4G technology Long-Term Evolution (LTE), the super-fast wireless communications network, is rapidly gaining momentum in Europe and in turn boosting the m-commerce business of telecom operators. As per a study published by Orange (ORAN), Europe is leveraging from increased mobile data consumption by consumers since this super-fast wireless communications technology was introduced.
The research – carried out by TNS on behalf of Orange – reveals that 53% of the LTE users in larger European markets like France, Spain and U.K. use their smartphones to make payments compared to only 34% of the 3G users.
Smartphone users having 3G or 4G connections are increasingly using their phones for research before making a purchase. Subscribers tend to compare prices, features and read reviews of a particular product on the Internet through their mobiles before buying it online or at a retail store.
Gaming has provided a further impetus as 30% of LTE subscribers are using their smartphones to download videogames as opposed to only 17% of 3G users. With continued innovations in LTE-based device, this ratio is only expected to improve going forward.
4G offers several advantages over other wireless technologies including spectral efficiency and lower costs. Theoretically, LTE is expected to achieve download transmission speed of up to 300 Mbps and upload transmission speed of up to 100 Mbps, inducing customers to switch to this next generation wireless technology.
Obviously, 4G is thriving globally, with approximately 176 million 4G connections worldwide. In the U.S., Verizon Communications Inc. (VZ) and AT&T Inc. (T) has been a leader in LTE deployment. Further, China Mobile Ltd. (CHL), the largest wireless operator in China, will initiate significant LTE-TDD network deployment in 2014.
LTE is displaying solid future prospects as a recent report by GMSA Intelligence revealed that there will be more than 1 billion LTE connections globally and around 465 LTE networks across 128 countries by 2017.
We believe this surge in 4G subscribers will boost the m-commerce revenues of Orange and allow it to compensate for the unsatisfactory performance in Europe while the region recovers from macroeconomic turmoil.
Orange gave a disappointing third quarter performance, with revenues and adjusted EBITDA dropping from last year owing to a lower mobile service business in its home country and lower Enterprise segment revenues.
Orange currently carries a Zacks Rank #3 (Hold).
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