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The State Of Global 4G

The following post comes from Kagan, a research group within S&P Global Market Intelligence. To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Of the 42 4G countries covered by Kagan, a research group within S&P Global Market Intelligence, Denmark boasts the world's highest 4G penetration rate at 83% of total mobile subs, followed by South Korea at 76%, and Australia at 65%.

Twelve of the 42 countries in our analysis registered 4G penetration greater than 50% of total subs, and while each is highly differentiated economically and politically, their respective governments share an interest in deepening 4G deployment. Asia-Pacific and Scandinavian countries dominate this club of greater than 50% 4G penetration, sharing relatively small geographic footprints, favorable economic conditions and populations concentrated in urban cities. These countries also lead the world in 5G development and testing, and are home to some of the world's largest mobile equipment manufacturers.

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Elsewhere in the world, 4G deployment and adoption continues to expand but at vastly different rates. Economic growth is a key driver of mobile technology development and adoption worldwide, demonstrated in our analysis using GDP per capita as proxy for economic growth in each country. GDP per capita is an important, though imperfectly correlated, predictor variable associated with 4G penetration, and charting it against 4G penetration in each country yields an intuitive result.

Global 4G penetration and GDP per capita, 2016

Higher GDP per capita is roughly correlated with greater 4G penetration. This correlation is particularly tight at the bottom end of the income scale. This exercise surfaces some interesting departures from the expected trend line, highlighting why economics alone cannot explain 4G penetration. Notable countries include Switzerland, China, Turkey, Poland, UAE, and Israel.

    • Switzerland mobile profile- In spite of having the highest GDP per capita in our data set, estimated 4G penetration was just 34% at year-end 2016, as operators prioritized LTE-A network buildouts that were coming online in mid-2016. We expect 4G penetration to rise markedly in 2017.

    • Turkey mobile profile– Quick adoption of 4.5G (LTE-A) services in Turkey happened amid challenging economic conditions and in parallel with political disturbances, multiple terrorist attacks and a failed military coup d'etat. In August 2015, all three Turkish operators Turkcell, Turk Telekom (previously Avea) and Vodafone Group Plc's Vodafone Turkey participated in the LTE-A spectrum auction held by the country's regulator, Information and Communication Technologies Authority (BTK), in preparation for 4.5G service rollout by April 2016.
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    • Poland mobile profile- Poland's 4G deployment was hampered by bumbled auctions, but recent success in spectrum allocation and infrastructure buildouts has catapulted Poland's 4G adoption rate beyond expectations set by the country's economic conditions.

    • China mobile profile- Mobile operators are moving to pool their telecommunications towers and assets after the Chinese government required them to form a tower-sharing joint venture. This is in line with the government's "Broadband China" plan, which aims to achieve 85% 3G/4G rural penetration by 2020.

    • United Arab Emirates mobile profile- Penetration of 4G is estimated to be fairly low with only 20% of total mobile subs, or 3.8 million mobile subs using 4G in 2016. At 10.5 million subs, 3G is estimated to be the most used means of mobile connectivity, with 55% of total mobile subs, down from 59% compared to year-end figures in 2015.

    • Israel mobile profile- Subs of 4G doubled in 2016 to 1.1 million, or 11% of the market, which indicates demand for data is increasing.

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Nov 09, 2016