According to a new report from Juniper Research, worldwide service revenues generated by LTE mobile networks are forecast to grow rapidly once networks are launched, exceeding $265 billion by 2016. Whilst the total number of LTE consumer subscribers will be higher than enterprise in 2016, it is a different picture from a revenues viewpoint, with the consumer segment accounting for under half of total revenues.
The introduction of premium service tariffs to provide high end enterprise users with required guaranteed connections and/or service levels was identified as key to derive incremental revenues for LTE.
The new 4G LTE Strategies Report found that early LTE adopters will be “top end” users who are currently in the higher echelons of monthly spend. This will be the case in developing countries as much as in developed countries. Report author Nitin Bhas added: “We believe that high end enterprise users in developing countries will be much closer in spend to similar users in North America or Western Europe and certainly very distinct from the bulk of the population that contribute towards the high level regional ARPU levels for all generations, including 2G.”
In its benchmark report, Juniper Research examines the LTE revenue opportunity, evaluating four service pricing scenarios and three business models based on service usage. High traffic subscribers using video, web and email services will be the critical early adopter segment to benefit from LTE. All scenarios demonstrated the potential to generate incremental revenues and ARPU.
Other findings include: LTE enterprise ARPU is forecast to experience lower rate of decline than consumer ARPU; Western Europe, North America and Far East & China will account for approximately 84% of total revenue worldwide by 2016; LTE service revenue to represent in excess of 26% of total service revenues from all mobile services across all generations by 2016.