Today LTE makes up about 5% of mobile subscribers across the Asia-Pacific region, with a heavy skew towards North Asia, where Korea has more than 70% and Japan has more than 45% on the new platform (compared to 38% in North America, and almost 10% in Western Europe). Asia-Pacific as a whole is expected to reach over 40% by 2020. This matters because faster speeds enable a wider range of content and encourage greater data consumption.
Two key challenges for the 4G evolution are 1) affordable handset availability and 2) network roll-out and coverage. With the explosion of low price but strong spec smartphones coupled with the combined boost from more capex and falling equipment prices, we see these
bottlenecks easing during 2015. We anticipate that smartphone prices could fall 40-50% over the next three years, boosting the uptake of 3G and 4G.
Technology migrations can be disruptive, due to capex requirements, cannibalization of existing cash cows and competitive land grabs, but while there will be winner and losers. Some forecasts show that Asia is expected to deliver the world?s fastest data traffic growth
from today until 2020 and to expand market share of global traffic from 40% to 50%. Korea, Japan, and Australia have led the moves to 4G and China and India are expected to drive the next stage of material volume growth, but data consumption is still held in check by a few factors, including the large 2G subs bases, network quality, and data costs to consumers.
