The LET industry needs to steadily make progress and be vigilant of entering the Red Sea competition ahead of time

As of April 2013, 163 LTE (Long Term EvoluTIon) networks have been commercialized in 67 countries around the world, and the number of users has exceeded 70 million. In 2012, the annual growth rate of users was as high as 611%. It is worth noting that the deployment of LTE networks and the number of users are growing rapidly, but they are clearly concentrated in a few markets. Among them, North America and Asia together include more than 90% of the LTE user scale in the world. The United States and South Korea, which have the highest market share, are important indicators of industrial development.

As of the end of 2012, the penetration rate of LTE users of the three major Korean companies has reached 24 ~ 43%, which is not only higher than Verizon Wireless, network deployment has also reached the level of national coverage, and South Korea ’s telecommunications services are fully LTE-based. Shocking. However, as the 2012 financial reports were announced one after another, the three major telecommunications companies in South Korea performed poorly throughout the year. Net profit of SK and KT fell by 29% and 23% respectively from last year. LG U Plus also turned from positive to negative, with losses for the year Up to 60 billion won. On the contrary, Verizon Wireless, the same LTE indicator, has a 4% annual net profit growth, and EBITDA Margin has achieved an innovation of 46.6%. DIGITIMES Resarch observes that the commercialization time and service homogeneity of LTE are too high, vicious price competition is full, and excessively diversified business strategies are the main reasons for the unsatisfactory operation of Korean LTE operators.

Facing the rapid advancement of the global LTE network and the increasing number of terminal products supporting the LTE specification, telecommunications companies and governments in various countries may be under pressure to accelerate the development of LTE. However, from the case of Verizon and Korean companies, it is found that the investment in LTE operation is two sides. The uncertainty of the market and the assessment of its own competitive advantage are inevitable preliminary work, otherwise the industry may fall into the development dilemma of the Red Sea competition early.

"International Electronic Business"

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