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By Janani Balasundar, Research Analyst, MIPC

The global Long Term Evolution (LTE), LTE-Unlicensed (LTE-U), and LTE Machine-to-Machine (LTE-M) test equipment market includes test equipment used throughout the lifecycle of LTE technologies’ research & development (R&D), manufacturing, installation and maintenance (I&M), and monitoring applications. LTE technology has reached its mature stage, resulting in a declining market since 2014’ a high single-digit decline can be expected in the coming years. There will be adoption of LTE in Latin American and African countries. LTE-U technology will be in demand, as cellular networks are trying to offload traffic from their networks by making use of the bandwidth available from unlicensed networks.

Some of the key growth drivers of this market are discussed below.

NarrowBand Internet of Things (NB-IoT) and LTE Cat M1 Enabling Machine-to-Machine Communication will Drive LTE Test Equipment Market Growth

NB-IoT or LTE Cat NB1 and LTE Cat M1 are used to accommodate IoT-enabled devices with low data requirements. These technologies are expected to dominate the Low-power WAN (LPWAN). The big advantage of these technologies is that deployment does not require any installation of new equipment. It simply needs a hardware and software upgrade to existing technology. Demand for these technologies has been ramping up since 2017, and is expected to continue for the next 5–6 years, driven by technology demand. Asia-Pacific is expected to see more adoption of these technologies than North America, because it is expected to witness a huge number of smart cities. The main benefits of these technologies are low power consumption, excellent penetration coverage, and lower component costs. LTE Cat M1 is similar to NB-IOT, but there are some differences: the Cat M1 is easier to implement and it offers a data rate of at least 150 kbps, whereas NB1 offers 50 kbps. Thus, Frost & Sullivan expects more demand for LTE Cat M1 than NB-IoT. With the expected volume of connected devices, machine-to-machine communication will continue to demand testing.

LTE-M functions on a 1.4 MHz spectrum, has a much lower bandwidth than cellular services, and enables applications in smart homes, industrial monitoring, asset tracking, healthcare, retail, smart cities, wearables, and much more. Driven by the impact of IIoT, LTE Cat M1 is expected to witness constant demand throughout the forecast period. Mega Trends in IIoT will have a significant positive impact on the LTE test equipment market.

LTE-U Spectrum Fuels Market Growth Due to High Spectral Efficiency

Unlicensed technologies consist of LTE-U, Licensed Assisted Access (LAA), LTE WLAN Aggregation (LWA), and MulteFire technologies. LTE-LAA combines LTE in unlicensed spectrum with LTE in the licensed band by using carrier aggregation. This aggregation of spectrum provides faster data rates and a more responsive user experience. LAA is key to deploying 5G and leveraging a combination of both licensed and unlicensed spectrum, which uses higher frequency bands on small cell architecture. This technology will play a vital role in 5G, and will strongly drive the test equipment market for LTE.

LAA technology hit its peak in 2017, with increasing sales of test equipment, driven by the commercial deployment of the technology. LAA is preferred to licensed spectrum, as licensed spectrum is expensive and limited and LAA offers the benefit of throughput boost in unlicensed spectrum while supporting gigabit LTE. There will be high demand for R&D and monitoring solutions for LTE-U technologies, as there is a high requirement for protocol testing. Commercial deployment of LTE-LAA is happening in the United States, which is driving demand for conformance and network performance testing. With 1-GB phones all over the world using multiple technologies, such as carrier aggregation, multiple input multiple output (MIMO), high-speed modulation, and 1-GB devices with the latest technology employing a carrier in the licensed band and multiple carriers in the unlicensed band to achieve a high throughput, there will be a significant drive for unlicensed technologies in the next 3–5 years.

Key Conclusions

Demand from R&D and manufacturing applications in the LTE test equipment market is expected to significantly reduce over time, as LTE technology is mature; however, monitoring applications are expected to significantly increase in the next 6 years. There will be more decline in the North American LTE test equipment market, as demand is shifting to 5G and customers have been using LTE since the advent of the technology. Europe is a significant region of LTE-M market, as the technology dominates in this region. Market demand in Asia-Pacific will reduce for LTE technology, while it will increase for LTE-M, as the technology is supposed to root strongly in the region. Key demand drivers for the LTE test equipment market are technologies such as LTE-U spectrum, carrier aggregation, MIMO, NB-IoT, and LTE Cat M1. LTE-U and LTE-M technologies will face high demand in the next 6 years. Challenges faced by the test equipment vendors include constant technology change and demand for lower test costs from users.

Please email jananib@frost.com for enquiries or to know further details about this study.

Research service on the LTE, LTE-U, and LTE-M market is available at Frost & Sullivan. Base year of the market study is 2017 and forecast period is from 2018 to 2023. Geographical scope includes North America, Europe, Asia-Pacific, and Rest of the World and end users are service providers, network equipment manufacturers, and enterprises.

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