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13 November 2012
| Kavit Majithia
LTE may be fast emerging as the leading next-generation mobile solution, but it is also providing as many pitfalls as opportunities for carriers. Kavit Majithia investigates.
The GSA made the bold claim last
month that LTE is the fastest, most viable and quickest
advancing technology of all time.
With approximately 700 million subscribers, China
Mobile’s commitment to developing and deploying TD
LTE standards on its networks is perhaps one of the largest
testaments to the technology.
The company recently announced that
it is set to extend the roll-out of the next-generation
standard to 13 cities across the country in partnership with
As a result, market watchers are now tipping China to be a
major rival to North America in the global 4G LTE market.
China’s neighbour, India, must be watching
enviously, having given away an early lead in next-generation
Kenneth Stewart, CTO at TE Connectivity, recalls a time when
India was thought to have stolen an early start on 4G, albeit
based on WiMAX, by auctioning 2300MHz spectrum.
"WiMAX had a clear leadership
position in two areas of the world: North America, where it was
supported by Clearwire, and India, where the major players
adopted 2.3Gb data plans. Had things gone WiMAX, it is possible
we would have seen India in a global leadership position."
How things change. India now
significantly lags behind its Asian and North American
counterparts in developing next-generation mobile standards.
The thought of investing in WiMAX in today’s
market seems about as appealing as investing in a Greek
The evolution of TD LTE and FD LTE
has left WiMAX well and truly on the backburner. "In
today’s marketplace, WiMAX will only ever be a
niche technology," adds Stewart.
Networking Index (VNI) study suggests that mobile data traffic
will grow a mammoth 18-fold from 2011 to 2016, at a CAGR of 78%
(see figure 1).
This figure will complement the number of devices that are
connected to IP networks, with Cisco predicting that there will
be 19 billion networked devices in 2016, up from 10 billion in
Notably, the projections from Cisco
suggest that the amount of data transported on the global
internet is doubling every year, and despite the fact that LTE
standards are supposedly twice as efficient as WCDMA and WiMAX,
LTE standards will "help the demand but not actually solve the
problem" according to Stewart.
So what will? Unified
Communications provider Amdocs cites three approaches which
mobile operators have undertaken to address the high level
demand for data.
These include increasing spectrum,
developing and evolving a heterogeneous network, and
implementing LTE at its present phase. The
company’s product marketing manager, Phil Bull, is
ruthless in his assessment of all three: "We see all of that as
Bull believes instead that LTE is just one of many investments
mobile operators will need to make, as practices such as
offloading data to Wifi hotspots become increasingly
Supporting this view, Steve
Livingston, senior VP of carrier development at enterprise
mobility services company iPass, recounts his experiences as an
iPhone 5 user in the US.
"Living in the US and owning a
phone powered by AT&T, I have access to 4G, but I must say
I haven’t seen the logo available very often.
I’ve had my iPhone for a week and
I’ve moved 195Mbps on my phone, and 175Mbps of
this was through Wifi. I can even take examples from my
daughter, who will not pick up a voice call operating on a
standard network, but will instantly respond to Facetime over
Working with carriers across the
world, iPass operates a Wifi offload application tool that
largely serves mobile enterprise end users. Livingston believes
the value of such a service lies in the fact that consumers are
constantly opening applications that push 'big
data’ but fail to pay attention to their data
"I think Wifi can be very
complimentary to 3G or 4G," he says. "Although carriers today
aggressively market their data tariffs and capabilities, they
are still trying to lessen the load and put consumers on a data
The mass adoption of LTE and the
evolution of HSPA networks will not only require mobile
operators to manage their network capacity and radio access
networks better on a backhaul level, but also requires service
providers to find new and innovative ways to monetise rich
media content on networks.
In the case of global carrier Tata
Communications, there is a clear commitment by the company to
work with multi-network operators (MNOs) worldwide to address
the challenges that are being presented by the move to
"There needs to be awareness of how to deal with the migration
of existing services and how infrastructure will support this
going forward" says Tim Sherwood, VP of mobile segment strategy
and development at Tata Communications.
"Whether this is changing
signalling standards, moving from TDM-based connections to
IMS-based voice and VoIP, or even how to support the evolution
from SMS to a more instant messaging model, we are attempting
to support service providers from an enterprise VPN standpoint
or Unified Communications end point."
Sprint’s VP of
networks, Bob Azzi, offers an opposing view, believing that it
is the operators’ blind commitment to rolling out
LTE services to 100% of their footprint that is proving their
"The sheer cost of deploying fibre
and a new cell site to deploy LTE in a cornfield 100 miles
outside of Chicago just does not make business sense; it could
cost up to $10 million to do it. An operator’s
commitment to 100% penetration is something that is hindering
the advancement of next-generation mobile," he says.
By the end of 2012, the GSA
predicts there will be 150 commercial deployments of LTE in
over 64 countries, compared to the 47 commercial deployments
recorded at the same point last year (see figure 2).
The US, in particular, has emerged as the market leader for LTE
adoption, with leaders AT&T and Verizon leading the way in
terms of roll-out, accessibility and market share.
The news that Japanese tycoon and
owner of telecoms operator Softbank, Masayoshi Son, has
made a play to acquire a 70% stake in the third largest
operator in the country, Sprint, has the
potential to challenge the position of the top two.
Before the Softbank deal was completed, Azzi told
Capacity that Sprint had not set out a guided strategy
or projections for its LTE roll-out, but said to "expect a
steady stream of announcements on a monthly basis." With the
weight of Softbank behind it, and analysts touting the deal as
the most significant in wireless history, the rulebook could be
thrown out the window.
Asia is certainly not far behind
North America with its LTE adoption. According to research
company Wireless Intelligence, Japan and South Korea are more
than likely to challenge China for advanced launches: the
former driven by KDDI’s investments and the latter
driven by SK Telekom.
Wireless Intelligence estimates
that these three countries, along with the US, will account for
a mammoth 87% of global LTE deployment. Europe too boasts some
well advanced markets, with Germany and the Scandinavean
countries leading deployment, but other countries have been
hindered by the Eurozone crisis.
The launch of 4G in the UK, for
instance, has been subject to continuous high-profile delays.
"There is no doubting that the UK has lagged behind in the
deployment of this technology in comparison to other advanced
markets," says Peter Jennings, head of customer design and
architecture at MLL Telecom. "Even when it is deployed, only
time will tell whether LTE will be sufficient to meet the data
demands of consumers."
announcement to allow the recently rebranded EE, formerly known
as Everything Everywhere, to use its existing spectrum came as
welcome news to consumers that own an iPhone 5 or Samsung S3
handset. It was
unwelcome news, however, for rival UK operators O2, Vodafone
The spectrum will be used for both FD LTE and TD LTE, with the
UK government aligning the 2600MHz and 800MHz bands. TE
Connectivity’s Stewart suggests that increased
consumption of smartphones in Europe, the US and Asia, could
one day lead to "a global LTE roaming market".
Wifi pioneer Livingston, however,
rubbishes this idea, claiming spectrums differ too much between
countries for this to happen. "When you ask telecoms carriers
how 4G roaming will work you get very vague answers," he
"It will only work if you are
operating on the same spectrum as your home market, but how
will a consumer even know this? They are unlikely to turn on
data roaming. The ecosystem is even more complex in the US as
different carriers in the country operate on different
Tata Communications, which works
with over 60 MNOs globally to ensure LTE is accessible in both
the mainstream and less accessible markets, believes the LTE
ecosystem is already changing.
LTE networks, according to
Sherwood, now require the same quality of inter-operator
backbone services that match the standard of, for example, IPX+
or Ethernet offering.
"There is an inherent need in the market for service providers
like us to support data roaming and we are now starting to work
with customers as they start to launch LTE roaming. We are then
required to provide not only the diameter signalling
interworking, but also data transport for data roaming for GRX
and IPX for differentiated service management."
With a large amount of software and
upgrades required on networks to ensure the transition, it
could be a bitter pill to swallow for those operators that had
made the early jump to WiMAX, such as Bharti Airtel in India.
These operators are now required to make additional investment
to complete the transition from WiMAX to LTE.
According to TE
Connectivity’s Stewart, this process can be as
complex as making the transition from legacy networks to WiMAX.
"If they invested in the chipsets and had the core team design
and map it, they have lost all that investment," he says. "In
some cases the vendor can reprogramme base stations to the new
standard, and it can depend on how cheap the operator went with
their initial deployment. I would say roughly half the
investment is gone."
Even in the developed markets,
however, the lack of available fibre can hinder the development
and adoption of LTE networks, according to Richard Karpinski,
senior analyst at Yankee Group. "No carrier is willing to be
left behind on LTE, but backhaul remains a constant challenge,"
"Getting fibre to the cell site removes an often unseen
bottleneck, but this remains expensive and often not
available." Analysts have seen carriers deploy cheaper
strategies to address the problem, including deploying EoC or
microwave radio access, but none of this is seen as a viable
long-term solution. What is abundantly clear in the long term
is that the LTE market is only set to grow.
Research firm Dell’Oro
Group forecasts that investment in LTE equipment for the radio
access network will grow up to eight times its present value by
2016, which will be welcome news for the much maligned vendor
market. The battle, certainly for carriers and content
companies alike, is firstly to address the challenges for
backhaul that comes with such high data consumption, and then
secondly find new ways of monetising content placed on
Tata’s unique strategy
of aiding service providers and MNOs across the globe is indeed
commendable, but for most telecoms environments the battle for
market share is an open playing field.
Operators in the UK, parts of Asia
and Europe can draw lessons from the game of chess that is
being played out in the US.
Sherwood believes that even when
all the spectrum auctions are said and done and LTE investments
have been made on a global basis, it will still take two to
three years to fully see the effects of such a technological
advanced network, operating on advanced handsets. "Accessing
applications and services that are increasingly IP represents a
challenge for everyone." Watch this space.
The Russian government has a strong commitment to developing
Russia’s technology sector in order to move away
from the economy’s reliance on the energy
In July this year, Russian
regulator Roskomnadzor awarded licences for next-generation
mobile services to Russia’s four leading
In rather complex circumstances, the licences were awarded for
free, giving MTS, VimpelCom, MegaFon and Rostelecom the licence
to launch 4G services, with a deadline set in place for June 1
2013 for the first deployment.
This deadline, however, is largely
unrealistic. According to Alex Danilin, senior analyst at
iKS-Consulting, the original widespread roll-out of WiMAX has
meant companies will have to go through a complex process to
have the frequencies ready for LTE roll-out.
"I don’t actually expect there to be massive
adoption of LTE in Russia until 2014," he says. "Frequencies
may have been awarded but there is still a formal process, and
they still need to be cleaned from military usage."
Danilin’s predictions appear accurate. MegaFon,
for example, still needs to develop its physical network, while
MTS has only begun work on its regional network in Moscow,
which still needs to be expanded to the commercial side of the
As for Rostelecom, Danilin says: "This company
doesn’t seem to have any plans for massive
deployment, despite the fact they have big potential in terms
of the frequencies they have been awarded."
iKS-Consulting predicts that by the end of 2012 the Russian
mobile market will generate revenues of $3.3 billion. This is
without any sort of official commercial deployment of LTE
technology, largely because the Russian market invested heavily
in WiMAX during its early phase.
And unlike rivalling developed economies, Danilin believes
WiMAX still has a place in the Russian telecoms ecosystem.