4G LTE network rollouts have been underway in many regions such as North America, North Europe, Japan, Korea, Australia, etc in past 3-4 years. Many of LTE development are studied and reported and have observed interesting market or customer behaviors as following:

Fast - Fast LTE Adoption

LTE adoption in leading operators is amazing fast. In USA, Verizon is the first operator to launch 4G LTE on December 5, 2010 and is leading industry in 4G LTE adoption ever since. Its initial LTE development is 8 months faster compared to its 3G. Verizon reports strong and continuous growth every quarter since the launch. Its most recent earning report 9.0M 4G LTE devices activations in Q4, 2013 alone that has increased its total LTE devices to 42.7M. LTE now counts for 44.1% of retail postpaid connections. In Japan, NTT docomo report initial LTE growth is 11 months faster than its 3G deployment and closed to 20M subscribers by the end of 2013.

High - High LTE Traffic and High LTE ARPU

4G LTE drive up user data usages significantly and leading operators report average data usage reach 1 GB. For example, NTT DoCoMo report its LTE smartphones consume 9 times traffic more than 3G users. In Korea, LTE users increase 141% of data traffic compared to their 3G usages. SKT LTE ARPU is 44% higher than overall ARPU. CSL of Hong Kong claims its LTE users consume 2 to 5 times of data traffic than its 3G users. More importantly, users are willing to pay for it. Based upon Deloitte’s Global Mobile Consumer Survey, 41% of subscribers in USA indicate that they would be willing to pay more for substantively faster wireless speeds Verizon retail postpaid ARPA (Average Revenue Per Account) has grown to $157.21, up 7.1% Y/Y. NTT DoCoMo LTE brand, Xi, ,is US$8 higher in ARPU than its 3G. Korea SKT LTE is US$27.5 (58%) higher in ARPU than 3G.

More - More Devices, More Apps and More Video

More Devices

As portable devices such as smartphones, tablets or digital cameras are getting cheaper, consumers are buying more devices these days, with a growing number of these being mobile internet connected. Figure 1 shows average number of devices owned by respondent in different countries based upon Deloitte global mobile consumer survey. High-speed LTE further enhance mobile internet connection and enrich user experience. It is expected of continuing growth in both the number of LTE users and the number of LTE-enabled devices .

More App usages

The fast global uptake of smartphones has completely changed the way we communicate and use the internet. We have entered a new phase of rapidly diversifying smartphone use, and people are looking for apps across all sectors of society to improve their everyday lives. Demand for new mobile services could potentially transform all aspects of city life. Consumers believe that mobile services can enhance satisfaction when comes to activities such as shopping, eating at restaurants and leisure activities. They can also alleviate dissatisfaction with areas like child daycare and elderly care, communication with authorities, and transportation. Figure 2 shows IM a preferred App worldwide. This mass demand for new ICT services or App could change everyday life beyond what we recognize today.

More Video

Mobile video is becoming one of the most popular and widely growing services. This is mainly due to the advent of large-screen smart phones, mobile-connected tablets, high speed MBB such as LTE, and more readily available video contents. There are now more people intending to buy tablets rather than desktop PCs for home computing. Since mobile video content has higher bit rates than other mobile content types, it contributes to much of the mobile traffic growth. Up to 60% of all data traffic is now video traffic in some regions of the world, as reported by mobile video optimization specialist Bytemobile, Other sources project that video will account for 71% of data traffic by 2016.

Emerging LTE Opportunities

In the era of digital economy and social networks, mobile carriers are facing challenges of constantly evolving industry, changing market and customer demands. Mobile carriers must monitor market situations closely, adjust business strategy, design and deliver products, services or customer offers with innovation and agility.

Consumers

LTE offers high performance, and compares favorably with fixed broadband (FBB). It has the additional advantage of providing mobility. This has a significant impact on user experience and satisfaction. User behavior is changing with the availability of LTE. Users can now watch live video outdoor with mobile devices by using LTE, and continue to watch the video when they are at home. Operators already providing IPTV and OTT video services on their FBB network will be able to leverage their existing IPTV platform to deliver high-quality video content to their LTE subscribers through unicast and broadcast services. Video is recognized as the most important LTE service. The rapid development in LTE video will allow subscribers to enjoy video contents seamlessly with multiple screens anywhere at any time. It will enable the users to share their feelings through social networking services, and search for information in video format more readily.

Consumer-oriented mobile video focuses on entertainment and social networking, and the applications are mobile TV, video on demand (VoD), push video, video sharing, video messaging, mobile advertising, social networking, etc. The forecast is that video or streaming content would increase from less than 50% to more than 68% of total traffic.

Enterprise

Consumers are adding portable devices and taking to the work. Many of them would prefer to use their devices to conduct both personal and business tasks such as receiving or replying emails, reading or editing company memo or documents, etc. Recognizing the trend, companies are implementing BYOD policies – providing reimbursement and support for employees to use personal devices. In USA, 45% of companies have BYOD policies. 51% of employees who work where BYOD policies are offered primarily use their personal device on the job, especially those male and young employees. With mature BYOD technology and products, BYOD policies are now provided by enterprises that lead to:

Enterprise employees which have BYOD policies from their companies are adopting LTE as one of networks

SME is taking advantage of LTE data sharing plan as their business networks

Toll free data plan for business web site access free of charge

Home

Fixed-mobile convergence is beginning to occur. Video contents will be made available as cloud services. By using both IP video and LTE video services, the operators can deliver video content to the subscribers wherever they go, with any screen: TV, desktop PC, laptop, tablet or smartphone. LTE offers the promise of policy-based, fixed-mobile convergence for real-time applications such as VoIP, push-to-talk dispatch, messaging enhanced with video clips and even two-way video telephony. Unlike 3G, LTE changes to a policy-based QoS mechanism to better support both real-time and non real-time video applications.

Industry

LTE video offers many new business opportunities to the operators. The operators can introduce services such as live TV, push VoD, push advertisement, video sharing, video messaging, video downloading, e-education, and e-health. These services can bring in additional revenue beyond just bit delivery.

M2M has been touted as the next big industry revolution and the connection will be 10 times bigger than mobile connection today.

Keys to Monetize LTE Opportunity

The ability of operators to capitalize LTE opportunity will go a long way toward shaping the future of mobile broadband communications, including but not limited to what services are available to enterprise end users and consumers, who delivers these services and, of course, what customers will have to pay for these services. Mobile operators must start the process of monetizing LTE today, and here are four key ways that can be accomplished.

Manage 4G LTE coverage to meet exploding bandwidth requirements

Based upon Huawei analysis, network coverage is the foundation of LTE business success, two golden rules impact 4G LTE development:

When reach of 40% of population coverage, it is the beginning of fast LTE subscriber growth.

When reach 70% of population coverage, it is a big milestone with explosive LTE business performance

Consistent and aggressive coverage strategy was adopted by lots of operators. For example, Verizon and DoCoMo employ fast 4G LTE coverage and both have 4G LTE coverage reaching 80% of the population. DoCoMo increase LTE speed first in business center, then in busy areas and airports.

Speed is key but brands and marketing drive sales and revenue

Deploying LTE networks is a monumental undertaking for mobile operators. It is essential for mobile operators to begin the LTE monetization process today in order to fully maximize the benefits of LTE and ensure that emerging competitor segment don’t strike first and unravel these effects. However, To grow LTE subscribers and their data usages, operators must drive LTE branding and marketing with:

New LTE brand with LTE exhibit center to showcase best user experience

Simplify package design with data centered offers such as Verizon Share Everything plan

Pricing LTE close to 3G to rapidly migrate 3G/Smartphone customers

Provide user portal for self care and easy changes of services

Own User Experience

As the mobile workforce communicates and collaborate with more devices and applications, and as consumers rely upon smartphones and tablets for work and play, end-users now expect a consistent experience across all devices. Delivering consistent experience is difficult for OTT providers tied to specific applications (i.e., Skype calling) and devices. Mobile operators, with ownership of the networks, are well positioned to provide end-user with one identity across all voice, video and messaging services, or move from device to device without interrupting calls. This is the opportunity operators have to completely own the user experience, along with all of potential revenue and branding benefits that comes with the ownership.

Look beyond tried-and-true consumer segment for new business

The enterprise market remains a work in progress, partly due to the rapid transformation of a workforce becoming increasingly mobile and consumer-grade expectation for accessing applications from employer-provided mobile device or a Bring-Your-Own-Device approach. Operators hold a more significant advantage in the enterprise relative to OTT players such as Apple, Google and Skype due to ability to own the network.

Customer Lifecycle Value Growth Solution

The trend of adding devices, increasing apps and video usages by mobile consumers implicates that customer data usages or spending would grow along their lifecycle. It presents opportunity and challenge for operators to manage customer and drive value growth along lifecycle.

1.Identify Value Customers and Value Areas

With continued growth in both the number of users and the number of connected devices per user, 4g LTE traffic volumes are very likely to grow rapidly. The billion dollar of question is who are the target customers or early adopters of LTE? Where are those customers located? How to convert the target customers into LTE subscriber?

Operators must determine and identify its value customers and value areas. Then develop Go-To-Market strategy to convert them into LTE subscribers. One of success examples is the “Share Everything” plan developed by Verizon. “Share Everything” plan allow its subscribers to share their data among their devices, family or even business members as shown in Figure. 4.

2.Manage Customer Value Growth Along Lifecycle

70% of operators offer self-service portals and 50% of them have developed self service APP. However, it is gaining importance to have a unified contact channel to manage customer care and customer value development along lifecycle. The unified contact channel is to extend from customer experience management to customer engagement and customer value lifecycle management with capabilities as follows: .

Access to account details such as real-time data usages or spending

Online payment methods

Promotion platform for real-time notification/recommendation

Self-care services

A unified contact channel to manage customer value growth along lifecycle would produce benefits of:

Reduce in-call and out call marketing and customer care staff

Increase customer ARPU due to up-sell and cross selling

Reduction of customer churn.

3.Apply Precision Marketing To Improve Operation and Customer Offers

Early LTE subscribers have generally been content with the speeds received. Strong customer satisfaction with LTE services should encourage others to take up LTE and this in turn should lead to rising data volumes. To improve LTE business operation and monetization, operators must upgrade its business operation to conduct precision marketing and customer value development. It must develop capabilities to offer:

Dynamic and flexible package and pricing design,

Grow customer data usages and value with personalization offers

Optimize networks to improve user experience

4.Develop new LTE business Success

Operators must leverage fast LTE speed and great user experience to expand into new business by taking following actions: Develop network coverage and capacity plan for LTE deployment

Use big data to develop market and customer insights as value offering to 3^rd party.

Develop and grow into enterprise, home, video or industry.

Huawei provides an innovative customer lifecycle value growth solution (VGS). VGS is an E2E smart operation and customer management platforms to enable operators to realize and monetize LTE business opportunity (See Figure 5). Huawei VGS is composed of three subsystems:

1.A Use Cases Engines (UCE) with pre-built use cases for fast deployment of traffic/charging control policy and customer offers. The UCE engine conducts traffic monitoring and analysis, differentiate services or users, trigger business decision or activities.

2. A precision marketing platform (ISOP/PolicyView) for smart operation that direct real-time marketing or business events such as customer notification, product or service recommendation, real-time AD, etc based upon customer contextual information, user behavior, transactions history etc.

3. A Unified Contact Channel (UCM/Tool Bar) to manage customer engagement lifecycle and customer lifecycle value development that provides real-time information, advice, care, service recommendation and online subscription.