Will LTE Signal the End of GSM?

At the end of last year NTT DoCoMo launched their LTE network. They had announced back in May, at the LTE World Summit that they have a roadmap in place to migrate remaining customers on thier 2G network to 3G and LTE and plan to swich off the 2G network within 2 years. So we're looking at a switch off date of May 2012. This isn't as agressive and anmitious as it seems, as DoCoMo has an unusually high proportion of its subscrbers already on 3G. Coupled with the fact that DoCoMo uses the rather niche PDC technology for its 2G network, you can understand why they want to part ways with it.

So why aren't other mobile operators in mature markets as keen as NTT DoCoMo is on this strategy? Surely the cost of running a 2G, 3G and LTE network is not sustainable given declining revenues? The first reason is that no operator will switch of their GSM network until there is complete ubiquity of at least 3G. Secondly, GSM provides an excellent voice service and in markets such as the UK where customer bases are polarised either towards being very smartphone savy or just wanting a very basic mobile phone to make phone calls. In this case why should UK opeators go to the effort of migrating everyone to 3G/LTE when 65% of their revenue still comes from voice and the GSM network is so reliable? The third reason is that even though the difference in QoS between EGDE and 3G is considerable, EDGE is still good enough for basic web browsing etc (remember the first iPhone?)

If we start to see 99% coverage requirements for 3G as they have in France, then this will make the case for operators to commence a roadmap for 2G switch off. This however will not happen overnight. Coverage requirements such as the example in France can only really come in to place after the regulators have re-farmed the 900MHz band for UMTS or the 800MHz digital dividend band for LTE - or as in France's case, both.

Operators seem to be resigned to the fact that for now they will have to operator 3 different networks (4 if they operate a series of WiFi hotspots!). In this situation optimising traffic-flows across different networks and having the right policies in place for managing capacity effectively is essential.

If DoCoMo is successful then operators may think again, but for now is seems that GSM still has a long life ahead.

Feedback from the LTE Customer Consultation Day

Taking part in the LTE customer consultation day, were some of the top vendors including Ericsson, Huawei, NSN, Motorola and others including picoChip, Freescale, Signalion and Rohde & Schwarz. They attended the consultation day, as they really wanted to get involved in the LTE conferences in 2010 and to get their input into the agenda.

With regards to content, the LTE business model that the most important topic that they highlighted. Now that a lot of the technical details have been ironed, operators have committed to LTE the attention has been turned to the business model and how can operators monetise LTE.

Can we really still have flat rate data plans? We've seen the cost/revenue divergence diagram a hundred times at various conferences, but has anyone really come up with an answer as to how operators need to address this divergence and try to take control of the network? With LTE operators are able to differentiate services and charge accordingly to the customer's QoS requirements, but there is no clear indication that operators are willing to change the their pricing models.

The application and service providers are a key new entrant into the market and there needs to be a discussion on how operators can profit more from these applications and services - will LTE make operators think differently?

Who are we going to be selling LTE to beyond the average user? LTE would be attractive to vertical markets such as the public safety organisations, the healthcare industry and I as mentioned in one of my earlier blogs; the car industry.

These are certainly areas to explore and it will be interesting to get feedback from different markets, not involved in the telecommunications industry and hear about what they they think of the future of mobile broadband.

KDDI Finally Makes Its LTE Schedule Clear...

KDDI announced that it would start deploying LTE and is looking to complete the deploymenr by 2012. The contract was awarded to Motorola and NEC a few days ago.

The deal includes base stations from Japan's NEC and although the announcement gave no idea of the breakdown of the orders, but most analysts seem to think that Motorola will get the lion's share of the order.

KDDI's network is a full two years behind that of NTT DoCoMo. The news lifted KDDI's stock, which had previously not made its LTE schedule clear as it is also a major investor in Japanese mobile WiMAX with UQ Communication which has an aggressive WIMAX rollout schedule. The operator has set itself a target of more than 90% population coverage nationwide by the end of March 2010. By that time, UQ says it will have 1,161 cities covered through 38,000 base stations, which includes 19,000 femtocells.

KDDI will deploy its LTE network in both 1.5GHz and 800MHz bands and will conduct LTE trials in mid 2010.

At the LTE World Summit in London in Novmber 2008, the KDDI speaker was very unclear about its strategy when he said that they would be deploying both LTE and WiMAX networks and left the audience feeling very confused. KDDI is clearly not putting all its eggs in the LTE basket, but why the need for the two networks, no one is sure either.

How Will Telecom Operators in the Middle East Respond to Zain Bahrain's LTE Deployment Announcement?

Zain Bahrain announced today that is will be investing in a state of the art LTE upgrade. The contract was awarded to Nokia Siemens Networks. Zain wants to provide nationwide coverage and provide new products and services to its customers.

So, how will other major operators in the Middle East respond to this announcement? Zain has always been a leader and not just in the middle east, for example was the first operator in the world to build a nationwide fixed WiMAX network.

Aaron Boasman, Senior Researcher for Middle East conferences at Informa Telecoms & Media said, "Zain's announcement paves the direction for other operators in the region. Its is fair to say that other tier 1 operators such as Etisalat and Saudi Telecom will also go down the LTE route. WiMAX will only be used as a stop gap solution."

Javier Sanchez, Strategy & CEO Support Director from Zain spoke at the recent LTE World Summit in Berlin on the drivers for LTE in emerging markets, so there has clearly been a strategy in place for some time now.

In a region where fibre deployments are taking priority, with new "Smart Cities" being built complete with a fibre to the home, it will be interesting to see how much operators concentrate on wireless infrastructure. The Middle East is a very indoor society, with FTTH and IPTV deployments so far proving to be very successful. This announcement, may however make other operators in the region sit up and take notice and they may start to feel that LTE is not actually that far away.

LTE Real World Performance, Hitting the Target?

LTE performance in "real world" conditions has been a very big topic of discussion at Informa's LTE World Summit conferences for a while now and we have slowly been getting a better idea of what to expect from operator and vendor trials that have been taking place as well as from the LSTI.

Nokia Siemens Networks today demonstrated a 35 Mbps LTE service at its offices in Centurion. The system handled bandwidth hungry applications like high definition movie streaming, video conferencing and online gaming with ease, while voice quality over the test network was excellent. NSN had previously demonstrated peak data rates of 160 Mbps.

It was about a year ago when I was speaking with a senior level executive from Vodafone, who said he expected average data rates of about 30Mbps from LTE, far higher than what we get with highly congested HSPA networks at the moment one might add. It certainly seems that LTE is hitting the mark when it comes to expectations of average data rates. Vodafone only came out and endorsed LTE very recently, one of the last major tier 1 operators to do so. They clearly wanted to be absolutely certain that LTE was up to scratch!

LTE World Summit Interviews Now Available!

In depth interviews with key speakers at the recent LTE World Summit in Berlin are available to watch online.


Interviewees include: Ed Candy, Former CTO, 3, Franz Seiser, Head of Core Network Architecture, T-Mobile, Klaus-Jurgen Krath, EVP, Radio Networks Engineering & Quality, T-Mobile, Hans Erik Karsten, Vice President, Network Technologies, Telenor, Marc Fossier, Former CTO, France Telecom Group, Takehiro Nakamura, Director, Radio Access Network Development Department, NTT DoCoMo and many more.

There is also an archive of older interviews available on the www.lteconference.com site.