We’re following up on our Q3 State of LTE report by examining our LTE network data against other metrics that we think may explain some of the results we are seeing. On Wednesday, Kevin compared the performance of the first 20 mobile operators to launch LTE. Today, I’m taking a look at the world’s 4G operators through an economic lens.
One possible explanation for a country’s LTE coverage and performance is wealth — one could reasonably hypothesize that better LTE networks get built in countries with relatively better economic situations. The measure we’re using for wealth is GDP per capita in international dollars (purchasing power parity), which is commonly accepted gauge of a country’s wealth used internationally. Here is a coverage comparison for the 10 wealthiest countries (note that we are only including countries that occurred in our LTE report. This does not, however, change the relative rank of countries).
So far, these are not surprising results. Eight out of the ten wealthiest countries have LTE coverage at or above 70%, with four of these countries reaching 80% or more in coverage. (OpenSignal tracks using coverage using a metric called time coverage, which measures the proportion of time a user has access to an network connection). However, while these are the top ten countries in wealth, only half of them were in the overall top ten in LTE coverage globally. Furthermore, with just 61% and 63% coverage respectively, Saudi Arabia and Switzerland are in the middle of the global pack despite their resources. How do they compare to the poorest countries?
LTE coverage in the ten poorest countries is, on average, lower than in the wealthiest countries, with half displaying LTE coverage of 50% or lower and all countries having coverage levels of less than 70%. At the same time, Georgia and Bolivia, at 69% and 67% time coverage respectively, managed to outperform two of the top 10 wealthiest countries, Saudi Arabia and Switzerland.
Clearly, there’s more at play than GDP for LTE coverage, so let’s consider some of the other possible variables. For instance, Bolivia’s lack of cheap fixed-line infrastructure may have sparked more demand for mobile broadband. Georgia’s role as a central Asian telecom hub has attracted government and foreign investment. And while other studies have found that Switzerland’s geographic coverage expands far into rural areas, our data shows that hasn’t translated into widespread 4G availability.
Will GDP explain LTE speeds in the ten wealthiest and ten poorest countries?
One of the first things that comes out of this comparison between LTE speeds and GDP per capita among the richest countries is that speeds are all over the board, and — with a few exceptions — not very impressive. With four countries averaging LTE speeds of 10 Mbps or less, and with two more under 15 Mbps, only Singapore (36 Mbps), the UAE (22 Mbps), the Netherlands (19 Mbps) and Switzerland (17 Mpbs) stand out.
What happens in the ten poorest countries? Surprisingly, the picture is not that different. Speeds are not that much worse, although there is only one country – Morocco – with average LTE speeds above 15 Mbps (compared to four countries in the 10 wealthiest). Could regulatory environments and government interest in telecommunications have an effect and be bringing up Morocco’s LTE speeds? It’s possible, but a more likely explanation for Morocco’s speeds is network age. Meditel launched LTE in June of this year and Maroc Telecom launched LTE in July, meaning there are few subscribers on an unloaded network – the “new network effect” which we are also seeing in Eastern Europe.
To sum up, what have we found? There are no easy answers when it comes to understanding why certain countries rank better in LTE coverage and speeds than others. While GDP per capita is a decent indication of better coverage, it is not the end all and be all – there are exceptions. Similarly, you will find more countries have speeds above 15 Mbps among the top ten wealthiest countries, but there is not a consistent decrease in speeds as a country’s GDP per capita decreases.
Further analysis of LTE coverage and speeds would ideally look at combinations of variables. There are so many factors that could be responsible for a country’s LTE performance, and in the future, we’d like to start by considering: infrastructure investments; rural/urban population; foreign investment; regulatory policies, government resources, and telecom subsidies; geographic location; and primary exports.
What’s your theory about the LTE results, and the differences observed when comparing the richest and the poorest countries? Which factors would you consider when analysing network performance? Comment below or in the forums – we might just write about that next!