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Asia 4G growth accelerates, but Chinese users reluctant to pay

The time-division duplex (TDD) variant of LTE is picking up the pace and gaining more market traction, according to a new study from ABI Research. In Asia-Pacific, LTE-TDD networks will cover more than 53 per cent of the population by 2018 at a growth rate of 41 per cent between 2012 and 2018. Meanwhile, frequency-division duplex (FDD) LTE networks will reach 49 per cent population coverage by the end of 2018.

“The increase of LTE-TDD population coverage is mainly driven by wide deployment in some Asian countries with large populations, such as China, India, and Japan,” said Marina Lu, research associate at ABI Research. “Due to its complementarity of using unpaired spectrum, a number of LTE-FDD operators will expand their networks with LTE-TDD in additional spectrum to improve network capacity.”

However, a separate report from Strategy Analytics suggests that Chinese smartphone owners are reluctant to pay extra for 4G services and have little trust in mobile operators. More than 80 per cent of respondents to its survey were not satisfied with their current mobile network speed, and less than 10 per cent indicated they would pay for a 4G network.

“The low trust that Chinese consumers have with their mobile service providers is the main reason for lack of willingness to pay for 4G networks,” said Alvin Wu, analyst at Strategy Analytics’ Wireless Device Lab. “Dissatisfaction with their existing 3G network speed has contributed to the negative expectations that consumers have with the 4G network.”

Strategy Analytics says that as LTE capability penetrates into more handsets at lower price points, a general emphasis on faster connectivity and better coverage is likely to resonate most strongly. Wu adds, “Chinese operators need to devote more effort on providing previously promised services and improve Chinese consumers’ level of satisfaction.”

Among Asia-Pacific’s recently completed, on-going, and upcoming 4G spectrum auctions, 25 per cent support 2,600MHz LTE, another 25 per cent support 1,800MHz LTE, and 20 per cent support 800MHz.

“Asia-Pacific will be the region with the most LTE-TDD networks,” said ABI Research practice director Jake Saunders. “Of global LTE-TDD concluded contracts awarded to vendors so far, 47 per cent come from Asia-Pacific and the second largest portion of 18 per cent is contributed by the Middle East.”

A number of operators are already preparing to upgrade LTE networks to LTE-Advanced networks. ABI Research say that there have now been 29 LTE Advanced network commitments, of which 10 come from Western Europe, 9 from Asia-Pacific, and 5 from North America.

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