Global LTE Market Analysis

Executive Summary
From the first investment wave in 2009, LTE has achieved global success thanks to the contributions from each link of the entire industry chain. More carriers revised their view from LTE island coverage at hotspot areas to nationwide coverage and turned LTE into a key differentiator with other WCDMA operators.
GSA reported that 360 commercial LTE networks launched in 124 countries by 2014, which including 48 LTE TDD networks in 30 countries, there are 17 operators deploying both LTE FDD and TDD networks among the 48 LTE TDD networks. LTE handset was much stronger than 2013, a total of 183 manufacturers released 2,218 devices by Oct 2014. The number of LTE subscriptions amounted to 480 million by the end of 2014 and is estimated to exceed 850 million by the end of 2015.
Deployment of LTE-Advanced (LTE-A) was a main trend in 2014 in developed countries, GSA reported that 107 operators are investing in LTE-A in 54 countries including 49 commercially launched LTE systems in 31 countries. Voice service is a mandatory service on LTE networks, GSA reported that 80 operators in 42 countries are investing in voice over LTE (VoLTE) including 14 commercialized VoLTE networks, there are 146 smartphones supporting VoLTE as of 2014. 

In 2014, the LTE rollouts in China had a tremendous impact on the total global LTE market. ZTE and Huawei benefited a lot from China telecoms’ bidding, while ALU, Ericsson and Nokia were awarded limited shares. On the whole, IHS estimates that LTE shipments reached 1,036 thousands of eNodeBs globally. Huawei (25.2%), ZTE (24.8%) and Ericsson (14.5%) were ranked as the top 3 of the LTE BTS vendors in 2014. It was the first year that Chinese domestic vendors outpaced Ericsson in the LTE market. ZTE’s LTE BTS shipments maintained rapid growth for two consecutive years and the year-on-year growth rate increased up to 133% in 2014, following 2013 to continue to maintain the fastest growing company with 6.6 pts share increase in 2014.
In terms of FDD LTE market, Ericsson and Huawei are the top 2 vendors. Furthermore, ZTE acted as the fastest growth vendor in 2014. The company aggressively broke through around 14 new markets in Europe, South America and Asia regions, and its FDD LTE BTS shipment amounted to more than 100,000 units in 2014. 
Huawei and ZTE are the top 2 of the TD-LTE BTS infrastructure vendors, and their market share and product solutions are far leading their rivals in the round. ZTE shows excellent growth that is better than its competitors in the TD-LTE market. The company obtained the first position in China TD-LTE market in the past consecutive two years; and moreover, ZTE rapidly expanded into the global TD-LTE market to win lots of deals in Japan, India, Indonesia, Russia and Brazil, etc.
We estimate that the global LTE investment will grow 18% in 2015 and decline from 2016. North America will decline due to that most carriers completed LTE coverage, LTE investment in Asia Pacific will grow in 2015 but start to decline in 2016 due to Chinese operators accelerating LTE rollout progress, the Europe Middle East and Africa market will keep growing by 2016.
China LTE market will keep playing a dominate role in 2015. We estimate that China Telecom and China Unicom will be awarded nationwide LTE FDD licenses, and China Mobile will enhance its TD-LTE coverage in the third year which also is the last year of massive LTE deployment. We estimate three China operators will deploy over 800 thousands of eNodeBs in 2015, which will be a great opportunity for ZTE and Huawei to consolidate their LTE market leading position in the world.
Evolved packet core (EPC) market will remain flat and slightly increase, IHS estimates that total sessions shipments of EPC will reach 4,665 billion in 2019. The EPC market contributed 55% to the total mobile packet core market in 2014, and is expected to reach 70% in 2019.

In 2014, ZTE acted as the fastest growing vendor and its EPC revenue increased by 196% year over year in Europe. Up to 2014Q4, ZTE EPC product has won over 70 commercial contracts in extensive partnerships with mainstream operators such as China Mobile, China Telecom, Vodafone, KPN, Telenor, TeliaSonera and Hutchison. Meantime, ZTE IMS product has won over 170 commercial/trial contracts worldwide. 
Before 5G, ZTE is promoting its Pre5G to enable end-users to enjoy 5G experiences with current 4G handset, and ZTE has competed Pre5G field trial with China Mobile and a Japanese tier one operator. Huawei also announced its 4.5G concept which will be commercialized in 2016.
Small cell will play an important role to expand LTE network capacity, especially for indoor coverage. ZTE’s Qcell, Ericsson’s Radio DOT system and Huawei’s Lampsite are competitive and flexible solutions to match customer requirements.

From a 2G/3G/4G convergence point of view, ZTE’s magic radio is designed to deploy LTE with current GSM networks in the 1,800 MHz spectrum simultaneously. On the other hand, ultra broadband radio (UBR) is another RRU product to combine a legacy 2G/3G product with LTE.
IHS believes NFV will occupy a portion of existing capex for network infrastructure. IHS expects a limited number of carriers to move from demos and proof-of-concept (PoC) testing to trials and early commercial deployments of NFV in 2014 and 2015 before wider deployment starts in 2016. All of the infrastructure players, Huawei, ZTE, Ericsson, ALU, Nokia and Cisco, have announced their NFV solutions in the past year. ZTE is the pioneer vendor on NFV technology with roughly half of its NFV portfolio commercially available and half under development.