Telecoms to make more 4G revenue than 3G this year

4G revenue chart by Strategy Analytics
Telecom market research agency Strategy Analytics has revealed revenue forecast for 2G, 3G, 4G and 5G till 2022.

Strategy Analytics says telecom network operators globally will generate more revenue from 4G networks  networksthan 3G technologies in 2016.

The report, which will be an eye-opener for several telecoms, said that 4G will be accounting for 49 percent of revenue from a 25 percent share of year-end subscriptions.

4G revenue growth will be offset by a 21 percent decline in 2G service revenue and 19 percent decline in 3G revenue in 2016.

Telecom markets in the USA, Japan, and South Korea will generate vast majority of revenue from 4G LTE services this year, though China will also make a significant contribution.

Telecom strategies

Indian telecom operators such as Vodafone, Telenor, Tata Docomo, BSNL, MTNL, etc. have limited or almost nil presence in the 4G space. The report from Strategy Analytics will be an eye opener for

Reliance Jio Infocomm is in the process of making $20 billion investment in 4G networks in India. Bharti Airtel, which has 4G presence in more than 500 markets, will be buying spectrum from Videocon Telecom and the Maxis-owned Aircel.

Vodafone recently said it will be going slow on its 4G investment in India. Vodafone India has limited presence in the Indian 4G services market.

Telenor is yet to express interest in buying 700 MHz spectrum during the forthcoming auction. Recently, Telenor CEO warned that the high cost of spectrum would prompt the European telecom operator to exit from India due to lack of adequate support from the Indian Government.

China to get +50% revenue from LTE

“Overtaking the USA to become the world’s largest 4G market in Q3 2015, China is the envy of other developing markets with over half of its 2016 revenue projected to come from 4G LTE,” said Phil Kendall, executive director Wireless Operator Strategies.

Wireless service revenue will peak in 2019 at $882 billion, just 3 percent above the level reached in 2015 as competitive and regulatory pressures undermine growth opportunities from new connected devices.

The 4G share of 2016 service revenue will range from 10 percent in Middle East & Africa to 79 percent in North America, with Japan (82 percent) and South Korea (90 percent) at similarly high levels.

4G LTE networks have 1.9 billion connections by the end of 2016 from 1.1 billion connections in the starting of the current year.

The number of 4G LTE networks connections will be 5.6 billion by the end of 2022, 62 percent of all user-linked wireless subscriptions.

User-linked 5G connections will grow from 2 million in 2020 to 116 million in 2022, with modems and routers driving early volume.

“Commercial 5G services will begin in a small number of markets in 2020, mainly in the USA and advanced Asian markets,” said Susan Welsh de Grimaldo, director of Wireless Operator Strategies at Strategy Analytics.

Will the telecom market report prompt Indian telecoms to revise their current strategies and allocate more funds towards making investment in 4G networks?

Baburajan K
[email protected]