LTE Strategies: Mobile Broadband full steam ahead

• Publication date: November 2012
• Report size: 136 pages

The LTE technology has now been adopted in all geographical areas and is experiencing a rapid growth. LTE Advanced, the “real 4G”, will be launched in 2013. This report provides an overview of the latest trends in the fast growing LTE market and the reasons driving MNOs' migration to LTE. It also analyses operators' roll-out strategies, LTE networks, technical hurdles, the regulatory environment and LTE spectrum issues, in additi...

The LTE technology has now been adopted in all geographical areas and is experiencing a rapid growth. LTE Advanced, the “real 4G”, will be launched in 2013. This report provides an overview of the latest trends in the fast growing LTE market and the reasons driving MNOs' migration to LTE. It also analyses operators' roll-out strategies, LTE networks, technical hurdles, the regulatory environment and LTE spectrum issues, in addition to spotlighting the key players' different strategies and what will change with LTE.

• With more than 26 million LTE subscriptions at mid-2012, the LTE ecosystem is growing fast. How fast do MNOs implement LTE?
• TD-LTE is now available commercially in 10 countries. How is the TD-LTE ecosystem developing?
• LTE Advanced will arrive sooner than expected - what impact will this have on MNOs' strategies?
• More than 14 frequency bands are already in use for LTE around the World. What are the consequences for devices and international roaming?
• VoLTE has been launched in August 2012 by three operators. What is the current status of VoLTE?
• How are LTE services priced?
• Which services are pushed by LTE operators?

Broadband Industry in China

Contents

1. Executive Summary 10
1.1. Lessons from LTE commercial deployments . 11
1.2. Network strategies 12
1.3. Spectrum constraints 12
1.4. MNOs investments in LTE 12
1.5. Service strategies . 13
1.6. Conclusions on MNOs’ strategies 13
2. Methodology 16
3. Lessons from commercial LTE services . 18
3.1. LTE status 18
3.2. Lessons from the first LTE commercial deployments 20
3.2.1. LTE theoretical and average data rates . 20
3.2.2. LTE ARPUs . 21
3.2.3. A very rapid take-off in South Korea 21
3.2.4. Vodafone . 23
3.2.5. Swapping Mobile WiMAX for LTE: Yota in Russia . 24
3.2.6. LTE as a substitute to fixed networks 24
4. Network strategies and technical hurdles . 26
4.1. LTE-Advanced coming soon 26
4.1.1. LTE-Advanced front runners 26
4.1.2. Equipment providers 30
4.1.3. LTE-Advanced technical characteristics: the “real 4G” 31
4.1.4. Carrier aggregation 33
4.2. LTE-FDD and TD-LTE: real complements? . 37
4.2.1. Technology aspects: towards more complementarity between LTE-FDD and TDLTE 37
4.2.2. Already ten TD-LTE commercial networks 38
4.2.3. WiMAX to TD-LTE migration . 40
4.2.4. TD-LTE develops in parallel with FD-LTE . 41
4.3. Small cells in LTE networks . 48
5. Spectrum constraints 49
5.1. LTE spectrum allocation . 49
5.1.1. LTE spectrum today 49
5.1.2. LTE spectrum fragmentation and the importance of band plans . 54
5.2. Second Digital Dividend and future LTE bands . 57
5.2.1. 700 MHz band . 57
5.2.2. Future LTE bands/New MBB spectrum: which frequency bands? . 59
5.3. Spectrum refarming: the importance of the 1800 MHz band . 59LTE strategies
5.4. LTE in satellite frequency bands 61
6. MNO investments in LTE 64
6.1. LTE investments by major players . 64
6.1.1. LTE-related capex increase to offset 2G/3G capex decline . 64
6.2. Network sharing and outsourcing . 66
6.2.1. Network sharing . 66
6.2.2. Network outsourcing 69
6.3. Higher capillarity and density access networks with small cells and femtocells 71
6.3.1. Small cells are seen as the inevitable complementary network infrastructures to
macro-cells to meet the mobile broadband capacity crunch 71
6.3.2. Network equipment provider pushes small cells 71
6.3.3. Femtocells definitely a critical part of LTE network deployments . 72
6.3.4. Multi-RAN adoption . 74
6.4. LTE is driving need to upgrade backhaul . 75
6.5. LTE costs . 76
6.5.1. LTE for costs savings 76
6.5.2. LTE: lowering the cost of capacity . 78
6.5.3. LTE unit cost per MB is declining over years . 79
7. Service strategies 80
7.1. LTE pricing . 80
7.1.1. Presentation of the first LTE price plans: is LTE sold with a premium? . 80
7.1.2. Caps and speeds for LTE services/Comparison 87
7.2. Voice and SMS over LTE: already a reality in 2012 88
7.2.1. Technological enablers 88
7.2.2. Deployment roadmap for VoLTE . 90
7.2.3. Issues for VoLTE . 92
7.3. New services on LTE networks 93
7.3.1. Rich Communications Suite (RCS) 94
7.3.2. Mobile cloud-based services . 96
7.3.3. Video services . 99
7.3.4. Emergency services 100
7.3.5. M2M services potential 102
7.4. Devices strategy - Review of LTE device availability . 105
7.4.1. USB dongles and mobile hotspots . 105
7.4.2. Mobile handsets: early developments . 105
7.4.3. Tablets: LTE as differentiating advantage? . 106
7.4.4. Other devices: a market still in its infancy 107
7.4.5. Fixed routers and/ or gateways . 107
7.4.6. eReaders . 108
7.4.7. Mobile gaming devices 108
8. Conclusions for MNOs 109
8.1. What can be learnt from the main LTE networks? . 109
8.2. MNOs strategic positioning 110LTE strategies
www.idate.org © IDATE 2012 5
8.3. What can we expect in the coming years? . 112
8.4. LTE market forecasts 2012-2017 . 112
8.4.1. Subscription forecasts . 112
8.4.2. LTE revenue forecasts 115
9. Annex: LTE devices 116
9.1. USB dongles and MiFi devices 116
9.2. Handsets 116
9.3. Tablets 119
9.4. M2M devices 120
9.5. Fixed routers 120
10. Annex: Case studies . 121
10.1. AT&T 121
10.1.1. Overall presentation 121
10.1.2. Investments . 121
10.1.3. Spectrum . 121
10.1.4. Devices and services . 121
10.2. DOCOMO . 122
10.2.1. Overall presentation 122
10.2.2. Investments . 123
10.2.3. Spectrum . 123
10.2.4. Devices and services . 123
10.3. China Mobile 124
10.3.1. Overall presentation 124
10.3.2. Investments . 124
10.3.3. Spectrum . 125
10.3.4. Devices and services . 125
10.4. TeliaSonera 126
10.4.1. Overall presentation 126
10.4.2. Spectrum . 126
10.4.3. Devices and services . 126
10.5. T-Mobile 128
10.5.1. Overall presentation 128
10.5.2. Spectrum . 128
10.5.3. Investments and deployments . 128
10.5.4. Devices and services . 128
10.6. Verizon Wireless 129
10.6.1. Overall presentation 129
10.6.2. Spectrum . 129
10.6.3. Investments and deployments . 129
10.6.4. Devices and services . 129LTE strategies
10.7. SKT . 131
10.7.1. Overall presentation 131
10.7.2. Investments and deployments . 131
10.7.3. Devices and services . 131
10.8. LG U+ . 132
10.8.1. Overall presentation 132
10.8.2. Investments and deployments . 132
10.8.3. Devices and services . 133
10.9. Telstra . 134
10.9.1. Overall presentation 134
10.9.2. Devices and services . 134
10.10.Yota 135
10.10.1. Overall presentation 135
10.10.2. Spectrum . 135
10.10.3. Investments and deployments . 136
10.10.4. Devices and services . 137LTE strategies

Tables

Table 1: VoLTE status and launch date 13
Table 2: LTE commercial networks and subscriptions in Q2 2012 . 18
Table 3: Q1 and Q2 2012 subscriptions Figures for the ‘Top 10’ LTE networks 19
Table 4: Q2 2012 subscription Figures for the ‘Top 10’ LTE countries 19
Table 5: LTE speeds (commercial networks) 20
Table 6: LTE and 3G speeds in the USA 20
Table 7: LTE ARPU Figures 21
Table 8: LTE coverage . 22
Table 9: LTE-Advanced front-runners – first implementations 26
Table 10: LTE-Advanced performance . 32
Table 11: Possible UE RF architectures for LTE-Advanced resource aggregation 34
Table 12: Frequency bands combinations for carrier aggregation 36
Table 13: Main TDD and FDD bands 37
Table 14: Adoption of TD-LTE technology 38
Table 15: TDD and FDD mode advantages and drawbacks . 39
Table 16: Main frequency bands for UMTS/HSPA/LTE deployment – TDD mode . 40
Table 17: Mobile WiMAX to TD-LTE migration plans 41
Table 18: First-phase testing sites and assignments 43
Table 19: Spectrum assignment for LTE testing . 44
Table 20: LTE commercial networks and associated frequency bands 49
Table 21: Main LTE frequency bands by geographical area . 51
Table 22: Main characteristics of frequency bands for LTE 52
Table 23: Availability dates of LTE spectrum 53
Table 24: LTE devices by frequency band 54
Table 25: Potential use of FDD bands for LTE . 54
Table 26: Potential use of TDD bands for LTE . 55
Table 27: Most likely bands for LTE international roaming . 56
Table 28: Potential new frequency bands for mobile broadband – Europe . 59
Table 29: State of LTE 1800 deployments and trials 60
Table 30: Benefits and risks of passive mobile sharing 67
Table 31: Benefits and risks of active mobile sharing . 68
Table 32: Examples of LTE network sharing agreements 69
Table 33: Potential gains and risks of network outsourcing 71
Table 34: Base station shipments estimates 73
Table 35: Elements of potential savings to reduce network costs for a LTE network . 77
Table 36: NTT DOCOMO Xi rates 81
Table 37: NTT DOCOMO Xi rates –smartphones and tablets 81
Table 38: LG U+ LTE plans 82
Table 39: SK Telecom LTE plans . 83
Table 40: KT LTE plans 84
Table 41: Verizon Wireless rates 84
Table 42: AT&T rates 85
Table 43: AT&T Mobility shared data plans 86
Table 44: Telia rates . 86
Table 45: LTE tariff comparisons 87
Table 46: Voice over LTE – interworking with common circuit switched voice technology . 89
Table 47: VoLTE status and launch date 90
Table 48: RCS launch dates . 95
Table 49: SKT RCS services features 95LTE strategies
Table 50: Standardised QCI characteristics . 101
Table 51: Bandwidth required by M2M application . 103
Table 52: Modules price by technology used, 2011 104
Table 53: LTE frequency bands for the various versions of the iPhone 5 . 106
Table 54: LTE USB dongles and MiFi devices . 116
Table 55: LTE handsets 116
Table 56: LTE tablets 119
Table 57: M2M LTE devices . 120
Table 58: LTE fixed routers 120
Table 59: AT&T LTE devices 122
Table 60: AT&T LTE plans . 122
Table 61: NTT DOCOMO Xi Flat-rates billing plans . 124
Table 62: NTT DOCOMO Xi Two-tiered flat-rate billing plans 124
Table 63: China Mobile spectrum . 125
Table 64: Telia LTE smartphones rates 127
Table 65: Telia LTE data-rates . 127
Table 66: Sonera rates – Finland 127
Table 67: TeliaSonera rates – Denmark . 128
Table 68: SKT LTE tariffs . 132
Table 69: LG U+ LTE plans 133

Figures

Figure 1: LTE in Figures 11
Figure 2: LTE front-runners strategic positioning . 14
Figure 3: LTE subscriptions forecasts 15
Figure 4: Geographical mapping of early LTE commercial deployment . 18
Figure 5: 10 million LTE subscribers in one year . 21
Figure 6: Reasons for subscribing to LTE 22
Figure 7: Average 3G and LTE data consumption in South Korea 23
Figure 8: Mobile data consumption in South Korea . 23
Figure 9: HomeFusion LTE outdoor antenna and principle 25
Figure 10: LTE-Advanced development scenario 29
Figure 11: Carrier aggregation in LTE-Advanced 32
Figure 12: Relay function . 33
Figure 13: Release 10 LTE-Advanced carrier aggregation 34
Figure 14: Carrier aggregation example 35
Figure 15: Supplemental downlink principle . 36
Figure 16: Main TD-LTE backers . 42
Figure 17: TD-LTE trials in China . 43
Figure 18: TD-LTE devices used by China Mobile for the tests . 44
Figure 19: SoftBank TD-LTE subscribers 46
Figure 20: UK Broadband spectrum . 48
Figure 21: Applications of small cells . 48
Figure 22: Timetable for LTE spectrum in Western Europe . 53
Figure 23: 700 MHz band plan in the USA . 56
Figure 24: Scenario for a second Digital Dividend in Europe, Africa and the Middle East . 57
Figure 25: APT 700 MHz plan 58
Figure 26: APT band plans 58LTE strategies
Figure 27: Harmonised FDD arrangement of 698-806 MHz band . 58
Figure 28: Positioning of ICO and TerreStar in the 2 GHz band (S-band) . 61
Figure 29: NTT DOCOMO LTE expansion plans, 2011-2015 66
Figure 30: Passive sharing 67
Figure 31: Active sharing . 68
Figure 32: Comparative network outsourcing scope 70
Figure 33: Femtocells operator commitments and deployments 72
Figure 34: NTT DOCOMO RAN architecture evolution with Remote Radio Head . 73
Figure 35: Evolution of Telefonica mobile network . 74
Figure 36: Comparison of cost between SingleRAN and non-SingleRAN . 75
Figure 37: Operator strategies in migrating backhaul networks . 76
Figure 38: LTE capex lower than current mobile capex . 77
Figure 39: Potential costs savings for a typical MNO in developed markets (brownfield case) 78
Figure 40: Comparison of performance and cost for today and LTE networks 78
Figure 41: LTE increases capacity while lowering cost per MB . 79
Figure 42: Capex and opex per MB, eurocents (EUR), 2010-2015 . 79
Figure 43: NTT DOCOMO Xi rates (commercial launch 12/2010) . 81
Figure 44: CS fallback architecture 88
Figure 45: Voice over IMS . 89
Figure 46: Sprint’s VoLTE plans 91
Figure 47: SK Telecom – VoLTE characteristics 91
Figure 48: VoLTE introduction by NTT DOCOMO . 92
Figure 49: premium LTE services from LG U+ . 93
Figure 50: RCS services 94
Figure 51: SKT RCS launching plan 95
Figure 52: Mobile cloud services 96
Figure 53: Mobile cloud for storage and processing 96
Figure 54: DOCOMO network cloud 97
Figure 55: The NTT DOCOMO Shabbette Concier service . 98
Figure 56: Translator phone service 98
Figure 57: eMBMS logical architecture 100
Figure 58: New emergency services solutions from the industry . 102
Figure 59: M2M development by vertical industry 103
Figure 60: LTE in Figures 109
Figure 61: LTE front-runners strategic positioning . 111
Figure 62: LTE subscriptions forecasts 115
Figure 63: LTE revenue forecasts (million EUR) 115
Figure 64: NTT DOCOMO LTE plans . . 123
Figure 65: China Mobile LTE plans: . 125
Figure 66: Verizon LTE deployment . 129
Figure 67: SKT LTE coverage . 131
Figure 68: LG U+ LTE coverage 132
Figure 69: Yota’s traffic – LTE launch: . 135
Figure 70: Yota’s business model 136
Figure 71: Yota: RAN sharing with MegaFon . 136

Broadband in China

China Number Of Broadband Internet Subscribers (`000)

• $ 250
• Industry data
• February 2013

Yearly, From 2000 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union (ITU)), BMI research, Operators

• Industries : Broadband
• Countries : China

China Number Of Broadband Internet Subscribers, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2001 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union (ITU)), BMI research, Operators

• Industries : Broadband
• Countries : China

China Number Of Broadband Internet Subscribers/100 Inhabitants

• $ 250
• Industry data
• February 2013

Yearly, From 2001 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union (ITU)), BMI research, Operators

• Industries : Broadband
• Countries : China

China Number Of Broadband Internet Subscribers/100 Inhabitants, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2001 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union (ITU)), BMI research, Operators

• Industries : Broadband
• Countries : China

Asia Greater China Broadband Subscribers, % Of Population, % Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2006 To 2016
By Business Monitor International
Source: BMI

• Industries : Broadband
• Countries : China