2013 USA - Telecoms, IP Networks, Digital Media and Forecasts

US ahead of the pack in LTE adoption

BuddeComm’s Annual publication, USA- Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors of one of the world’s largest markets. The report includes the FCC’s 2012 market data, telcos’ operating and financial data to Q1 2013 and market developments to mid-2013.

Telecom market overview

The US telecom market has been characterised by increasing demand for faster internet access, for bandwidth-hungry functions such as IPTV and for VoIP as a competitive alternative to wireline. More recently, the growing availability of WiFi, the deployment of LTE and WiMAX networks, together with the rapid uptake of smartphones and devices is propelling the growth of mobile wireless broadband.

Despite favourable stimuli, the US continues to linger relatively low within OECD countries for broadband penetration. Part of the difficulty lies in the absence of effective competition, and in the lobbying prowess of AT&T and Verizon which on a state level have both pressed for legislation to restrict publicly funded broadband networks. Both operators have purposefully promoted their fibre networks while ending upgrades to large swathes of their legacy copper infrastructure. This will leave millions of Americans with no fixed voice service, obliging them to pay over-the-odds for voice and broadband based on LTE.

Mobile market

The US has one of the largest LTE markets in the world. One of the keys to LTE deployment is access to spectrum to keep pace with mobile data traffic which is expected to increase 10-fold by 2016. Operators have endeavoured to secure spectrum through A&M activity and purchases. Much of the growth in LTE adoption has been facilitated by the availability of compatible devices, as well as astute marketing strategies among operators and effective network deployments.

One of the considerations for LTE expansion rests with infrastructure. The use of metrocells and femtocells will be crucial to this process. Verizon’s LTE coverage is expected to match its 3G footprint by the end of 2013, while AT&T now offers LTE coverage to more than 200 million people.

Key telecom penetration by sector – 2010; 2013

(Source: BuddeComm)

Market Highlights

• The total cost for the Electronic Medical Records incentive program over the next decade is estimated at $22.5 billion, with EHR incentive payments of about $14.6 billion made by mid-2013. There are thus far about 395,000 eligible hospital providers out of a pool of about 532,000.
• Numerous existing gigabit initiatives will become more common in coming years as cities seek to develop a competitive edge to secure employment and economic growth. Thus far there are more than 40 gigabit communities in 14 states, supported by the FCC.
• T-Mobile’s market position has strengthened since he failed merger with AT&T. It secured a number of mobile licences from AT&T, acquired spectrum from Verizon, improved its financial position following the tower deal with Crown Castle and merged with MetroPCS. These developments have enabled T-Mobile to commit to increasing capex from an average of US$2.7 billion per year to US$4.7 billion in 2013 and around US$3 billion in 2014 and again in 2015, mainly focussed on LTE network development.
• Georgia’s HB 282 bill, pushed by AT&T and Windstream, aimed to prohibit cities from offering broadband to areas where at least one home in a census block had broadband above 3Mb/. The bill’s defeat should be an encouragement for municipal broadband programs.
• In mid-2013 the US and Canadian telecom regulators agreed on ten interim spectrum sharing arrangements to promote the deployment of mobile broadband in both countries. Arrangements enable wireless broadband services to coexist along the border, harmonise the countries’ public safety plans and allow licensees to implement their 700MHz narrowband systems.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in the USA. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.