LTE data roaming revenue forecasted to grow by a CAGR of 91.5% over the next 5 years

By Isabelle Paradis, President
HOT TELECOM
September 2014

New and original global telecoms interconnect service model forecasts that LTE data roaming traffic will grow by a CAGR of 212.1% a year to reach 44,313 TB/year in 2018.

In a new and unique global model of the market for international interconnect services – voice, data and messaging – HOT TELECOM confirms that LTE data roaming is set to soar, but the question is, will revenue follow?

LTE data roaming is in its infancy, as mobile operators’ main focus to date has been to launch the service within their national networks. Once this has taken place, they will increasingly turn their focus on ensuring this high quality service is seamlessly offered to their customers while roaming. We have seen a few announcements of LTE roaming agreements starting in early 2014, and this is set to accelerate significantly into 2015. LTE data roaming traffic is forecasted to more than triple to 615 TB in 2014.

Over the five year forecast period, LTE data roaming traffic is set to grow by a CAGR of 212.1% and by the end of 2018, it should account for 39.1% of the world’s total data roaming traffic.

At this point in time, we do not consider that the mobile data usage of LTE roamers is significantly higher than the usage of a 3G roamer. However, as customers become fully accustomed to the capabilities of LTE networks at home and the roaming bill shock issues are resolved, we expect the usage per LTE roamer to grow considerably. Consequently, in our opinion, by 2018, LTE roamers should generate at least 2.5 times more data roaming traffic than 3G users.

From a revenue standpoint, LTE roaming revenue earned by the international interconnect carriers is set to grow by a CAGR of 91.5% over the forecast period to reach US$38.3 million in 2018. At that time, LTE data roaming will represent 37.1% of the total data roaming hub revenue.

‘There is a possibility that IPXs will start charging higher port fees, for actual data usage, or for higher quality services within the overall LTE data roaming activity. For instance, they could charge for a premium path for cloud services being offered by the home network and route the general browsing traffic via lower quality paths. At some stage, we believe that mobile operators will enable local breakout for such general internet access. But when this occurs, revenue would be significantly impacted’ said Isabelle Paradis, President of HOT TELECOM.

This is among the findings in this first comprehensive report on the overall market for international interconnect services that includes global and regional forecasts for voice, messaging and support for roaming in the voice, data and messaging areas. The report, based on many years of collecting data about subscriber growth in fixed and mobile networks around the world, coupled with interviews and analysis of the business includes detailed forecasts and structured discussion of the trends and drivers in each of the service areas.



The report is available for immediate purchase at http://www.hottelecom.com/reports/wholesale.html. You can also access a range of IPX reports from HOT TELECOM at: http://www.hottelecom.com/research/IPX.html

For more information on this report, please contact Isabelle Paradis at: paradis@hottelecom.com or +1 514 270 1636