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TD-LTE: gearing up to cover 2.7bn people in Asia by 2013
TD-LTE adoption is gaining momentum among global carriers
In our view, TD-LTE is becoming the global solution for unpaired spectrum
due to its 3G interoperability, large data capacity, and leverage of the FDDLTE ecosystem. Verizon’s successful launch of FDD-LTE in the US should
further accelerate the conversion of WiMAX to TD-LTE. In June, two more
carriers have joined the TD-LTE camp, which now totals 12 carriers. China
Mobile, Bharti, and Softbank, three major carriers covering 39% of the
global population, look on track to roll out some TD-LTE services in late
2012 or early 2013, and the significant potential of these markets should
attract increasing R&D investment into TD-TLE technology, in our view.
Qualcomm and STE lead in multi-mode LTE/3G semiconductors
Unlike TD-SCDMA, TD-LTE has broad support from various leading global
technology companies and should enjoy a smoother ride, in our view.
Qualcomm’s newly launched MSM8960 is the first mobile processor with
an integrated modem supporting TD-LTE/FDD-LTE/EVDO/WCDMA, and
should significantly simplify the multi-mode LTE/3G handset design. STEricsson’s M7400 is a multi-mode modem that supports TD-LTE/FDDLTE/HDPA+/TD-SCDMA. Our channel checks indicate MSM8960 and M7400
supporting TD-LTE should become commercially available in early or mid-
2012. Also, we note more than 10 other semiconductor firms have invested
in TD-LTE, a much strong line-up than for TD-SCDMA. We expect ZTE and
Huawei to launch multi-mode TD-LTE smartphones by the end of 2012.
Potential winners/losers from a smooth TD-LTE transition by 2013
We view TD-LTE as a disruptive technology similar to FDD-LTE, and that if
it gained sufficient critical mass with successful commercial launch on a
quality smartphone, we think China Mobile could recover its market share
of high-ARPU users at the expense of China Unicom and China Telecom
from 2013. This scenario would be especially negative to China Unicom’s
long-term story of strong operating leverage after reaching 100mn 3G sub
in 2014-2015. In India, Bharti Airtel would likely be the main beneficiary of
TD-LTE due to its strong existing subs base. In Japan, Softbank is the only
carrier adopting TD-LTE. We estimate TD-LTE capex to reach US$15-$20bn
and 40mn terminals over 2012-2014 — with Qualcomm and ST-Ericsson
benefitting as leading multi-mode LTE/3G semiconductor suppliers today.
ZTE should enjoy higher market share in TD-LTE than in 3G, in our view
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TD-LTE: gearing up to cover 2.7bn people in Asia by 2013
TD-LTE adoption is gaining momentum among global carriers
In our view, TD-LTE is becoming the global solution for unpaired spectrum
due to its 3G interoperability, large data capacity, and leverage of the FDDLTE ecosystem. Verizon’s successful launch of FDD-LTE in the US should
further accelerate the conversion of WiMAX to TD-LTE. In June, two more
carriers have joined the TD-LTE camp, which now totals 12 carriers. China
Mobile, Bharti, and Softbank, three major carriers covering 39% of the
global population, look on track to roll out some TD-LTE services in late
2012 or early 2013, and the significant potential of these markets should
attract increasing R&D investment into TD-TLE technology, in our view.
Qualcomm and STE lead in multi-mode LTE/3G semiconductors
Unlike TD-SCDMA, TD-LTE has broad support from various leading global
technology companies and should enjoy a smoother ride, in our view.
Qualcomm’s newly launched MSM8960 is the first mobile processor with
an integrated modem supporting TD-LTE/FDD-LTE/EVDO/WCDMA, and
should significantly simplify the multi-mode LTE/3G handset design. STEricsson’s M7400 is a multi-mode modem that supports TD-LTE/FDDLTE/HDPA+/TD-SCDMA. Our channel checks indicate MSM8960 and M7400
supporting TD-LTE should become commercially available in early or mid-
2012. Also, we note more than 10 other semiconductor firms have invested
in TD-LTE, a much strong line-up than for TD-SCDMA. We expect ZTE and
Huawei to launch multi-mode TD-LTE smartphones by the end of 2012.
Potential winners/losers from a smooth TD-LTE transition by 2013
We view TD-LTE as a disruptive technology similar to FDD-LTE, and that if
it gained sufficient critical mass with successful commercial launch on a
quality smartphone, we think China Mobile could recover its market share
of high-ARPU users at the expense of China Unicom and China Telecom
from 2013. This scenario would be especially negative to China Unicom’s
long-term story of strong operating leverage after reaching 100mn 3G sub
in 2014-2015. In India, Bharti Airtel would likely be the main beneficiary of
TD-LTE due to its strong existing subs base. In Japan, Softbank is the only
carrier adopting TD-LTE. We estimate TD-LTE capex to reach US$15-$20bn
and 40mn terminals over 2012-2014 — with Qualcomm and ST-Ericsson
benefitting as leading multi-mode LTE/3G semiconductor suppliers today.
ZTE should enjoy higher market share in TD-LTE than in 3G, in our view
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