#1 – LTE to reach 50% subscriber uptake in multiple European markets

Summary: Given the availability of infrastructure, devices and improved regulation, European operators are now in a good position to push for and boost LTE – Northstream believes this will happen and that the LTE subscriber share in multiple European markets will reach close to 50% before 2014 comes to an end.

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By end of 2013, most operators in Europe have LTE networks in place and have launched their LTE services in one or more frequency bands. A notable number of these have been launched during 2013. The 2600 and 800 MHz bands have been released in a majority of countries, and in combination with the widespread regulatory decision of allowing LTE in the 1800 MHz band operators have the means to offer both high level coverage and high capacity to their subscribers. The past years’ network modernisation with MSR as default pave the way for faster LTE service deployment in new spectrum bands, and operator initiatives like e.g. Vodafone’s Project Spring will further strengthen the LTE coverage and capacity.

All major device suppliers are now supporting LTE bands in Europe: Samsung, Apple, Microsoft/Nokia, HTC, and Sony. The release of iPhone 5S was the last piece to complete the LTE device availability portfolio in the European markets. And even though the highest LTE subscriber penetration today is a mere 12% (Telenor Norway, Nov 2013), the rapidly increasing share of LTE-enabled devices caters to possible penetration figures over and above 50% by the end of 2014.

In addition, network sharing agreements will further accelerate operators’ LTE service roll-out, enabling shorter time to market and improved grid density while at the same time lowering both CAPEX and OPEX levels. To this effect, an increasing number of operators have already established or are seeking to establish network sharing agreements with each other. And not only that, but LTE roaming enabled by more European operators will be launched in 2014, which will strengthen the environment for LTE uptake.

Northstream further predicts that as operators see the benefits of off-loading the 3G networks they will abandon flat data pricing in favour of data buckets and/or per services pricing and that differentiation between 3G and LTE on the subscription level will no longer be practiced.

Based on the above, Northstream believes that the availability of LTE infrastructure and services, spectrum and LTE devices, in addition to all LTE enabled devices already sold the past year, will build the ground for a true and fast take-up of LTE users, and where the subscriber base will reach up to 50% in multiple European markets.

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