opinion


LTE Asia reveals market reality

The low penetration in Asia-Pacific is due to its broad, diverse and fragmented make-up

Mobile operators and vendors from Asia gathered in Singapore to discuss about LTE during Informa’s latest LTE Asia event. Although interest in LTE soared high throughout the conference, there were several interesting topics that stood out during discussions and conference presentations.

LTE deployments in Asia

Although there are already several live LTE networks in Asia, conference delegates were somewhat confused regarding the value proposition of LTE in these markets. Nevertheless, Asian mobile operators are keeping a close eye to LTE network deployments worldwide. Since mobile operators in developed Asian markets have already deployed dense HSPA networks, the move to LTE is meticulously scrutinized. Few network executives also mentioned Super WiFi and whether this has the potential to disrupt the success of LTE in developing regions.  There were also mobile operators that were interested in the rural market and following the German deployment example, but these were also questioning the viability of the LTE business model.

The growth of traffic was also discussed and P1 networks of Malaysia (WiMAX operator) stated that monthly average download traffic is 12GB per subscriber while their heaviest user downloads 548GB/month. NBNco of Australia also aims to rollout a nationwide layer of broadband connectivity through fibre, satellite and LTE, removing the mobility elements from the LTE standard.

In terms of operator concerns, the biggest by far in the conference was the availability of devices.

LTE devices and ecosystem

Operators and vendors agreed that it’s handsets and devices that will fuel the growth of LTE networks in the region. Surprisingly, handset vendors were absent from the LTE conference but consensus was that current smartphones are not advanced enough to attract mass market interest. Given the fact that smartphones present the most lucrative business model for mobile broadband networks, it is understandable that mobile operators are cautiously waiting for the ecosystem to evolve past the second or third iteration of devices before investing heavily in a completely new network.

When operators were asked about roaming and spectrum fragmentation, their answer was that roaming is not a primary concern but may become a major issue in the future. Similar to other regions, Asian mobile operators will be able to:

  • Rely on regulators for new LTE spectrum or
  • Refarm existing spectrum to deploy LTE. Incidentally, the 1800MHz band received the most interest during the conference, primarily due to refarming capabilities and also being a compromise between lower frequencies (better coverage) and higher frequencies (more bandwidth)

In other words, Asian mobile operators that are indeed deploying LTE are doing so spectrum that is available to them. Informa Telecoms & Media has identified 8 key spectrum bands for LTE globally, which is expected to delay economies of scale for cheaper devices and worldwide adoption of a smaller number of LTE frequencies. Mobile operators in the conference agreed that spectrum fragmentation is a potential barrier for the worldwide adoption of LTE and harmonization will be necessary in the future.

LTE-Advanced

Surprisingly, mobile operators in the region have already started to discuss LTE-Advanced, even before deploying LTE themselves. The biggest reason for doing so is Carrier Aggregation, which allows discrete and separate parts of spectrum to be used in the same LTE-A network. It’s also a fact that the majority of operators own fragmented spectrum assets and LTE Advanced has the potential to utilize these. Nevertheless, the discussion around LTE-Advanced is in very early stages and a conference delegate pointed out that Carrier Aggregation does impose stringent requirements on the device side which brings the focus back to the importance of the ecosystem.

Nevertheless, if it would be one takeaway that the conference led to, it would be:

Spectrum is king.


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