Joint Maravedis and Telecom Asia LTE Survey

1. cover Story
John C. Tanner
LTE differentiation:
it’s all in the packaging
Telecom Asia and Maravedis survey the state of play of LTE and take a look beyond the
networks to how commercial LTE operators are selling their services. The short answer:
a mix of the obvious with whatever works
T
he mobile industry’s transi- LTE, with another 177 cellcos commit- Now that LTE services and devices
tion to LTE is well and truly ted to it, and another four conducting are commercially available, it’s become
under way. This time last year, trials of both FDD-LTE and TD-LTE. both possible and crucial to examine
LTE had only been commer- Meanwhile, service uptake is grow- not just what operators plan to do with
cially launched in a handful ing at reassuring triple-digit rates – the LTE, but what those who have launched
of European markets. As of June 30, same Maravedis report said that sub- commercially are actually doing with it
according to the 4GCounts Quarterly scriber numbers for LTE worldwide now. The rise of smartphones and tab-
Report from analyst firm Maravedis, 20 grew 478% between Q1 and Q2 this lets has thrown 3.5G business models
operators had commercially launched year. into flux, and LTE is a chance to not only
www.telecomasia.net Telecom Asia Aug/Sept 2011 17

2. cover Story
What is included in your planned LTE service are going for the obvious difference –
throughput speeds – and charging ac-
as a value-for-money proposition (in
other words, more bits for your buck).
What are the main traffic drivers for
bundle options? Figure 1 cordingly, but plenty of others are will- Around 11% said they were using LTE moving to LTE? Figure 2
ing to experiment with different ideas to create tiered service packages while
to leverage LTE to take mobile broad- 18% said they were selling it as an un-
band services into uncharted territory. limited data plan.
Interestingly, a quarter of respond-
Faster than 3G ents said they weren’t pricing or pack-
One of the biggest tricks in selling aging LTE any differently from 3G.
LTE services to consumers is how to dif- The results reflect the general state
ferentiate it from existing 3G services. of flux that the mobile industry finds
At the moment, that means speed. Well itself in with mobile broadband as they
over half of respondents to our survey seek business models that move away
said they were emphasizing LTE’s speed from costly all-you-can-eat plans, but
gains as the key difference over 3G. also offer more than just a dumb data
source: Telecom Asia & Maravedis
To be fair, we are talking about se- pipe, and finding ways to add value to
rious throughput gains. According what is, at face value, a faster version of
to Maravedis, numerous LTE opera- 3G. With no killer business model to device/SIM packages ranking a close coverage at commercial launch, 47%
source: Telecom Asia & Maravedis tor tests have reported peak download point to (yet), operators appear to be second. Smaller groups of operators said they were aiming for national cov-
speeds between 30 Mbps and 80 Mbps going with whatever business model are also looking at quad-play bundles erage.
throw capacity at all that traffic and run coverage, fallback options, offload strat- and delays on the order of a few tens of makes sense in a given market, seeing and selling services like video and other The key term is “at commercial
it more efficiently, but also develop new, egies and deployment challenges, but milliseconds, which makes a serious dif- what works and what doesn’t. OTT content on top of LTE. launch” – most operators have yet to
improved business models better suited also how commercial LTE operators are ference for real-time apps like HD video As for the LTE packages themselves, reach that stage. According to the sur-
to the new post-3G era. selling their services – and how up-and- and gaming. the majority of respondents (65%) see Beyond LTE islands vey, only 16.4% of respondents have
To that end, Telecom Asia and Mara- coming LTE players intend to compete. However, when it comes to translat- LTE as a straight data access service for The current wisdom of LTE rollouts commercially launched LTE. Just over
vedis – with sponsorship from Huawei As such, we asked how they differenti- ing that into service packages, operators now (see Figure 1). But many are also has been to target high-traffic areas first 8% are in soft-launch mode, while
Technologies – conducted a global sur- ate LTE from existing 3G services, how are taking a variety of approaches. already looking at other ways to create – i.e. urban centers – and then progress- 29.5% are still in trials and around 15%
vey of operators to assess the current they’re adding value to LTE beyond the Only a third of respondents said richer, value-added packages. ing into the suburbs until full national remain in the testing phase. For many
state of play with LTE – not just where obvious speed gains and what devices they are pitching LTE as a premium Interestingly, cloud-based services is coverage has been achieved. However, operators, commercial launch of LTE
cellcos are with their LTE deployments are in their service pipeline. service over 3G. The same number the top planned value-add mentioned while the majority of respondents isn’t planned to happen for the next
in terms of technical aspects like initial The short answer: many operators also said they were positioning LTE (45% of respondents), with multiple (59%) said they would provide urban couple of years.
LTE commitments and trials in Asia-Pac
operator type status year operator type status year operator type status year operator type status year
AustrAliA indonesiA nepAl sri lAnKA
Optus (SingTel) FDD-LTE Committed Q4 2013 Excelcomindo (XL Axiata) FDD-LTE Committed Q4 2013 Ncell FDD-LTE Committed Q4 2012 Dialog Telekom (Axiata) FDD-LTE Committed Q4 2012
Telstra FDD-LTE Committed Q4 2011 Indosat (Qtel) TD-LTE Commitments and/or Trials Q4 2013
vividwireless TD-LTE Commitments and/or Trials Q4 2012 Telkomsel FDD-LTE Committed Q4 2013 philippines tAiwAn
(Telekomunikasi Selular) Globe FDD-LTE Committed Q4 2012 CHT TD-LTE Commitments and/or Trials Q1 2013
ChinA Digital FDD-LTE Committed Q4 2013 Combined TDD and FDD
China Mobile FDD-LTE Committed Q4 2012 JApAn Telecommunications Phi FarEasTone TD-LTE Commitments and/or Trials Q1 2013
China Telecom FDD-LTE Committed Q4 2012 EMOBILE (eAccess) FDD-LTE Committed Q4 2012 Piltel FDD-LTE Committed Q2 2012 Global Mobile Corp TD-LTE Commitments and/or Trials Q1 2013
KDDI FDD-LTE Committed Q4 2012 Smart (PLDT) FDD-LTE Commercial LTE Networks Q2 2012
hong Kong NTT DoCoMo FDD-LTE Commercial LTE Networks Q4 2010 VietnAM
CSL (Telstra) FDD-LTE Commercial LTE Networks Q4 2010 SoftBank Mobile TD-LTE Commitments and/or Trials Q4 2011 singApore CMC Telecom FDD-LTE Committed Q4 2012
Hutchison (3) FDD-LTE Committed Q4 2012 M1 FDD-LTE Committed Q2 2012 FPT Telecom FDD-LTE Committed Q4 2012
PCCW FDD-LTE Committed Q4 2011 MAlAysiA SingTel FDD-LTE Committed Q2 2012 Viettal Vietnam FDD-LTE Committed Q4 2012
SmarTone-Vodafone FDD-LTE Committed Q4 2014 Asiaspace TD-LTE Commitments and/or Trials Q1 2013 StarHub FDD-LTE Commercial LTE Networks Q4 2011 VNPT FDD-LTE Committed Q4 2012
Celcom (Axiata) TD-LTE Commitments and/or Trials Q1 2013
indiA DiGi (Telenor) TD-LTE Commitments and/or Trials Q1 2013 south KoreA source: Maravedis’ 4GCounts Quarterly Report
Bharti Airtel TD-LTE Commitments and/or Trials Q2 2012 Maxis TD-LTE Commitments and/or Trials Q1 2013 LG Uplus FDD-LTE Committed Q4 2011 ** The next update to the global 4GCounts Quarterly Report will be released
RIL/Infotel TD-LTE Commitments and/or Trials Q4 2011 Packet One Networks (P1) TD-LTE Commitments and/or Trials Q1 2013 KT FDD-LTE Committed Q4 2011 in October/November.
Tikona TD-LTE Commitments and/or Trials Q4 2013 Telekom Malaysia (TM) FDD-LTE Committed Q4 2012 SK Telecom FDD-LTE Committed Q3 2011
U Mobile TD-LTE Commitments and/or Trials Q1 2013
18 Aug/Sept 2011 Telecom Asia www.telecomasia.net www.telecomasia.net Telecom Asia Aug/Sept 2011 19

3. cover Story
What is your planned capacity reinforcement is still growing, it’s no longer the big-
gest driver of internet traffic. Cisco’s
The only solution to the evolv-
Banking on
strategy for LTE?
smartphones
Figure 3 VNI (Visual Networking Index) says
that video surpassed P2P as the biggest ing wireless broadband
w
single category of traffic last year, and
is only going to get bigger, accounting capacity crunch is a hetero- e asked operators what kinds of de-
for 50% of internet traffic by the end vices they plan to offer during the
of next year. geneous access network com- first year of commercial LTE service.
Unsurprisingly, dongles rated the high-
posed of macro cells plus a
With the onslaught of video and web
traffic expected for mobile broadband, est (71%), but smartphones was a surprisingly close
operators aren’t taking any chances on
capacity and are planning some form of range of small cell solutions second (58%), considering there are barely any LTE
handsets available at all (see Figure 4).
offload strategy to manage data traffic So far, the only ones to have surfaced are the
(see Figure 3). Not unexpectedly, Wi-Fi Samsung Craft (for MetroPCS) and the HTC Thunder-
is the top offload option cited by sur- tions space, with the LTE small cell exclusively), backhaul, capex, site Bolt (for Verizon Wireless), with another handset –
vey respondents (55%), but femto and market projected to appear com- access, legacy network support the Motorola Droid Bionic – reportedly due to come
pico cells were virtually tied for second mercially next year and accelerate and, of course, the voice support out this month (also for Verizon). And all three are
place at 39% and 37%, respectively, in- in 2013 and 2014. issue. LTE/CDMA handsets, which effectively limits distribu-
dicating that operators are open to a “All these technologies prom- Indeed, the problem of voice tion to the US.
heterogeneous approach to offload, says ise the same thing – to increase support for LTE is still an issue On the other hand, Deutsche Bank analysts re-
Donoso of Maravedis. overall network capacity and re- for 37% of respondents. As for fa- cently revised their forecasts for LTE handset ship-
source: Telecom Asia & Maravedis “This pattern reflects a 2010 -2011 lieve the traffic load on the macro vored solutions (which we asked ments in the US in 2011 from three million to six
industry-wide agreement that the only cell layer caused by hotspots,” he in a separate question), 65% of million units due to higher than expected demand.
solution to the evolving wireless broad- says. When electing to increase ca- respondents said they planned to Meanwhile, by most accounts 2012 will be the year
Maravedis senior analyst Fernando LTE. The results reaffirm video as the band capacity crunch is a heterogene- pacity and relieve hotspots, carri- use VoLTE – the preferred solution that LTE-enabled smartphones start to appear, possi-
Donoso adds that “national coverage” biggest traffic driver operators are fac- ous access network composed of macro ers can go toward any, or all, of the of the GSM Association. However, bly including an LTE iPhone, although Apple has been
is a more likely option at commercial ing, followed closely by web traffic (see cells plus a range of small cell solutions: small cell technologies.” significantly, over 45% said they typically coy about whether it will be the iPhone 5.
launch for markets whose compact ge- Figure 2). micro cells and pico cells, carrier Wi-Fi, were planning to implement CS In any event, since the question in our survey
ography, regulatory will and population Perhaps more surprising is how lit- and in the view of most industry play- Spectrum and voice Fallback. The math indicates that specifies “first year” of service, the responses indi-
distribution allow it. Still, the fact that tle P2P traffic figures into the equation. ers, femto cells,” Donoso says. challenges at least some operators are con- cate confidence from operators that LTE smartphones
close to half of respondents are aim- Less than 28% of respondents named He adds that Wi-Fi ranks some- No technology rollout is with- sidering a hybrid approach, or at will be available on time (though the fact that some
ing for national coverage indicates that P2P as a key driver in their decision to what higher than other options in the out its challenges, and we asked least keeping their options open. respondents may not launch services until well after
many operators would just as soon kick move to LTE, which may be a reflec- survey primarily because it’s the more respondents to name their top Either way, it’s worth pointing out LTE smartphones hit the street is admittedly also a
off LTE with full coverage rather than tion of the fact that while P2P traffic mature technology in the offload solu- challenges with LTE rollout plans. that only 8% of respondents said factor here). If nothing else, it belies the importance
islands of LTE. Device availability made the top they had no plans for LTE voice that operators place on smartphones as a key part of
That said, all respondents did list a of the list (see sidebar, this page). support. their LTE offerings going forward.
fallback option for non-LTE coverage –
mainly HSPA+ or HSPA, according to
What devices are you offering/plan to offer The other top challenge cited was
spectrum. Indeed, spectrum re-
We also asked about plans for
TD-LTE, which is gaining a lot of
The same appears less true of tablets and CPE-
type devices like Mi-Fi routers, which ranked lower in
survey results. However, it’s worth men- during the first year of commercial launch? Figure 4 mains an issue on several fronts, traction as a supplemental tech- the survey. That said, the relatively low response for
tioning too that LTE is an overlay tech- from availability and the quest for nology to FDD-LTE. Although the tablets is arguably a reflection of market realities, as
nology, which means no one’s going to coveted digital dividend spectrum technology is still a little behind there aren’t any LTE-ready tablets on the market now,
be switching off their 3.5G networks at lower frequencies to fragmen- the development curve compared and only a few (from Motorola, Samsung, RIM and
anytime soon. They’ll serve as a data of- tation and harmonization issues to its FDD cousin, only 27% of Cisco Systems) are expected to be available before
fload option for users who don’t need that will come into play as de- respondents said TD-LTE wasn’t the end of this year.
LTE-level speeds to, say, check email mand for LTE roaming becomes important to their overall LTE It’s also worth noting that according to the GSM
and update their Facebook status. So important. plans. Whether that’s due to actual Suppliers Association (GSA), of the 161 LTE devices
fallback connectivity doesn’t necessarily For the moment, roaming is disinterest or external factors like “announced” as of the end of July 2011, just eight
conflict with stated plans for 100% LTE a relatively minor issue for op- regulatory issues and spectrum are tablets. Interestingly, 63 of them are routers – the
coverage. erators – just 15% of respondents availability is an open question for biggest category – with dongles the second largest at
cited it as a challenge. Bigger prob- now, but the fact that TD-LTE is 41 announced devices. So either LTE routers are much
Speaking of offload … lems on the table included regula- on the table for most operators at further down the service pipeline, or most operators
We asked operators to tell us the tory constraints (arguably related the moment is a breakthrough in in Asia don’t see much demand for them yet. TA
top traffic drivers pushing them toward source: Telecom Asia & Maravedis to the spectrum issue, though not itself for TDD technology. TA – John C. tanner
20 Aug/Sept 2011 Telecom Asia www.telecomasia.net www.telecomasia.net Telecom Asia Aug/Sept 2011 21