LTE SPECIAL REPORT 2014: LTE markets to watch

28 March 2014 |


China, South Africa and India have all encountered delays and stumbling blocks on their way to 4G. Could 2014 be the year LTE makes a breakthrough in these countries?

China
China awarded LTE licences to China Mobile, China Unicom Hong Kong and China Telecom in December 2013, with China Mobile launching commercial 4G services in the same month.

China Mobile, China’s largest mobile carrier by subscribers, deployed 4G in 16 cities at the end of 2013. The operator plans to invest approximately $6.9 billion on the roll-out of 4G services in 2014 and aims to expand the network to at least 340 cities, more than half the cities in China, by the end of the year.

China Mobile has awarded more than half of its contracts to build out 4G in the country to domestic vendors, including Huawei, ZTE, Datang Mobile, FiberHome Technologies, Potevio and New Postcom Equipment. Some European vendors, such as Alcatel-Lucent, Ericsson and NSN, also experienced success in the market.

Analysts expect competition to intensify once Unicom and China Telecom launch their 4G mobile operations later this year. China Unicom has issued a tender for 50,000 LTE base stations in a bid to offer 4G services by mid-2014, while rival China Telecom is also planning to launch 60,000 base stations by 2014.

China looks set to pioneer the way for TDD-LTE. Its licences are for TDD-LTE networks while most of the global LTE market is based on FDD-LTE technology.

Experts say that China’s decision to roll out TDD-LTE standard 4G will cause an increased uptake of the technology standard and cause a knock-on effect in other TDD sectors, including apps, chipsets, devices and network equipment. China Mobile’s huge customer base could give momentum to the LTE TDD standard.

China Telecom and China Unicom are both building 4G networks using a mix of FDD and TDD technologies. However, the Chinese ministry of industry and IT said that licences for LTE FDD operations would be issued only when “conditions are ripe”, following FDD network trials and “system verification” of hybrid LTE FDD and TDD.

South Africa
4G deployment in South Africa has been slow due to delays by the national government in the allocation of spectrum. Vodacom and MTN have been investing in their respective network infrastructure and equipping the network with the necessary hardware for LTE, in anticipation of a 4G licence auction. Vodacom is expected to have 1,000 LTE base stations ready by early 2014, while MTN’s LTE network has been extended to cover three million people, with just under 1,000 LTE base stations deployed across the country.

Operators have rolled out limited LTE services as a stepping stone to high-speed broadband, waiting to switch over should the spectrum for 4G mobile broadband be awarded soon.

South African president Jacob Zuma has reshuffled his cabinet several times and this has led to multiple ministers for communications in the last few years. Yunus Carrim was appointed communications minister in July 2013, after previous minister Dina Pule was caught up in corruption accusations.

The high turnover rate among ministers has added to the delays in the allocation of spectrum. However, delays in the migration to digital television are also partly to blame. Operators will need to wait until at least 2015 to get hold of 800MHz “digital dividend” spectrum which could be used for LTE.

It is expected that the revised national broadband policy – which is due to be finalised in March – will speed up the process. The ambitious draft document, unveiled by Carrim, calls for accelerated access and universal broadband access at 5Mbps for all of the country’s citizens by 2020, rising to 100Mbps within the following ten years.

In order to achieve the required universal access, the policy document calls for an open access national broadband network with a fibre backbone, as well a restructuring of the 4G-LTE mobile networks to a wholesale model.

India
Although India auctioned off 4G spectrum as early as 2010 during the broadband wireless access (BWA) spectrum auction, LTE has been slow to take off in the country. Despite the early availability of spectrum, only one operator is offering 4G services in a few cities. The government divided the country into 22 telecoms circles and issued 4G licences to each circle separately. However, operators are still only in the network deployment phase, which is said to be down to the slow pace of 3G adoption, as well as the high cost of 3G and 4G devices.

Bharti Airtel’s 4G services have been available since March last year in Kolkata, Chandigarh, Bengaluru and Pune and the operator is continuing to expand its LTE footprint in 2014. Its licences cover only four circles, so in May 2012 Bharti acquired a 49% interest in Qualcomm’s entities with licences to offer 4G in four more: Delhi, Mumbai, Haryana and Kerala. Bharti is reported to be in talks with Chinese equipment vendor ZTE for rolling out LTE networks in these circles.

There has been a significant increase in traction in 4G in the last few months. Bharti is leading the pack but is about to face stiff competition from Reliance Jio Infocomm, the only company in India with nationwide 4G spectrum, due to a 95% stake it acquired in Infotel Broadband Services. The operator is set to launch its 4G services later this year.

The third operator set to launch 4G is Aircel, which acquired BWA licences for eight circles in 2010. The operator signed an agreement in December with ZTE to roll out its LTE network. During the first phase, ZTE will deploy the network in Chennai, the Rest of Tamil Nadu (RoTN) circle and a number of other important regions.

The government is reportedly ready to hold another LTE auction to distribute additional spectrum, but dates have not yet been confirmed. This news, combined with the announcement that device manufacturers plan to launch more affordable LTE-enabled handsets seems to pave the way for 4G take-off in India.