ACG Research

ACG Research
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Friday, February 22, 2013

LTE Acceleration and Mobile IP Backhaul Fuel 4Q 2012 Market Growth

4Q 2012 Mobile IP Infrastructure market grew 13.5% Y/Y, reflecting strong growth in Mobile IP Backhaul and LTE acceleration.

LTE spending in 2012 has surpassed industry expectations and will continue to grow at unprecedented levels in 2013. In 4Q 2012, GSMA confirms 32 new LTE networks were commercially launched, now totaling 134 LTE networks with subscribed customers running worldwide. Mobile data traffic doubled on global networks in 2012, and is expected to double again in 2013. The proliferation of Android and iOS is also pushing up monthly average mobile data usage; ACG estimates smartphone usage on mobile networks in 2013 will increase to an average 862MB/month, globally.

As mobile SPs undergo service development and differentiation for LTE networks, they are migrating 3G networks to serve as economy class networks for low- to mid-market segment service offerings, such as value plans, MVNO wholesale, and M2M communications. Compared to LTE investments, 3G vendors' revenues still represent the majority of total market spend but will continue to decline globally over next three years. 

4Q 2012  Worldwide  Mobile IP Infrastructure  Market Share
Market Share

SON, SDN, and Virtualization: Impact on Mobile IP Network Infrastructure
ACG expects Self-Optimizing Networks (SON), Software Defined Networking (SDN), and Virtualization to have a high degree of impact to vendors providing SP Mobile IP Network Infrastructure. Many vendors have plans to announce revised product road maps and innovations at Mobile World Congress 2013.  Currently, Nokia Siemens is the only major packet core vendor shipping products using commercial off-the-shelf components using ACTA standard.

ACG expects the market to radically change and innovate with technology shifts and influences occurring in SON, SDN, and virtualization. These shifts will threaten vendors’ positions and value propositions, as network economics evolve and mobile SPs adopt distributed core architectures.

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