will enjoy the most benefits, with operators who deploy 4G LTE just 6 months earlier than competitors able to realize a 51 per cent revenue gain across a 5 year period.

Mobile video is at the heart of the Quality of Experience (QoE) that the next generation user is demanding from 4G LTE services. The growth of YouTube and other similar online video streaming and hosting sites has been nothing short of extraordinary, with around 4 billion videos estimated to be viewed on YouTube every day. By 2016 one in every three Americans will watch video content on mobile devices, while ABI Research maintains that by 2016 more than half of total mobile data traffic will be generated by video. The day is not far off when video calls will become the norm for business or personal interactions. Service providers are now able to promote the use of video over mobile devices with 4G LTE without fear of the network crashing due to lack of bandwidth, resources and the high cost to carry the bits. 4G service also opens up new business models in industries that benefit from being connected to internet – healthcare, transportation, retail and more.

What does all of this add up to? Well in summary it means that operators need to get 4G LTE now and stay ahead of the demand. Our latest infographic (here) shows why and how mobile providers need to get on board the 4G LTE train right now. I hope you enjoy it and find it informative.

Maniam Palanivelu is Director, Global 4G LTE Solutions Marketing at Alcatel-Lucent.

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