Informa: 188.6 million 4G subscriptions worldwide at end of 2013, rising to 1.3 billion at end of 2018: USA leads way

UPDATE: New data from Informa forecasts that LTE subscriptions, commonly marketed as fourth generation or 4G, will reach 188.6 million at the end of 2013. This will grow annually at 44 percent to reach 1.3 billion by the end of 2018.

The US will lead the march towards 4G with 89.8 million LTE subscriptions at the end of 2013, rising to 242.1 million at the end of 2018, with an annual growth rate of 22 percent.

4G brings improvements to data services – such as surfing the Web – in terms of speed, latency and quality. But Paul Lambert, senior analyst at Informa Telecoms & Media, warns operators against charging a premium for the service (see below):

“By enhancing the end-user experience of accessing the Internet on the go without charging more for access, successful LTE operators are seeing that people use Internet services while mobile more than they did over 3G.

Informa: 126 million 4G subscribers worldwide. USA, Japan and South Korea lead with 88.6 percent of global 4G subscriptions

Original Article, published: 01 November, 2013:

The USA, Japan and South Korea lead the world’s top ten countries for adoption of 4G mobile data services. These three countries account for a stunning 112 million of the global total of 126 million 4G subscribers in Q2 2013, according to the latest stats supplied to mobiThinking by Informa. The USA has the most 4G subscribers with 62.5 million, but South Korea has the highest penetration with a very impressive 47 percent of subscribers on 4G.

The dramatic growth in the number of 4G subscribers in these three countries is attributable to the fact that no mobile network operator in the USA, Japan or South Korea charges a premium to give customers access to their 4G high-speed data networks, points out Paul Lambert, senior analyst for operator strategies, Informa Telecoms & Media. Pricing 4G at a similar price point to 3G services brings major benefits to operators in terms of increased data usage, higher data revenues and a reduction in churn (customers leaving for other networks).

Lambert believes that charging customers extra for 4G discourages adoption (read his comments in full below). Currently only two of the top 20 mobile operators by 4G subscribers charge a premium. These are EE in the UK and Optus in Australia. While Australia has 16.8 percent 4G penetration, the UK has a pitiful 1.8 percent.

4G stands for fourth-generation – this term is used to describe high-speed mobile data network, usually based on mobile network technology called long-term evolution (LTE) technology – most common – or WiMAX (Worldwide Interoperability for Microwave Access). 4G networks deliver data, such as Web pages, emails, music or video, much faster than 3G or Universal Mobile Telecommunications System (UMTS) networks, which in turn were much faster than 2G GSM networks. The first 4G network was launched by TeliaSonera Sweden in December 2009, according to 4G Americas.

China has the most 3G subscribers in the world. In Q2 it had 325.5 million according to Informa – that’s more people than live in the US. In fact, growth of 3G subscribers is so phenomenal that if you look at the latest stats from the Chinese operators, by August 2013 this total had reached 359.9 million. If China (together with other populous Asian countries) starts to adopt 4G at a similar rate to 3G, the cost of the new infrastructure required by operators should start to fall, thus accelerating the build out of 4G networks worldwide.

Global mobile 4G and 3G subscribers in Q2 2013: Informa
Country 4G subscribers
Q2 2013
4G Penetration Launch date   Country 3G subscribers
Q2 2013
3G Penetration
Global 126 million 1.77% Q4 2009   Global 1,750.3 million 24.55%
USA 62.5 million 19.61% Q4 2010   China 325.5 million 24%
Japan 26.1 million 20.67% Q4 2010   USA 225.0 million 70.6%
South Korea 23.0 million 47.17% Q3 2011   Japan 111.5 million 88.3%
Australia 3.9 million 16.76% Q3 2011   India 88.5 million 6.9%
Canada 2.3 million 6.7% Q3 2011   Brazil 77.2 million 38.6%
Singapore 1.2 million 22.9% Q2 2011   Italy 55.1 million 90.5%
Sweden 1.1 million 11.2% Q4 2009   Indonesia
46.1 million 18.7%
Russia 0.9 million 0.64% Q3 2012   UK 45.8 million 72.6%
Germany 0.9 million 1.06% Q4 2010   Turkey 45.7million 60.6%
UK 0.7 million 1.77% Q4 2012   Germany 45.1 million 55.1%
Source (4G/3G data): Paul Lambert, Informa (Q2 2013)
Source (launch dates): 4G Americas
  via: mobiThinking

Paul Lambert, senior analyst, operator strategies, Informa Telecoms & Media, says:

“This data highlights that mobile broadband growth is a global phenomenon. Driving this growth is a combination of operator commitment to mobile broadband growth and device availability at all prices points.

“4G subscription numbers are showing strong growth globally, especially in developed markets such as the US, Japan and South Korea. This is because as operators expand 4G network coverage and as a range of 4G devices at different price points become available, operators in these markets don’t charge a premium for 4G. Pricing 4G access the same as 3G has proved to be the most effective way to increase 4G subscription numbers. Operators that have done this have seen an increase in data usage, higher data revenues and a reduction in churn. This demonstrates that 4G, if launched in the right way, can positively affect key performance indicators (KPIs).

“The growth in mobile broadband subscriptions in emerging markets shows that operators and device vendors are beginning to tap the considerable opportunity they have to increase the use of mobile data among lower-ARPU subscribers, often in rural areas. Operators and vendors are successfully targeting these users by offering price plans that encourage mobile broadband use with devices that offer a good user experience. As operators in India and China launch and expand 4G networks, the size of these markets will mean that 4G subscription growth in them will have a considerable knock-on effect in other growth markets because it will bring the cost of equipment down, accelerating 4G growth in markets worldwide.

“Only Optus and EE charge a premium at the moment among the top 20 LTE ops by subscriptions. The key trend is to launch LTE without a premium, or move to no premium a few quarters or so after launch. Charging 4G at a premium soon after launch has been done to sign up the most price-inelastic – premium – users, and as the network is developed then we see pricing come down. Operators in developing markets are more committed to the premium approach, although even these operators will need to reassess this pricing approach to encourage 4G subscription uptake.”

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