Why is LTE technology seeing a faster adoption rate?



LTE adoption increases fast across the world

Telecom carriers across the world are in the middle of replacing their 2G/3G technology with the high-speed LTE technology. This transition is almost complete in major markets such as the US, Korea, and China. In the US, about 79% of total data traffic on Verizon (VZ) is carried on its 4G LTE network. And according to AT&T (T), its LTE network now covers more than 300 million people across the US.

Although it’s the third-largest telecom provider in the US, Sprint (S) is facing networking headwinds. As a result, it’s also facing significant customer churn. The company is hopeful that it will be able to resolve those issues soon. Market Realist covered this issue in detail in an article titled Why Sprint has seen an improvement in its network performance.

Similarly, China Mobile (CHL), the world’s largest telecom provider, plans to completely roll out LTE by the end of this year.

Mobile LTE connections

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Majority of LTE growth will come from emerging markets

According to a report from GSMA Intelligence and as the chart above shows, the total number of LTE connections across the world should increase from 0.4 billion in 2014 to 2.5 billion in 2020. The report also mentions that 60% of 4G LTE connections will come from developing regions in 2020, up from only 5% in 2013. This growth will be largely driven by China.

This is why Apple (AAPL) is bullish about China despite weaker results in the last quarter. Apple is the third-largest player in China’s LTE market. We discussed this in a Market Realist article titled Why Samsung is losing share in China’s LTE smartphone market.


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