As the demand for data from consumers continues to swell, the need to move from 3G to LTE is becoming ever more apparent to carriers. But while the technical and business cases are readily apparent, the real challenge is obtaining radio spectrum. Spectrum is the life-blood of every mobile operator and its scarcity makes its acquisition a difficult and usually expensive undertaking.
Fortunately the LTE standard can be deployed in a wide range of frequency bands, which enables operators to roll it out, at least initially, with whatever spectrum they have available. “The standard allows LTE to be deployed not only in different spectrum, but in different amounts of spectrum,” Alan Hadden, president of the Global Suppliers Association (GSA) tells Telecoms.com. He goes on to say that the standard has been defined to “recognise very much the individual needs either of a particular operator, country or region—or indeed globally.”
While this is a real plus for LTE it does present the problem of wide spectrum fragmentation. According to a recent report from Informa, (LTE Spectrum Strategies and Forecasts to 2016), LTE will be deployed in at least 20 bands worldwide, with a total of ten bands to be used in the Asia-Pacific region. In Japan alone, for example, there are seven bands that have been earmarked by operators.
As the Informa report observes, this lack of consensus over spectrum is a cause for concern. The uncertainly over when spectrum will be released by regulators and how much they will have to pay for it, is causing operators to hold back on deployments, which in turn is potentially slowing down the creation of a worldwide eco-system and stymieing efforts to create economies of scale around devices.
This issue is the prime reason why there is a delay in the production of LTE smartphones. Chipset manufacturers are looking to the operators before they commit, who are in turn looking to what is available from regulators and indeed what other operators are doing. According to Hadden this is why 700MHz is currently the most widely supported frequency for LTE—simply due to its use in the US, where LTE is most widely deployed. What the industry needs then is an awareness of what the most popular bands will be.
“You do have this huge quantity of spectrum options. But for a successful business what you need are standards, common agreements and international alignment. And what’s likely to emerge will be a series of prime bands, or core bands if you will, for LTE.”
According to Hadden the GSM standard is a blueprint for this double-band approach. “It’s a reflection of the success of GSM. GSM was a common band, and a second band was available So if you look at what’s happening in LTE; basically what are the common bands?”
The most popular approach, he says, is to go for a higher frequency band for adding capacity, and a lower frequency band for wider coverage using fewer base stations and in-building penetration. “New spectrum is coming, more or less, either at the higher capacity 2.6GHz level, which is an internationally agreed spectrum for these systems, and then also in the digital dividend space.”
In the US this digital dividend spectrum is the 700MHz mentioned above, which had already been freed up by June 2009. In Europe however, this process is still in its early stages. According to Hadden, this is having an impact on Asian deployments, which he believes still looks to Europe for its lead in telecoms, if only due to economies of scale around devices.
“The licensing is sort of underway, but I think you need more of the major markets to have completed that allocation. If you look at the big markets whose decisions then impacts Asia, which are the major economies of France, Spain, Germany, Italy and the UK, then the question arises: Which of those has actually auctioned and allocated 2.6GHz?”
Hadden points out that, of these European markets, only Germany has actually deployed LTE. Spain has completed its auction, France is in the process of doing so and the others are all some way off.
As well as 2.6GHz, 1800MHz is also likely to be of great interest in Asia. “The real beauty of 1800,” Hadden says, “is that it’s already a common allocated band that can be used to deploy technologies other than GSM. And in many cases there is adequate spectrum that will allow a competitor to allocate 10MHz for LTE, and that’s really attractive. It’s clearly already happening and, as it does, the ecosystem will begin to support it.”
The evidence is certainly there to back up Hadden’s assertion. Telstra in Australia is starting to roll out LTE at 1800MHz, and is part of an 1800MHz alliance that also includes Deutsche Telekom and France Telecom, which can only help with economies of scale. Singaporean carrier StarHub has also announced plans to use 1800.
One country that looks as though it might be following a different path, though, is Japan. NTT DoCoMo is refarming its UMTS 2100MHz band for LTE, and has called on operators worldwide to show support by following suit, something that Hadden feels is unlikely.
“There will always be solutions found for specific requirements. While DoCoMo is a major player with major market reach, that doesn’t make 2100MHz a major band for LTE. I don’t think that what’s happening in Japan will spill out elsewhere.”
One Asian country that is likely to have an impact on the LTE market worldwide though is China. Its focus on TDD spectrum is being echoed around the world, with many operators choosing to use the technology. The attractiveness of TDD for operators stems from the fact that spectrum tends to be cheaper than FDD, while its time division nature is touted as a better match for the asymmetrical nature of internet use.
For Hadden, the tipping point though is the recent announcement by Clearwire in the US that it will be moving to LTE, using TDD technology. “It’s a positive outlook [for TDD] with the potential for a global standard. It’s meeting needs and being tested. But what’s important about Clearwire, and with respect to the Chinese, is that it’s the first commitment in a well developed market.”
Ultimately, Hadden believes that identifying core bands is vital for the efficient development of LTE. Aside from 700MHz in the US, he believes that the dominant bands will be 800MHz, 1800MHz and 2.6GHz. While there may be another 16 other frequency bands in operation by 2016, it is these four that could form the basis of a global standard, delivering the benefits of economies of scale to operators and vendors, and the vital ability to roam worldwide for LTE users.
Will regulators ever be able to catch up with the rate of change in the telco/tech industry?
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