Deploying LTE in Europe

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Contents About the author............................................................................................................... 3 Introduction....................................................................................................................... 4

Market overview...........................................................................................................................................4



LTE in Europe...............................................................................................................................................4

Deploying LTE in Europe................................................................................................... 5 MS-BTS.........................................................................................................................................................6 Overlay..........................................................................................................................................................6

LTE deployment drivers in Europe................................................................................... 7 Conclusion......................................................................................................................... 9 Appendix............................................................................................................................ 9

Industry survey.............................................................................................................................................9

MS-BTS deployments................................................................................................................................................. 9 LTE overlay...............................................................................................................................................................10



Network-economics modeling................................................................................................................... 10

© Informa UK Limited 2012. All rights reserved. The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trade marks, service marks or trading names of their respective owners, including Informa UK Limited. This publication may not be:(a) copied or reproduced; or (b) lent, resold, hired out or otherwise circulated in any way or form without the prior permission of Informa UK Limited. Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Limited nor any person engaged or employed by Informa UK Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Limited.

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

3

About the author

Principal Analyst , Dimitris Mavrakis Area of expertise: IMS, mobile access network technologies, femtocells, backhaul, network APIs. “As LTE is being deployed throughout the world, mobile operators are finding it hard to strike balance between network investments, new pricing schemes and increasing traffic. Several initiatives are being deployed, including capacity upgrades, optimization, offload and policies to tackle all of these challenges.” Dimitris Mavrakis is a principal analyst with Informa Telecoms & Media. He is part of the Networks team where he covers a range of topics including Next Generation Networks, IMS, LTE, WiMAX, OFDM, core networks, network APIs and identifying emerging strategies for the mobile business. Dimitris is also actively involved in Informa’s consulting business and has led several projects on behalf of Tier-1 operators and key vendors. Dimitris has over 12 years experience in the telecommunications market. He has a strong background in mobile and fixed networks and an in depth understanding of market dynamics in the telecoms business. In the past, Dimitris has worked as a project leader to perform challenging network measurements and has lead a team of researchers to produce pioneering research and acclaimed publications. Dimitris has been working for Informa since 2005. In the past, Dimitris has worked as a project leader to perform mobile network field tests and has lead a team of researchers to produce pioneering research and acclaimed publications during his academic career. Dimitris holds a PhD in Mobile Communications and a MSc in Satellite Communications from the University of Surrey.

Contributor Phillip Marshall, Tolaga Research Tolaga delivers actionable research for the mobile broadband industry. This research is anchored with extensive market, technology and regulatory databases that span 190 countries and its Market Explorer™ platform. The platform uses a systems based approach to technology and market modeling. Tolaga was established in 2009 and is headquartered in Massachusetts, USA. www.tolaga.com

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

4

Introduction Market overview

garnering success, and there is rising

availability of LTE smartphones are

demand for mobile data services and

helping the technology expand rapidly.

LTE has seen arguably the fastest

smartphones – all influences that

growth of any mobile network

promote the adoption of LTE. Initial

Europe’s mobile market has several

technology deployed so far. With

end-user feedback indicates that LTE

unique properties that make LTE

more than 74 networks live in more

services have been well received and

deployments in the region stand out.

than 30 counties, covering every

that the higher-speed, lower-latency

• Network sharing is widespread

populated continent, LTE is enjoying

network offers serious advantages

in the EU, and several operators

the most successful launch of

compared with previous networks.

now share parts of their network

any mobile technology in history,

in a passive or active mode. There

with the most swiftly deployed

are discussions in certain markets

networks. There is a proliferation

LTE in Europe

of LTE-enabled devices in attractive

about regulating network sharing, which would force operators to

form factors and at desirable price

Despite the success of LTE in many

share part or all of their networks.

points, and nearly all LTE handsets

Asian markets and the US, its

Although network sharing reduces

are smartphones, which provide

growth has been slower in Europe

costs, the strategy, governance and

operators with more opportunities

due to regulation, license-auction

integration involved often make it a

for profitability. According to

delays and the wide and dense

Informa Telecoms & Media’s LTE

deployment of HSPA networks.

forecasts, there were 62 million LTE

TeliaSonera’s LTE network in

bands in Europe appear to be

subscribers at end-December, and

Sweden was the world’s first to be

800 and 2600MHz and 1800MHz,

this number is expected to increase

turned on, in December 2009, but as

which seems to be considered a

to 133 million in just a year.

of June 2011 the country had fewer

key global LTE band. Operators

complex task. • LTE spectrum: The key LTE

than 10,000 subscriptions. This

generally prefer lower bands,

However, this kind of success does

slow growth was due largely to the

which have better propagation

not come without challenges: Ninety

fact that only portable LTE devices

characteristics, meaning that

percent of the LTE market is held by

(USB dongles and MiFi units) were

they can offer good coverage with

five operators, and certain regions

available, at higher pricing than 3G.

fewer cell sites. Some operators

are lagging due to reasons including

Nevertheless, TeliaSonera reports

have already been awarded

unclear regulation and spectrum-

that deploying LTE first was the

spectrum, some are waiting

license delays. Nevertheless, certain

“most brand value accretive action

for spectrum auctions before

operators are providing learning

we have taken,” and other LTE

they begin to deploy LTE, and

experiences for the whole market,

early adopters have made similar

some are attempting to refarm

the leaders being Verizon Wireless,

statements.

existing spectrum, such as the

AT&T and those in South Korea,

1800MHz band, which has been

where operators have already

The European market has its own

used for 2G/3G. Existing unpaired

deployed LTE to cover almost all of

peculiarities, as do most global

spectrum assets might also be

the population.

regions. Densely deployed HSPA

used for TD-LTE networks in the

networks, saturated markets, a

future. Unlike in regions that have

LTE has arrived at an appropriate

fragmented spectrum landscape

clearer conventions for spectrum

stage of the evolution of mobile

and the wide availability of fixed

use – such as the US, where LTE

operator business: Users are

networks have made the rollout of

is in the 700MHz band – Europe is

becoming more aware of the benefits

LTE throughout the region slower, but

fragmented, and some spectrum

of data services, OTT applications are

rises in the demand for data and the

auctions have yet to take place.

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

• 3G-network density: Countries in

mobile operators, since spectral

There have been several notable

Western Europe – and several in

and network efficiency is a key

LTE-network launches in Europe

Eastern Europe – are characterized

concern as the market becomes

(see fig. 1).

by dense HSPA deployments,

more data-centric.

which have provided adequate capacity for mobile subscribers.

Fig. 1: Notable European LTE-network launches

But deploying LTE has been

Operator (country)

considered a strategic objective,

TeliaSonera (Sweden)

Dec-09

USB dongles and MiFi only

and several operators have started

Vodafone (Germany)

Dec-10

Rural deployment first

Yota (Russia)

Dec-11

Wholesale network

2600MHz

EE (UK)

Oct-12

Only UK LTE network

1800MHz

deploying it without clear visibility of pricing models and business opportunities. As of 2013, LTE has become a major objective of all

Launch date

Details

Band 800/1800/2600MHz 800/2600MHz

Source: Informa Telecoms & Media

Deploying LTE in Europe Mobile operators have been skeptical

in parallel with modernization efforts,

have taken steps to optimize their

about the value proposition of

especially in cases where aging legacy

infrastructure before deploying LTE

LTE, especially due to the fact that

2G/3G networks were increasing

networks, mainly by consolidating

monetization of 3G came much later

total cost of ownership (TCO) and

existing 2G/3G infrastructure into

than expected and was challenged by

modernization offered an opportunity

a single platform, often referred to

license costs, low technology maturity

for cost savings. Fig. 2 illustrates a

as a Multi-Standard Base Station

and overall slow development of the

decision tree when deploying LTE and

(MS-BTS) platform. But MS-BTS

ecosystem. These factors have since

with different options operators could

platforms deployed for 2G/3G might

been addressed, however, and the

take advantage of to deploy LTE.

require considerable investment

LTE ecosystem is seeing healthy

to upgrade to LTE, which requires

growth across chipsets, devices and

A major factor inhibiting LTE

new antennas, Remote Radio Units

network infrastructure, alleviating

deployments in Europe – and other

(RRUs) and manual installations.

operator concerns.

areas, including Japan and South

Costs are even higher when using

Korea – is the presence of widely

4G spectrum that does not overlap

Apart from deployments that are

deployed legacy networks. With the

with 2G/3G frequencies. For

driven by regulation, LTE networks in

aim of reducing the cost of running

example, 2.6GHz LTE deployments

Europe have primarily been developed

legacy infrastructure, operators

often require new RRUs, antennas, baseband units, manual upgrades and, most likely, new cell sites to

Fig. 2: LTE-deployment options for legacy networks

LTE deployment

satisfy coverage requirements, boosting the deployment cost

Legacy 2G/3G network

MS-BTS for 2G/3G

Add LTE payload in MS-BTS Add LTE overlay

an MS-BTS deployment. This white paper discusses two

MS-BTS for 2G/3G/LTE Source: Informa Telecoms & Media

considerably despite the existence of

options for deploying LTE: Multi Standard Base Stations (MS-BTS) and LTE overlay, which refers to adding new equipment at cell sites

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

5

6

for LTE. An operator choosing to

simultaneously. Assuming that an

share RRUs between 2G, 3G and

deploy LTE with a legacy 2G/3G

MS-BTS is providing service for

LTE for the same frequencies

network has several possible paths

different technologies, the following

after refarming. In most cases,

to choose from.

elements are usually deployed:

new RRUs are necessary to

• Integrated baseband unit (BBU):

enable LTE in existing MS-BTS

Although overlay usually refers

The baseband unit is responsible

to specific additional equipment

for processing and converting

used to enable an air interface, the

digital signals. It is usually in the

antennas are band-specific and

infrastructure could be an MS-BTS

form of an upgradable platform,

need to be upgraded if LTE is

with specific functionality enabled,

where new cards (or “blades”)

deployed in new frequencies.

which can enable modernization of

can be introduced to cater for

the network in later stages while

increased utilization or new

satisfying the current need for a

protocols. Typical MS-BTS BBUs

quick LTE rollout.

may be made compatible with

In overlay deployments, new

LTE through software upgrades,

hardware is installed in existing

though in many cases a hardware

base stations without affecting

upgrade is necessary due to the

the existing infrastructure or

increased functionality required by

network operation. The operator

LTE eNodeBs.

is able to procure equipment from

MS-BTS MS-BTS platforms are deployed

deployments. • Antennas: Similar to RRUs,

Overlay

• Remote Radio Unit: The RRU

any vendor, not just the existing

operate in similar frequencies and

includes RF equipment and

MS-BTS provider. The following

at the same cell sites. For the most

converts digital signals to RF for

figure illustrates a brief comparison

part, vendors have accordingly

transmitting, and vice versa for

of MS-BTS and overlay deployments

chosen names for their technologies

receiving. RRUs are band-specific,

for European networks (see fig. 3).

that reflect the fact that a

meaning that new LTE frequencies

single base station can provide

need new radio units. But there

Both deployment strategies

service for different technologies

are some cases where networks

offer specific advantages and

when several networks have to

disadvantages, and the decision Fig. 3: Comparison of LTE-deployment strategies Bevnefits

Challenges

of which to use is affected by

LTE overlay

Single RAN

several parameters, including LTE

Speed of deployment

Lower site rental cost

spectrum, legacy-network age,

No network disruption

Lower power comsumption

whether a modernized network

Lower capex

Cell-site simplification

has been fully depreciated, vendor

Potentially higher opex

Requires existing network renewal (downtime and potential disruptions, additional optimization and training)

Multiple platforms to manage

Vendor lock-in

Source: Informa Telecoms & Media

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

relationships and many others. But the European market is now at a stage where an overlay is becoming a valid competitor to MS-BTS platforms for LTE deployment.

7

LTE deployment drivers in Europe Several operators have already

Fig. 4: What is the most important benefit of deploying an MS-BTS platform?

modernized their existing networks, 35

2G and 3G deployments. Many of

30

these modernizations have taken

25 20 15

12

0

5

a decommissioning fee, which can be substantial – especially if considering stand-alone (non-MS-BTS) platforms. In many cases, mobile

Other (please specify)

cannot be removed without suffering

alone platforms until they are fully

10

Hardware reuse for different air interfaces

5 Lower CAPEX and/or OPEX

might not be fully depreciated and

operators continue to operate stand-

12

10

Ability to support future spectrum refarming

As such, these modernized networks

30

Lower site costs (including power)

900MHz, 1800MHz and 2.1GHz bands.

31

Network simplification – one platform to manage

place over the last five years, in the

Response (%)

with a focus on reducing opex for

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

depreciated, after which they might be considered for replacement.

Fig. 5: Forecast cumulative gain in net present value of an LTE overlay relative to MS-BTS 800

reductions in capex and opex are the advantages most frequently cited by European operators for deploying LTE through an MS-BTS platform (see fig. 4). An overlay decouples modernization

NPV gain (US$ mi.)

Simplification of the network and

700 600 500 400 300 200 100 0

0

6

12

18

24

efforts from network deployment, which results in a faster and less disruptive network rollout and might also delay modernization. Operators

30

36

42

48

54

60

66

72

Simulation month Dominated by the negative impact of multi-standard RAN upgrade

Dominated by the positive impact of reduced power consumption, OA&M and ground lease costs for multi-standard RAN

with aggressive LTE deployments have reported that traffic over their

Source: Informa Telecoms & Media, Tolaga Research 2013

3G networks is declining in favor of LTE, which in turn reduces the

of TCO will come from upgrades,

in many cases lower than that of an

pressure to modernize. A simpler

which applies to both MS-BTS and

MS-BTS (see fig. 5).

network deployment is also a

overlay cases. Moreover, adding

major advantage in markets where

functionality to a platform that is

Another major operator concern

regulations and permissions for

already operating and providing

is vendor lock-in, which is a

work at cell sites are strict.

connectivity to subscribers might

considerable commitment with most

lead to unplanned downtime,

MS-BTS platforms. An operator

Although opex savings can be

which might be considered a risk.

becomes tied to the vendor’s strategy,

achieved by consolidating 2G/3G

According to Informa’s financial

including infrastructure upgrades,

and LTE base stations, the majority

modeling, the cost of an overlay is

which usually keep pace with market

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

developments but could fall short due

Network sharing is a major force

sharing pose a considerable

to changes in vendor strategy.

behind network deployments,

challenge for operators. In cases

and its importance is expected

where operators are already

Reliability of the network and vendor

to increase. Active sharing

participating in active-sharing

lock-in are among the top concerns

arrangements provide the most

arrangements, they need to jointly

related to MS-BTS deployments

economic benefits but require

decide to upgrade the platform to

cited by European operator

operators to be in similar market

new technologies, including LTE.

respondents to our industry survey

positions, e.g., using similar

In many cases, an overlay strategy

(see fig. 6). Another major concern

bandwidth and frequencies. Passive

is considered a more effective

linked to vendor lock-in is financial

sharing is expected to be more

option, enabling each operator to

stability, in cases where several

popular, because the integration,

meet its strategic objectives without

vendors are subject to hostile

governance and cultural and

having to wait for its active-sharing

market environments and their

strategic issues linked to active

partners to move in parallel.

future is not clear. Fig. 6: What is the most important challenge when deploying an MS-BTS platform?

The biggest advantage of a network overlay is speed of deployment. It is

35

usually much faster than deploying

30

an MS-BTS and replacing legacy

25

19

20 15

12

9

5

competitive advantage. A quick

0 Complete vendor lock-in

in many cases gives it a major deployment also gives operators extra time to consider the strategic impact of an LTE network, which is especially useful when considering

Other (please specify)

10

May require significant upgrades for additional air interface (e.g. new spectrum)

LTE services the soonest, which

27

Reliability issues

an overlay, the operator can offer

33

Downtime required for replacing existing network infrastructure

networks. By deploying LTE through

Response (%)

8

the value proposition of LTE in Europe’s volatile economic environment.

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

Conclusion Our research, modeling and survey

Europe are expected to follow

Other benefits of an overlay include

illustrate that LTE overlay is

similar steps and include overlay

not being locked in to a single

considered a viable alternative to

as an element of LTE-network

vendor, a lack of network disruption,

MS-BTS. Several operators across

deployments.

greater reliability and, in many cases,

the world, especially in the US,

a financial advantage over MS-BTS.

Japan and Korea, have deployed

Many of their counterparts in

LTE by overlaying on existing

Eastern Europe are expected to

Both deployment strategies

infrastructure and, in many

follow, given that LTE adoption

offer specific advantages and

cases, have enjoyed a competitive

in that region is slower than in

disadvantages, and the decision of

advantage by being first to market.

the more developed markets of

which to use is affected by several

Many operators in Western

Western Europe.

parameters.

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

9

Appendix Industry survey

operators and 43 hybrid operators,

This is somewhat expected, since

with both fixed and mobile assets.

operators in Western Europe expect

To gauge market perception of LTE

Asked if they had an LTE network

faster take-up of LTE services due

launch strategies and understand the

live or pending launch, a staggering

to higher demand for mobile data,

state of European networks, Informa

96.3% of European operators

and they rely on a faster deployment

has launched an industry survey that

answered in the affirmative, with

strategy. The results illustrate that

includes broader questions regarding

only 3.7% stating that they are not

developed markets are more likely to

LTE. Those that are relevant to this

planning to launch LTE. Method of

rely on overlay deployments for LTE.

study are presented here.

deployment was evenly split among

MS-BTS deployments

the three options (see fig. 7). The survey had 442 respondents,

Questions about MS-BTS platforms

of which 112 were operators

Western European operators were

revealed that cost savings and

based in Europe. Of these operator

biased toward overlay and those in

network simplification are the major

respondents, 68 were mobile

Eastern Europe toward MS-BTS.

incentives for operators to take such an approach. The ability to reuse hardware for future technologies

Fig. 7: What is the primary deployment mode for your LTE network? Only using small cells 1%

was cited by surprisingly few

Other (please specify) 4%

respondents, as was support for

Replacing a legacy 2G/3G network with a MS-BTS platform supporting LTE as well 31%

Overlaying LTE in an existing network deployment 32%

future refarming efforts. Regarding the challenges of deploying LTE through a MS-BTS platform, the most operators cited vendor lock-in and network

Adding LTE in an existing MS-BTS deployment 32%

downtime. Future upgrades scored only 12%. The responses about MS-BTS deployments imply that even

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

though the technology is usually positioned by vendors as futureproof, meaning it offers cost savings

Fig. 8: What is the biggest benefit of deploying LTE through an overlay? 35 30

not take that into account. And 23

25

they do not appear to consider the 19

20

additional costs of introducing new 15

15

air interfaces a major challenge for 10

10

MS-BTS, indicating that they are

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

Other (please specify)

consolidate legacy networks rather Legacy network is tried and tested

0

Lower CAPEX compared to Single RAN

deploying these base stations only to Higher network reliability

5 No 2G/3G service interruption

Response (%)

on future hardware, operators do

32

than to cater for future technologies.

LTE overlay Respondents cited service interruption and network reliability as the main benefits of an LTE overlay (see fig. 8).

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Other answers included the ability to

When asked for the most important

due to specific market and operator

deploy LTE at any time rather than in

technical aspect of an LTE network,

conditions, overlay appears to be

parallel with a modernization effort

an overwhelming 60% chose cell

a viable deployment method for

coupled with MS-BTS.

throughput, and when asked which

LTE despite the trend for network

future capability of the technology is

modernization and platform

The need to manage multiple

the most important, 36.8% answered

consolidation.

platforms and interoperability

LTE-Advanced, followed by VoLTE,

problems with the existing core

with 30.3%.

network were the most frequently

Network-economics modeling

cited challenges when deploying

The survey results chime with the

an overlay (see fig. 9), with a rise

analysis findings presented above

in opex and the need for multiple

and reflect the market state in

A simulation model was developed

vendor relationships cited by fewer

Europe. Although each deployment

to compare the economics

respondents.

must be considered independently,

of MS-BTS and overlaid LTE architectures, based on a real operator in a leading European

Fig. 8: What is the biggest benefit of deploying LTE through an overlay?

market and using the following 35

• At the time of the LTE

23

25

implementation, the 2G/3G

19

20

radio equipment had already

15

15

10

10

been modernized and operated multicarrier RF equipment.

Other (please specify)

Legacy network is tried and tested

2013 and assumed that an LTE

Lower CAPEX compared to Single RAN

• The simulation started in January

0

Higher network reliability

5 No 2G/3G service interruption

Response (%)

general assumptions:

32

30

overlay had commenced six months earlier. The simulation covers a six-year period. • The network consists of 2G GSM/EDGE, 3G UMTS/HSPA and 4G/LTE. The 2G GSM/EDGE

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

network uses 24.8MHz of 900MHz and 10MHz of 1800MHz radio

Fig. 9: What is the biggest challenge when deploying LTE through an overlay? 30

spectrum. UMTS/HSPA operates in the 2.1GHz 3G band with 20MHz

30

bandwidth. LTE operates in the

24

25 Response (%)

800MHz band with 20MHz, the

19

20

1800MHz band with 30MHz and 15

15

12

10

the 2600MHz band with 40MHz. The LTE network is deployed initially to maximize coverage and

5

expanded into higher frequency

Note: Responses from survey of 112 European operators. Source: Informa Telecoms & Media

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Other (please specify)

Legacy network is tried and tested

Lower CAPEX compared to Single RAN

Higher network reliability

0 No 2G/3G service interruption

10

bands according to capacity demands. • Mobile traffic is estimated on a per-device basis for nonsmartphones and smartphones, and connected tablet, laptop and e-reader devices. A general category is used to estimate

11

Fig. 10: Forecast subscriber and network traffic over six years Downlink network bandwidth HSPA(+)

Downlink network bandwidth UMTS

Downlink network bandwidth GSM/EDGE

600

1800

500

1500

400

1200

300

900

200

600

100

300

0

0

6

12

18

24

30

36

42

48

56

60

66

Average data traffic per user (Mbps/mo.)

Downlink network bandwidth (Gbits/second)

Downlink network bandwidth LTE

0

72

Simulation month Source: Informa Telecoms & Media, Tolaga Research 2013

the average traffic generated

Fig. 11: Forecast base-station requirements over six years

by M2M devices. Data and voice 35

the differing population densities

30

area. Bandwidth usage caps are assumed across the forecast period and form the basis for determining the upper limits of per-device traffic. Network

Total base stations (000S)

lognormal distribution to reflect across the network-coverage

UMTS/HSPA

GSM/EDGE

traffic is skewed using a modified

LTE

25 20 15 10 5 0

0

6

12

18

24

dimensioning is based on peak traffic demands. • An Okumura-Hata radio-

30

36

42

48

54

60

66

72

Simulation month Source: Informa Telecoms & Media, Tolaga Research 2013

propagation model is used to predict network coverage and

of 258MB a month to 1.5GB per

to be required after six months.

combined with a radio-capacity

month over the six years, covering

The demand for LTE base stations

model to predict the number of

both mobile devices and connected

increases throughout the forecast,

base stations needed and their

computing. Average voice-service

reaching 30,300 after six years.

associated output powers. Four

use per user is assumed to remain

categories of base stations are

constant at 130 minutes a month.

used, including high-power,

The network-deployment scenario studied in this report reflects

medium-power and low-power

The forecast traffic was applied

that of many mobile operators, by

macrocells and microcells. Each

to a network model to predict

incorporating three radio-technology

base-station category is defined

radio-base-station requirements

generations – GSM/EDGE, UMTS/

in terms of antenna height, output

(see fig. 11). Two scenarios where

HSPA and LTE – spanning five

power, receiver sensitivity and

analyzed, one in which GSM/EDGE

frequency bands. Because the

average number of sectors. Small-

base stations were decommissioned

majority of network costs are due

cell and Wi-Fi offload is used to

after three years and on in which

to radio-base-station operations,

moderate large-cell demand.

the GSM/EDGE cell sites remain in

mobile operators are eager to

place. Data traffic is assumed to be

optimize their radio-infrastructure

Fig. 10 shows forecast subscriber

aggressively migrated to LTE over

costs. Many operators have replaced

usage and downlink data traffic on

the first 8-12 months of the forecast.

obsolete infrastructure and are

the network. Data traffic per user is

As a result, no additional UMTS/

carefully evaluating LTE-deployment

forecast to increase from an average

HSPA(+) base stations are assumed

strategies.

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

12

The financial impact of an LTE

implementation. At its peak,

ground leases by 7%. The gains

overlay is compared with an

the cumulative NPV benefit for

begin to be reflected after 19

equivalent MS-BTS implementation

LTE overlay is forecast to reach

months.

using a marginal discounted-

US$601 million.

cash-flow analysis, to forecast the

• As the MS-BTS is implemented,

The results indicate that for a

cumulative benefit in net present

it offers cost savings through

modernized 2G/3G network, an

value (NPV) of an LTE overlay

reductions in power consumption;

MS-BTS implementation does not

relative to a MS-BTS deployment.

lower operations, administration

achieve a positive return relative to

The results demonstrate the

and maintenance costs; and

an LTE overlay architecture even

following:

slightly reduced site-lease

after seven years, and they illustrate

• For the first 19 months of

costs. The MS-BTS base stations

that mobile operators must carefully

the simulation, the MS-BTS

are assumed to use up to 50%

evaluate the total cost of ownership

architecture is more costly

less power, incur 60% lower

for alternative network architectures

because it requires 2G and 3G

operations and maintenance

before pursuing LTE-network

upgrades in addition to LTE

costs and bring down the cost of

upgrades.

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