Analyst: LTE will grow faster than 3G

It took six years for UMTS networks to attract 100 million subscribers, but it will only take four years for long-term evolution to do the same, according to a new study from Pyramid Research. Between 2010 and 2014, LTE subscriptions will increase from zero to 136 million worldwide, starting slowly with initial deployments in the US and Japan but picking up steam in 2012, particularly as Chinese operators roll out their networks, the report concludes.

Verizon Wireless (NYSE:VZ, NYSE:VOD) and NTT DoCoMo (NYSE:DCM) are expected to be the first major operators with commercial LTE networks in 2010, followed by a larger spate of launches, including AT&T (NYSE:T), in 2011. According to Pyramid, those first two years will produce just over 10 million subscribers, but 2013 and 2014 will be boom years with  more than 100 million subscribers signing up for service. China Mobile (NYSE:CHL) is being particularly aggressive with its LTE roll-out, using a time division duplexing (TDD) configuration rather than the dominant split spectrum approach. Pyramid expects China to have 2014 36.1 million LTE subscribers in 2014, one quarter of the world’s total.

“The majority of LTE subscriptions in the early stage will come in developed markets, where most of the first LTE deployments will occur – with the US and Japan leading,” Pyramid analyst Dan Locke said in a research note. ”However, LTE will grow 30% faster in emerging markets than developed ones; subscriptions in emerging markets will account for 43% of the LTE total in 2014, up from 5% in 2010.”

The initial subscriptions in LTE will be driven purely by data. Pyramid expects the first USB dongles to be available in mid-2010, at the earliest. The first LTE handsets won’t be ready until 2011. One group, however, is holding out hope that a new type of device will be introduced in that timeframe: the femtocell.

At the LTE World Summit in Berlin today, Femto Forum Chairman Simon Saunders argued for the femtocell as a critical component of LTE networks, saying they would increase coverage, expand network capacity and easily extend coverage indoors where most data is consumed. The femtocell could even be used as a home networking platform that could distribute multimedia between various devices without taxing the wide area network, according to Saunders. Continuous Computing and PicoChip have already announced plans to develop an LTE femtocell platform, which Continuous could include in its unified broadband gateway architecture.

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