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LTE 2013 Markets & Trends Facts & Figures

 LTE Watch

IDATE creates the DigiWorld Institute Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of close to 40 member companies – which include many of the digital economy’s most influential players – the newly rebranded DigiWorld Institute has entered into a new stage of its development, structured around three main areas of activity:  IDATE Research, an independent observatory whose task is to keep a close and continual watch on digital world industries, collect relevant data and provide benchmark analyses on market developments and innovations in the telecom, Internet and media sectors – through its comprehensive collection of market reports and market watch services.  IDATE Consulting, time-tested analysis and consultancy solutions: Our multi-disciplinary teams of economists and engineers established their credibility and independence through the hundreds of research and consulting assignments they perform every year on behalf of top industry players and public authorities.  DigiWorld Institute, a European forum open on the world: The DigiWorld Institute will take existing IDATE initiatives, such as the DigiWorld Summit, the DigiWorld Yearbook and the monthly clubs in Paris, London and Brussels, to the next level. Members have the opportunity to participate in think tanks on the core issues that will shape the industry’s future, drawing on the knowledge of outside experts and our own teams.

Contributor Frederic PUJOL, Head of the radio technologies & spectrum practice Frédéric Pujol joined IDATE in November 1992. As head of radio technologies and spectrum Practice, he is responsible for coordinating mobile industry forecasting and technical-economic analysis reports. Previously, Frédéric acquired solid experience in mobile network architecture working for the France Telecom Group (Sofrecom, Telesystems). Mr. Pujol holds a post-graduate degree in engineering from ISEN (Institut Supérieur d'Electronique du Nord, Lille, 1986), where he majored in Telecommunications, and from CITCOM (Centre d'Ingénierie des Technologies de la Communication, Paris, 1987), where he majored in Network Architecture. [email protected]

Copyright IDATE 2013, CS 94167, 34092 Montpellier Cedex 5, France All rights reserved. None of the contents of this publication may be reproduced, stored in a retrieval system or transmitted in any form, including electronically, without the prior written permission of IDATE. IDATE, DigiWorld, DigiWorld Institute and DigiWorld Yearbook are the international registered trademarks of IDATE.

White Paper LTE 2013

Contents 1.

2.

3.

4.

5.

LTE worldwide market ...................................................................................... 5 1.1.

LTE subscriber figures ........................................................................................... 5

1.2.

LTE in the Americas ............................................................................................... 6

1.3.

LTE in Asia-Pacific ................................................................................................. 9

1.4.

LTE in Middle East ............................................................................................... 12

1.5.

LTE in Europe ...................................................................................................... 13

LTE telcos' strategies ..................................................................................... 17 2.1.

Lessons from LTE commercial deployments ....................................................... 18

2.2.

Conclusions on MNOs’ strategies ........................................................................ 19

Latest TD-LTE developments......................................................................... 20 3.1.

Status ................................................................................................................... 20

3.2.

Main TD-LTE operators ........................................................................................ 21

LTE pricing ...................................................................................................... 29 4.1.

North America ...................................................................................................... 29

4.2.

Asia....................................................................................................................... 33

4.3.

Europe .................................................................................................................. 37

4.4.

Comparison .......................................................................................................... 40

Next Gen Mobile devices ................................................................................ 42

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White Paper LTE 2013

LTE 2013 LTE is gaining momentum: The Digiworld Institute by IDATE predicts that, by 2017, there will be a total of 916 million LTE subscriptionswill. We expect that, by the end of 2013, a significant portion of LTE devices will support both FDD and TDD duplex modes. TD-LTE deployments in India, China and many other countries in the Asia-Pacific, Latin American, and Middle East regions and, to a lesser extent, Europe will fuel this growth. We anticipate that more than 80% of LTE devices will also support 3G and, in most cases, 2G in 2014. A limited number of LTE devices will support Mobile WiMAX in order to facilitate smooth transition for operators switching to TD-LTE. Against a backdrop of pioneer rollouts and recent announcements, several questions emerge on the topic of LTE:  How do commercial LTE networks perform in the “real world”?  What are the LTE commercial deployments scheduled by Tier1 operators?  Could LTE accelerate the consolidation of the mobile market?  What is the cost of deploying LTE?  Which type of operator benefits the most?  Will LTE accelerate changes in pricing plans for mobile data?  What are the regulatory constraints for LTE deployment?  How many and what type of LTE devices will be rolled out this year? * Forecast – December 2012

In this new edition of our LTE yearbook, you will find valuable data on the central components of the LTE world, along with analyses from our experts and a comprehensive round-up of the highlights of the year gone by: 

LTE worldwide market



LTE telcos' strategies



Latest TD-LTE developments



LTE pricing



Next Gen Mobile devices

LTE Watch Service These are just a few of the conclusions drawn from the ongoing monitoring of the globe’s LTE markets by IDATE’s LTE Watch Service:  Database: a unique, continually updated LTE market database, providing market data by Operators (+90 analysed), by country (40 covered) and by technology, along with forecasts for the coming months and up to 2017.  Insights: Monthly views on key issues  Analyst Access: consulting hours, analyst briefs, presentations More information about this LTE Watch Service at the end of the report Contact: Frédéric PUJOL, Radio Technologies & Spectrum Practice Manager email: [email protected] – Tel: +33 6 82 80 46 20 For more details, visit: www.idate.org

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1.

LTE worldwide market

1.1.

LTE subscriber figures At the end of 2011, there were approximately nine million LTE subscribers worldwide, according to our database. Figures for Q2 2012 are the following: Table 1:

LTE commercial networks and subscriptions in Q2 2012

Q2 2012 85 commercial LTE networks incl. nine TD-LTE networks

24 million LTE subscriptions in the ‘Top 10’ countries

26.5 million LTE subscriptions worldwide

Source: IDATE

The exact figures which are publicly available from mobile operators are presented below: Table 2:

Q1 and Q2 2012 subscriptions figures for the ‘Top 10’ LTE networks

Country

Operator

USA

Verizon Wireless

8 000 000

10 900 000

Japan

NTT DOCOMO

2 225 000

4 000 000

South Korea

SK Telecom

1 700 000

3 750 000

South Korea

LG Uplus

1 300 000

2 576 000

South Korea

KT

351 000

1 170 000

USA

AT&T

265 000

750 000

USA

MetroPCS

580 000

700 000

Germany

Vodafone

130 000

160 000

Canada

Rogers Communications

120 000

na

Uzbekistan

MTS

Total ‘Top 10’

Subscribers Q1 2012

Subscribers Q2 2012

150 000

na

14 821 000

24 006 000

Source: IDATE

At end-June, more than 30% of LTE subscribers were located in South Korea, and more than 50% in the USA. Combined subscriptions in the USA, South Korea and Japan then represented 93% of the total of ‘Top 10’ countries. At end-2012, IDATE forecasts, there will be some 65 million LTE subscribers worldwide. Table 3:

Q2 2012 subscription figures for the ‘Top 10’ LTE countries

Country USA South Korea Japan Germany Canada Australia Sweden Austria Hong Kong UAE Total ‘Top 10’

Subscribers Q2 2012 13 000 000 7 500 000 3 400 000 300 000 400 000 400 000 300 000 180 000 180 000 100 000 25 760 000

Source: IDATE

Updated data available for the LTE Watch 2103 subscribers.

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1.2.

LTE in the Americas

1.2.1.

Latin America Spectrum allocation for LTE started in Latin America in 2011, with the first commercial LTE networks seeing the light of day by year-end. The rollouts have continued this year across the region. The digital dividend spectrum will be assigned during 2012, or later, in most Latin American countries. Various spectrum bands are planned for LTE including 2.6 GHz, 1800 MHz, AWS and PCS. Operators in Latin America have been holding many LTE trials and are generally asking national telecom regulators to release more spectrum to expand and upgrade their networks. The year 2012 is crucial for operators and for LTE development. The following paragraph describes spectrum allocation processes and first commercial LTE services in Latin America.

Argentina Originally, the telecommunications regulator planned to auction spectrum in late 2011 but delayed the process until February 2012. Five operators bid for additional mobile telephony spectrum - Claro, Personal, Nextel, local triple-play operator Supercanal and Multitrunk. The government expects to award spectrum in the 1.9 GHz band - either 30 MHz or 35 MHz depending on region - plus 7.5 MHz of spectrum in the 850 MHz band (and 30 MHz in 1.9 GHz band) for the capital Buenos Aires. The final results of the auction were first expected for June 2012 but were not announced. No new official date is known at present.

Brazil In the Brazilian auction in December 2011 the telecom regulator auctioned unallocated 800 MHz and 1800 MHz spectrum from previous tenders, raising 97.8 million EUR. SKY, the largest cable and satellite TV operator in Brazil, has launched wireless broadband services using TD-LTE. It is the TD-LTE network and subscriber devices which provide fixed wireless broadband in Brazil. This illustrates the potential of LTE technology there, given that it is not only successful in the mobile field but already a strong competitor to other fixed broadband solutions. The availability of TD-LTE routers is good news even though its promising deployment has been somewhat muted thus far. Anatel launched a public consultation for spectrum in the 450 MHz and 2.5 GHz bands in January 2012. The auction was held in June. Anatel has imposed strict coverage conditions on winning bidders in those cities hosting the soccer Confederations Cup in 2013. The Brazilian government raised 2.72 billion BRL (1.05 billion EUR) from the spectrum auction in 450 MHz and 2.5 GHz bands. Telefonica Brazil (Vivo) was the largest bidder, offering a total of 1.05 billion BRL (404 million EUR) for 20 MHz of national spectrum. The American Movil Claro unit bid 844.5 million BRL (325.22 million EUR) for a similar 20 MHz allocation. TIM Brazil offered 375 million BRL (~144 million EUR) for a 10 MHz block of nationwide spectrum and for regional licenses and OiSA paid 345 million BRL (~133 million EUR) for its 10 MHz block, which also includes regional licenses. As a winner of the more lucrative 2.5 GHz spectrum, Claro will also have to deploy 450 MHz band services in rural areas of all states in the northern region, in rural parts of Bahia and Maranhao states and in greater Sao Paolo. The Brazilian regulator is planning to launch the next spectrum auction including licenses covering the 3.5 GHz band in order to attract small companies. The LTE auction will include 53 lots in the U band (35 MHz of TDD spectrum) and 34 lots of the P band (10 MHz of FDD spectrum).

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Chile At the end of 2011, Subtel, the NRA, announced an auction for 2.6 GHz spectrum. When it took place in July 2012, it raised 12 million USD. Entel acquired one block of 20 MHz spectrum for 8.9 million USD, the American company Movil Claro acquired one block for 2.9 million USD and Telefonica Movistar acquired one block for 500,000 USD. The winning bidders will have 12 months to start rolling out their new networks using the spectrum, and must connect an additional 543 “isolated communities” within two years. Subtel is considering auctioning the 700 MHz band for LTE parcelling out three 20 MHz blocks of frequencies.

Colombia The Ministry of ICT has invited expressions of interest to participate in an auction for spectrum in 1700 MHz, 1900 MHz and 2.6 GHz. The Government’s planned 4G spectrum auction, previously slated for June this year, was expected to take place on 5 September, with the government hoping to auction between four and six new licenses. The operator UNE-EPM announced a technical launch in December 2011, when its first base stations were activated. It has deployed technology in the 2.6 GHz band in the capital Bogota and five other cities, launching commercial service over its LTE network in June. At present, mobile broadband service is available to 80% of people in Bogota and Medellin, and will expand to Cali, Barranquilla, Cartagena and Bucaramanga before the end of the year.

1.2.2.

Canada Rogers Wireless Rogers Wireless led the introduction of LTE in Canada when, on 7 July 2011, it announced its launch of commercial LTE service in Ottawa using AWS bands. Its original plans – to cover more than 30% of the population by end-2011 – were quickly extended to the largest Canadian cities. Now Rogers plans to cover almost 60% of the Canadian population in 2012. It launched eleven LTE devices, including two tablets and six smartphones. Fido, the budget brand subsidiary of Rogers has launched LTE plans in July 2012.

Bell Mobility Two months after the Rogers launch, Bell Mobility unveiled its LTE service in the PCS band in Toronto and four other cities. The operator is currently focused on LTE rollout in urban areas, offering nine LTE devices including two tablets and four smartphones. For data plans, Rogers and Bell have offered very similar plans with the same data allowances and prices.

Telus Telus, the third largest cellphone provider, launched its LTE service in February 2012 in 14 metropolitan areas. It plans to reach more than 25 million Canadians by the end of 2012. Other operators are deploying or testing LTE technology, with MTS Allstream aiming for a launch in 2012 and the rest for 2013.

1.2.3.

USA Metro PCS The regional carrier was the first US operator to launch LTE in September 2010 in Las Vegas, using AWS spectrum bands. It currently offers LTE in nearly 90 percent of its network with five LTE smartphones and is looking to offer six to seven new LTE handsets by yearend. Metro PCS provides data plans from 40 USD to 70 USD per month. It introduced VoLTE in August 2012.

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Verizon Wireless Verizon Wireless launched its LTE service in some 30 cities in December 2010 using the 700 MHz band. Its LTE expansion in 2011 went somewhat faster than announced and, by the end of 2011, the Verizon LTE network covered 200 million people in 190 markets. By July 2012, the Verizon LTE network covered 230 million POPs in 337 markets across the country, or nearly 75 percent of the population. Regarding spectrum, Verizon signed agreements in 2011 to buy or exchange spectrum with other companies. With U.S. Cellular, it has exchanged some of its 700 MHz spectrum licenses for certain 1900 MHz PCS licenses, and has also agreed on a significant exchange of spectrum with Cricket provider Leap Wireless. Verizon is also buying the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. This AWS spectrum will bring them extra capacity in dense areas. As reported in Chapter 1, FCC approved the deal in August. The multitude of LTE devices offered by Verizon Wireless includes 13 smartphones, three tablets, two netbooks, two hotspots and three USB modems. In June 2012, it introduced its new ‘Share Everything’ rate plans with monthly fees for device usage. Smartphones cost 40 USD each, basic feature phones 30 USD; USB modems, Jetpack mobile hotspots and netbooks 20 USD; and tablets 10 USD. The plan also features data volumes (which can be shared between devices), from 300 MB for a monthly fee of 40 USD to 20 GB for 150 USD. Verizon will finally launch its national VoLTE service early in 2013. The company is working with numerous partners in its ‘LTE in Rural America’ (LRA) programme to build and operate an LTE network covering 2.6 million people in rural communities. Two participating rural wireless operators have now launched a LTE service.

AT&T AT&T launched its LTE commercial service in September 2011 in Atlanta, Chicago, DallasFort Worth, Houston and San Antonio, using 700 MHz band. The AT&T LTE network is now implemented in 52 markets; it plans to cover 150 million POPs by end-2011. In December 2011, the company withdrew its months-old bid to acquire T-Mobile USA from Deutsche Telekom for 39 billion USD. This failure will seriously jeopardise its LTE capacity in the years ahead. The carrier is reviewing its options but, all the while, it is losing time and falling behind Verizon Wireless which has finalised very significant spectrum acquisitions in the AWS band. In January 2012, AT&T completed its acquisition of the 700 MHz licenses of Qualcomm, covering more than 300 million PoPs. AT&T hopes to buy two Lower 700 MHz Band C Block licenses from 700 MHz L.L.C., associated with the Northeast Missouri Rural Telephone Company. The FCC must approve. AT&T has launched 13 LTE smartphones, four tablets and two USB modems. Its shared data package, unveiled in July 2012, allows new AT&T customers to either opt for it or current plans. Current customers can switch to the new plan without extending their contract. AT&T plans to deploy VoLTE on its forthcoming LTE network by the year 2013. The data range extends from 1 GB for a monthly fee of USD 40 to 20 GB for 200 USD a month.

Leap Wireless The Leap Wireless subsidiary, Cricket, launched its first commercial LTE market using AWS spectrum in December 2011 in Tucson, Arizona, and further expansion was planned for the nearby Arizonan border town of Nogales during 2012. The launch marks the beginning of planned, multi-year transition by Leap of its existing high-quality 3G network to 4G LTE. Cricket Communications have signed a five-year deal with Clearwire to leverage their network for the upcoming Cricket 4G LTE network. At present, there are two LTE data plans, priced at 50 USD and 60 USD with up to 5 GB of data per month and a LTE modem. Leap Wireless plans to expand its LTE network coverage from 20 to 25 million people population by the end of this year to some 60 to 65 million by end-2013 or early in 2014.

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Sprint Sprint launched its LTE FDD service in July in existing 1900 MHz spectrum in five cities: Atlanta, Dallas, Houston, Kansas City and San Antonio. It will shut down its iDEN service as early as June 30 2013, as it wants to migrate users to ‘Sprint Direct Connect’, a network operating on its 3G CDMA. This is in order to launch a unified network based on CDMA which will feature 4G LTE in conjunction with its Clearwire partner. The operator plans to complete building out its LTE network by end-2013, covering 250 million people by that time. Currently, Sprint has three LTE smartphones and the Sierra Wireless Tri-Fi hotspot on offer. It is maintaining its unlimited data plans for smartphones on its LTE network, and its Everything Data plan starts at 89.99 USD per month for smartphone users.

Clearwire Clearwire is keen to deploy a TD-LTE network in the 2.6 GHz band (2496 – 2690 MHz in the USA) incorporating key features of LTE-Advanced. An agreement reached in December 2011 with Sprint Nextel ensures adequate funding for its transition from WiMAX to TD-LTE.

Other operators Many other operators are deploying LTE networks in the USA, all intent on commercial service launch: Peoples Telephone Co-op (February); US Cellular and Panhandle (PTCI) in March; Cellcom and Pioneer Cellular in April; BendBroadband (May); and BayRICS, Bluegrass Cellular, C Spire Wireless, CenturyTel, Mosaic Telecom and United Wireless. LightSquared had planned to deploy the first US wholesale-only LTE network, mainly in Lband, but the FCC ruled that the proposed operating frequency interfered with GPS and aircraft flight safety systems. In 2011, it had signed a raft of wholesale deals with many partners. Its 15-year agreement with Sprint Nextel, finalised in July, was scuppered by the interference question. In May, LightSquared filed for bankruptcy to try to continue operations.

1.3.

LTE in Asia-Pacific

1.3.1.

China The Chinese market has a significant role to play in the deployment of LTE. In terms of 3G, the Government announced its approval for issuing licenses on the very last day of 2008. Although the rollout has only just got underway, it does not mean a delay in deployment.. China Mobile has entered a second phase of trials including setting up trial networks in three new cities, planning for 20,000 LTE TDD base sites to cover 500 million people by end-2012. China Mobile are collaborating with Clearwire to speed up the development of TD-LTE devices (2.3 and 2.6 GHz) with common test specifications. It is working with several infrastructure devices and chipset vendors; commercial service is anticipated in 2013-2014. In September, China Mobile indicated the government may issue LTE licenses end-2013.

1.3.2.

Hong Kong CSL launched its commercial LTE service for corporates in November 2010. In May 2011, it made it available to existing subscribers to its 1010 brand. By August 2011, finally, LTE became available for its ‘one2free’ brand as well as for newcomers to its 1010 brand. It withdrew its 3G packages from the market and now only offers LTE for new sign-ups. CSL has used the 1800 MHz and 2600 MHz frequency bands to build its LTE network. PCCW launched its LTE network in April 2012, offering two LTE plans with three smartphones and the Samsung Galaxy Tab LTE. Hutchison 3 Hong Kong launched its commercial LTE FDD service in May 2012. It will build a combined FDD and TDD network, using its newly-acquired TDD spectrum. China Mobile Hong Kong launched commercial LTE FDD services in 2.6 GHz in April 2012 and is evolving its network to also support LTE TDD this year.

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1.3.3.

India The Broadband Wireless Access (BWA) auctions closed on June 2010 with two winners, Infotel Broadband Services and Qualcomm. Infotel was acquired after the BWA auction by the Indian conglomerate Reliance Industries (RIL) which is planning to become an important mobile broadband player. Its plans were to offer 4G broadband services by 2012. At the beginning of 2012, the Supreme Court decided to cancel the 122 licenses for 2G spectrum. After this decision, Etisalat confirmed its exit from the Indian mobile market and Telenor set out to refocus its Indian operation in order to move it towards self-sufficiency. A consultation paper was released for the 2G/GSM band auction in 22 service areas in March 2012. Bharti Airtel commercially launched India’s first LTE service (TDD) in Kolkata using ZTE equipment with launches to follow soon after in the States of Maharashtra, Punjab and Karnataka. It has selected Huawei to deploy and manage in Karnataka. Currently its LTE service is only available in Kolkata and Bengaluru with data plans ranging from 6 GB at 18 USD per month to 30 GB at 55 USD per month. Bharti and Qualcomm have inked a deal to transfer the Qualcomm 4G TD-LTE Indian licenses to Bharti. It will initially pay 165 million USD to acquire a 49% stake.

1.3.4.

Australia The regulator, ACMA, has encouraged mobile providers to privately negotiate in order to clean up the 1800 MHz spectrum band for 4G. All three mobile operators have confirmed they are deploying LTE networks using 1800 MHz spectrum. The 700 MHz spectrum will be sold in nine 10 MHz blocks and will cover the entire country, while the 2.5 GHz spectrum will be sold in 14 lots broken into 11 regional blocks. In April 2012, ACMA issued draft guidelines as it prepared to allocate spectrum. Stakeholders had until May 2012 to submit their responses. The draft rules consists of two parts—the allocation instruments and the technical instruments. Telstra launched its 4G LTE mobile network in September 2011 to consumers in all eight state capitals and 30 regional centres across Australia. Telstra currently provides LTE services in more than 100 regional and metropolitan centres. It offers four plans ranging from 1 GB at 63 USD to 3 GB at 135 USD. It offers three LTE USB modems, a tablet and four LTE smartphones. Optus has acquired local WiMAX operator Vividwireless for 230 million AUD (246 million USD) in order to build out a metropolitan 4G network based on TD-LTE technology in the 2.3 GHz band. It has launched an LTE 1800 trial network by offering free service and devices to select customers, with coverage available in Greater Newcastle, Maitland, Port Stephens and areas in the Hunter Valley. In May 2012, Optus and Vodafone announced a major site-sharing roaming deal to provide improved 3G and 4G coverage for consumers in the country. The alliance is subject to approval by the Australian Competition and Consumer Commission.

1.3.5.

Japan NTT DOCOMO launched the first commercial LTE service in Japan in December 2010 using 2.1 GHz spectrum under the ’Xi’ brand in the Tokyo, Nagoya and Osaka areas. It aims to reach 30 million Xi subscriptions by FY2015. The operator is now focusing on service innovation and convergence of industries/services while expanding the capacity and coverage of its ultra-high-speed LTE mobile service. It offers several flat-rate data billing plans. It has now achieved 100% population coverage of Ordinance-designated cities nationwide as well as Special Wards (Tokyo and 23 municipalities). It has planned to cover 70% of the population by the end of March 2013.

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In May 2012, it has unveiled its summer device line-up with a total of 19 new devices; in June, it has reached three million LTE subscribers. KDDI plans to launch its LTE in December 2012. It envisions a '3M' strategy (multiple networks, devices and usage) with plans to offload data from mobile networks to its other networks. Softbank, a member of the Global TD-LTE Initiative, launched its LTE network in February 2012 and intends to launch FDD-LTE network built by Nokia Siemens Networks and Ericsson using the recently allocated 900 MHz frequency band. In mid-2012, the operator had 7,000 TD-LTE base stations and expects to build out 3,000 more by the end of the year. E-Mobile has launched its LTE commercial service in the 1700 MHz band in March 2012 and expects to cover all major cities by year-end.

1.3.6.

South Korea SK Telecom inaugurated its LTE network using the 800 MHz frequency band in Seoul in July 2011. By April 2012 it had fulfilled its plan for nationwide LTE service, only nine months after launching the technology. The company is now set beat its target of six million LTE subscribers by end-2012, having signed-up 4.2 million customers by April. In July 2012, it commercially launched the MC network in Gangnam area of Seoul, with plans to cover the entire Seoul area and core areas of six other metropolitan cities within 2012. Recently, SK Telecom announced the launch of the world's first nationwide VoLTE service with the HD voice-compatible Galaxy S3 LTE. It is offering the service for the same rate (1.8 KRW per second, approximately 0.2 USD cents) as its 3G voice service and pay-per-second billing scheme. It has 13 different types of LTE devices – two types of LTE modem, nine models of LTE smartphones and two tablets. Further, it offers six types of packages with varying prices depending on the device, the amount of data, voice and messages. The LG U+ commercial LTE service was launched with 500 base stations in July 2011 in Seoul and two other cities. The operator completed nationwide LTE rollout at the same period as SK Telecom. LG Uplus has also launched commercialised VoLTE services using the Galaxy S3 and Optimus LTE 2 smartphones and plans to unveil at least seven models this year that enable the service. It has eleven LTE smartphones, a hotspot, a USB stick and four tablets. LG U+ offers several types of LTE plans: 'LTE integrated plan', 'LTE for young', 'LTE for senior', ‘LTE fun plan', 'LTE tablets plan' and 'LTE data only plan'. KT launched its LTE service in Seoul in January 2012 using the 1800 MHz band and has stated that it is aiming at four million LTE subscribers in 2012. It has confirmed that its LTE service is available nationwide shortly after its rivals. It currently offers ten LTE smartphones with seven types of packages with different prices depending on the device, and volumes of data, messages and voice. KT will shortly introduce two new packages that will make it possible for subscribers to roll over unused data to the following month. The new tariffs went live at the start of September 2012. It has confirmed that it expects to launch commercial VoLTE services in October this year. South Korean LTE subscribers are one of the fastest-growing LTE user groups in the world. With local mobile carriers planning to ramp up subscriptions to 15 million by end-2012, Koreans will account for roughly one-third of the global total, according to IDATE forecasts.

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Figure 1:

LTE Uptake in Korea

Source: KCC

1.4.

LTE in Middle East

1.4.1.

Bahrain The regulatory body, TRA, is presently engaged in consultations on the allocation of 2.6 GHz spectrum for LTE commercial deployments. Plans to award licenses in the 2600 MHz band will take place either at the end of 2012 or in early 2013. It will award two paired 40 MHz blocks in the 2600 MHz range. The TRA is also planning to allocate technology-neutral licenses for the following spectrum: 2×40 MHz in the 2100 MHz band, 2×15 MHz in the 1800 MHz band, 5.6 MHz of paired spectrum at 900 MHz and 15 MHz of unpaired frequencies in the 1900 MHz range. A further 2×30 MHz of 2600 MHz spectrum is earmarked for auction by the end of 2014. The 3G players are asking the Bahraini regulator to accelerate the process of license allocation. Viva, a unit of the Saudi Telecom Company (STC), unveiled an LTE hand ‘experience’ in the city centre of Bahrain in January 2012 and plans to make LTE services available in selected areas later this year. Batelco and Zain are conducting LTE trials and have both held demonstrations of the technology.

1.4.2.

UAE The regulator TRA plans to release 790 ‒ 862 MHz by the end of 2012 and has also indicated to operators that 2.6 GHz spectrum is available for LTE. Etisalat soft launched its LTE commercial service in September 2011 using 2.6 GHz band, emphasising that it is the first network in the Middle East to be based on LTE-FDD technology. In December 2011, the service became available for its domestic post-paid customers. In mid-2012, the operator cut the price of its LTE dongle to attract new customers. Tablets and smartphones were set to be introduced in Q3 2012. On offer is a set of data packages from 100 MB to 20 GB available only on postpaid data SIM cards. The monthly cost is from 29 AED (~6.42 EUR) to 449 AED (~99.45 EUR). Etisalat plans to also launch a LTE service in the 1800 MHz band as well as in the digital dividend band when it becomes available. DU has completed its LTE trials and plans to launch its LTE service in the 1800 MHz band in 2012. It announced the launch of its LTE mobile broadband network in May 2012. Deployment was completed in December 2011 but the launch was postponed by several months due to the lack of 1800 MHz-compatible LTE consumer devices. At launch, services covered 28% of the UAE population.

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1.4.3.

Saudi Arabia Mobile operators in Saudi Arabia are deploying the unpaired time-division version of LTE (TD-LTE), as the country’s military uses much of the spectrum required to deploy in the more common paired FDD-LTE bands. The three main operators all launched commercial LTE networks at the same time, using 2.3 and 2.6 GHz bands, with each claiming to be the first in the region to go live with LTE. This trinity of ‘firsts’ comprises the state-controlled STC, Etisalat-owned Mobily and Zain. The STC LTE network covers Riyadh, Jeddah, Dammam, Al Jubail and Hofuf but the operator is also deploying its network in the northern region of the Kingdom to enlarge its coverage. Zain will refarm its 1800 MHz GSM spectrum band to offer LTE services in Jeddah. Mobily has selected NSN to upgrade its nationwide GSM and 3G networks and expand its commercial TD-LTE network. All operators have put many promotions in place, cutting the price of a plan or of a dongle to attract new customers.

1.5.

LTE in Europe

1.5.1.

Germany In May 2010, the regulatory body, BNetzA, held a multiband spectrum auction where the four incumbents acquired spectrum in the 2.6 GHz band for LTE. Telefonica O2, Vodafone and Deutsche Telekom (but not E Plus) additionally acquired 800 MHz spectrum for LTE. Germany was the first country in Europe to hold an auction for the digital dividend. In a move often noted since, BNetzA attached some rather strict coverage conditions to enhance rural broadband availability, such as the obligation to use the 800 MHz band spectrum first to build up networks in rural areas. In May 2012, BNetzA announced that DT, Vodafone Germany and O2 had met coverage obligations for the 800 MHz band in nine of the 13 required states. Vodafone launched operations of the first LTE service across Germany with the initial aim of providing broadband connections to rural areas in December 2010. Later, it launched its LTE network in Dusseldorf and Krefeld in July 2011. By June 2012, its LTE network covered around 14.5 million households overall, representing around 40% of the country’s territory. Vodafone has launched its first LTE smartphone in February 2011. Deutsche Telekom commercially launched its rural LTE service package branded 'Call & Surf Comfort via Funk' in the digital dividend spectrum in April 2011. It launched its LTE network in the city of Cologne in the 1800 MHz band in July 2011 and started testing LTE in Munich at the city's trade fair centre in December 2011. From Q3 2011 onwards, it has offered the ‘speedstick LTE’ dongle. This device supports LTE in 800, 1800 and 2600 MHz bands plus DC-HSPA+, HSPA and WCDMA in 2100 MHz and EDGE/GPRS. Currently, its urban LTE mobile broadband network has a coverage of 50 cities across the country. O2 launched its LTE service in July 2011 in the digital dividend spectrum, named ‘O2 LTE für Zuhause’ (at home). In July 2012, a year after its launch in rural areas, O2 unveiled its tariffs for its urban 4G LTE mobile broadband service, ahead of a commercial launch. Initial coverage will be focused in Nuremberg and Dresden, shortly after followed by Munich and Leipzig. First LTE mobile devices were HTC One XL and LG True HD LTE smartphones. O2 plans to install 1800 MHz LTE spectrum in 100 German cities and towns this year. E Plus – a member of the Global TD-LTE Initiative – is conducting LTE trials in 2100 MHz, 1800 MHz, and 2600 MHz and LTE TDD 2600 MHz. In June 2012, BNetzA approved an application from E-Plus to allow the mobile network operator to use its 1800 MHz spectrum for the provision of mobile broadband services, such as LTE. It has successfully completed tests of a LTE network in the 1800 MHz frequency band.

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1.5.2.

Sweden Back in early 2008, Sweden awarded 2.6 GHz licenses to five operators, for a total of 223 million EUR. It will be recalled that TeliaSonera was the first operator in the world to launch a commercial LTE service in December 2009 in Stockholm. In May 2012, it announced its coverage extended to 67% of the population, and had 140,000 LTE subscriptions. Net4mobility is a joint venture between Telenor and Tele2 in Sweden for 2G and LTE networks. They commercially launched LTE services to their respective customers in November 2010, initially in Stockholm, Gothenburg, Malmo and Karlskrona. In May 2012, Tele2 Sweden and Telenor Sweden announced joint trials of an LTE-Advanced network where they achieved peak downlink speeds of up to 290 Mbps. By mid-2012, the Tele 2 LTE network had reached 70 000 subscribers. In December 2011, 3 Sweden launched its technical LTE network in Stockholm, Gothenburg and Malmo with plans to build a commercial LTE TDD/FDD dual mode network. Commercial LTE service began in April 2012, using TDD in 2.6 GHz and FDD in 2.6 GHz and 800 MHz. Hi3G has signed a deal with ZTE at 74 million USD to expand its 4G and 3G cellular infrastructure over the next three years.

1.5.3.

Austria The Austrian regulator awarded the 2.6 GHz band by auction in September 2010. All mobile network operators participated in the auction and were assigned spectrum band. The total amount came to 39.5 million EUR. A1 Telecom Austria is the first LTE operator in Austria, having launched its LTE network in Vienna and St. Pölten in October 2010. It revealed its LTE plan, including tariff, soon after acquiring the 2.6 GHz band, and has now implemented its LTE actively. It proposes an Internet speed of up to 100 Mbps/ 50 Mbps using a USB LTE stick for 60 EUR a month. T-Mobile Austria entered a soft launch phase in October 2010. In May 2011, the first LTE base station in Vienna went live and in July 2011 the company launched LTE and its Internet All-Inclusive LTE rate plan. T-Mobile provides all-inclusive Internet LTE package with a connection speed of 100 Mbps/50 Mbps for a monthly fee of 50 EUR. November 2011 saw 3 Austria commercially launch LTE service in Vienna, offering an LTE dongle modem. It announced LTE smartphones for January 2012. In July 2012, the European Commission approved acquisition of Orange Austria by Hutchison on the condition that the new group allows other operators to access the network.

1.5.4.

Rest of Europe Belgium In November 2011, the BIPT sold 4G licenses in the 2.6 GHz spectrum band to four bidders for a total of 77.8 million EUR: Belgacom, BUCD BVBA, KPN Group Belgium and Mobistar. The Belgacom commercial LTE launch is expected before the end of the year and mobile operator Clearwire announced that it too is planning to introduce a commercial LTE network.

France In September 2011, all four French operators were granted licenses for LTE spectrum in the 2.6 GHz band following bids totalling 936 million EUR. This allocation procedure for the 2.6 GHz band was the first stage in awarding 4G licenses. The second consists of allocating the 800 MHz band resulting from the digital dividend. The application deadline for this next round was 15 December 2011, with the government setting a minimum level of 1.8 billion EUR. In December 2011, ARCEP, the regulator, announced the results of the 800 MHz auction where Orange, SFR and Bouygues Telecom each obtained 2x10 MHz. Bids totalled some 2.639 billion EUR. The bid by Free Mobile was unsuccessful but the operator will benefit from national roaming on the SFR network in the 800 MHz auction.

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France Telecom Orange, SFR and Bouygues Telecom will conduct a joint trial to understand the likely interference caused by 800 MHz LTE services to digital TV broadcasts. The trial has been scheduled to start in September after six months of negotiations between the three operators and the government. It will take place in Saint-Etienne. Orange France launched a technical LTE network in Marseille, intending to roll out the network to Lyon and Nantes by year-end. Twelve other cities will be added by the summer of 2013. SFR said it will launch commercial LTE services in Lyon in November 2012 and Montpellier in early 2013 with other cities to follow soon after.

Portugal In November 2011, the spectrum auction started in the 450 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2600 MHz bands, with all three incumbent cell companies, Vodafone Portugal, TMN and Optimus. ANACOM earned a total of 372 million EUR on the first day of its spectrum auction for LTE-suitable frequencies. Optimus and TMN won 800, 1800 and 2.6 GHz (FDD) bands and Vodafone won 800, 900, 1800, 2.6 GHz (FDD and TDD) bands. Spectrum in 450 MHz and 2.1 GHz was left unsold. TMN, Vodafone Portugal and Optimus have commercially launched LTE service in March 2012 in 2.6 GHz. Vodafone Portugal has launched its service covering much of Lisbon and Porto as well as other district capitals. By end May, TMN LTE coverage was 80%, as 800 MHz was brought into use.

Spain Additional 900 & 1800 MHz spectrum In May 2011, the Ministry of Industry announced that France Telecom and TeliaSonera had both been granted radio spectrum as part of the government auction. FT acquired 900 MHz band and Yoigo, the local TeliaSonera body, won 1800 MHz spectrum. In the following month, more licenses were granted, namely to Xfera Moviles which offers its services under the Yoigo banner, and to Orange Espana. They were awarded concessions in the 1800 MHz and 900 MHz bands respectively.

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Digital dividend and 2.6 GHz spectrum In August 2011, nine of the 11 bidders were approved by the Ministry of Industry, having spent a total of 1.65 billion EUR on the spectrum. Telefonica acquired spectrum in the 800 MHz band, 900 MHz and 2.6 GHz band. Vodafone acquired spectrum in the 800 MHz and 2.6 GHz bands. Orange, the last of the major winners of the auction, acquired spectrum in the 800 MHz band and 2600 MHz band. The licenses will run until 2030 and the 800 MHz allocation will not become available until Spain completes its digital switchover in 2014. The other winners are alternative telecoms operators and their licenses are regional ones. The Spanish telecoms ministry allows operators to use digital dividend spectrum by January 2014, a full year earlier than planned to speed the launch of LTE services in the country. At present, Telefónica, Orange and Vodafone have commercial pilot networks in various cities, namely Barcelona, Madrid, Valencia and Malaga.

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2.

LTE telcos' strategies Key findings LTE technology has now been adopted in all areas of the world and is growing rapidly. LTE Advanced, the ‘real 4G’, will be launched in 2013.  At the end of June 2012, according to the IDATE LTE Watch Service, there were 26.5 million LTE subscriptions worldwide on 85 commercial LTE networks. The growth of LTE subscriptions is expected to continue as 350 mobile operators are currently investing in LTE in 104 countries.  In the USA, Verizon Wireless is reporting significant LTE growth with more than 15.7 million LTE subscribers at end-October 2012. The mobile operator was covering 80% of the US population at the same date.  LTE-Advanced is expected to be in commercial service in 2013. The front runners are USA, Japan and South Korea. Multi-carrier and carrier aggregation are certainly one of the most attractive features for the operators and we expect competition on data rates in markets such as South Korea and the USA.  TD-LTE is now commercial in ten countries around the world. The situation is clarifying in China and this should accelerate the building of the TD-LTE ecosystem. TD/FDD complementarity enabled by technical commonalities appears in the commercial field with dual-mode networks.  LTE devices are not anymore slowing down the development of the LTE ecosystem as smartphones are now available for the main markets.  Network sharing is definitely the investment model retained by MNOs due to the limited capex especially for LTE deployment in Europe. Indeed, network sharing remains a way to bring down capex, as seen with the Everything Everywhere joint venture between TMobile and Orange in the UK first merging their 2G and 3G networks and now expanding their sharing agreements for 4G sharing.  Service strategies: video and HD video are widely promoted by LTE operators and many cloud-based services are being launched by the most advanced LTE operators.  LTE tariffs are decreasing in the most advanced markets but LTE is generally introduced with a premium in other markets.  LTE is mainly implemented for additional capacity and is also driving costs down for mobile operators. With the LTE ecosystem growing so rapidly, IDATE forecasts that there will be more than 912 million LTE subscribers worldwide by the end of 2016. However, the development of the LTE ecosystem may be slowed down in some countries by the following hurdles:  Macro-economic constraints are slowing down rapid investments in LTE networks in Europe.  Voice over LTE (VoLTE) is still not a priority for many European operators and has been delayed by Verizon Wireless in the USA.  We expect TD-LTE devices to have a two- to three-year disadvantage over LTE FDD devices.  There are already 15 different frequency bands used for LTE commercial networks worldwide. As a result, LTE spectrum fragmentation is slowing devices availability and hindering international roaming.

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 The availability of LTE devices is no longer a hurdle as many smartphones are now available. The European bands (800 MHz and 2.6 GHz band), however, are not available in the iPhone 5.  LTE spectrum will be auctioned at the end of 2012 in the United Kingdom and the Digital Dividend has not yet been auctioned in all European countries (Finland, Greece, Ireland, and Norway).

2.1.

Lessons from LTE commercial deployments  At the end of June 2012, according to the IDATE LTE Watch Service, there were 26.5 million LTE subscriptions worldwide on 85 commercial LTE networks. The growth of LTE subscription is expected to continue as 350 mobile operators are currently investing in LTE in 104 countries.  Performances are still matching expectations as average downlink speeds offered on commercial LTE networks range from 5 to 25 Mbps. Maximum speeds according to the LTE operators are up to 80 Mbps.  Deployment in South Korea has been very rapid indeed: by April 2012 SK Telecom had fulfilled its plan for nationwide LTE service, only nine months after launching the technology. At the same date, LG U+ had also completed its national coverage.  LTE ARPU figures show that mobile operators are able to increase ARPU figures compared to ARPU on 3G networks.  LTE can be used as a substitute to fixed networks as experienced in Germany (Vodafone and T-Mobile), Norway (Netcom) and the USA (Verizon Wireless). Speeds offered by the LTE operators are quite similar to DSL offers. Figure 2:

LTE in figures

Source: IDATE

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2.2.

Conclusions on MNOs’ strategies  LTE is now a ‘must have’: operators which do not adopt the technology will lose ground in their market and will not benefit from the economies provided by LTE.  Coverage strategies: - Rapid adoption and deployment in South Korea, USA and Japan. CDMA 2000 operators are tending to switch to LTE more quickly than WCDMA operators as the former have fewer upgrade opportunities. Very rapid national deployment in South Korea: 100% of the population was covered only one year after commercial launch of the LTE networks by LG U+ and SKT. - A slow LTE deployment in Europe where 100% of the networks are WCDMA/HSPA with a potential to upgrade to HSPA+.  Voice over LTE is only emerging: - VoLTE commercial implementation started in South Korea and in the USA in Q3 2012. We expect massive commercial launch to take place in 2013 in North America and some countries in Asia and in 2014 in Western Europe. - VoLTE will be implemented by all LTE operators, but only at a later stage. It is necessary to implement an IMS (IP Multimedia Subsystem) in the core network in order to support VoIP. Once VoLTE is implemented and global coverage of the population is reached, operators will be able to provide LTE-only devices to their customers.  LTE Advanced in 2013 - LTE Advanced is not seen by mobile operators as a game changer. It will rather be an incremental implementation with increased performances and the ability to aggregate spectrum. - LTE operators in the USA will certainly use LTE-Advanced as a competitive advantage and will communicate on access speeds.  LTE tariffs: very large buckets plans and a limited premium.  LTE services: - No real new service as a driver but an enhanced user experience with higher data rates and reduced latency. The most innovative operators are probably South Korean operators plus NTT DOCOMO in Japan. - LTE is also used to provide fixed broadband services via stationary LTE modems.  More network sharing is expected in the coming years. Table 4:

LTE front-runners strategic positioning

Source: IDATE

 Market forecasts By the end of 2016, we forecast that overall there will be more than 912 million LTE subscriptions worldwide. At the end of 2016, Asia-Pacific is expected to represent 41.1% of the total, North America 21.6% and Western Europe 16.1%.

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3.

Latest TD-LTE developments

3.1.

Status

3.1.1.

Commercial launches In November 2012, there were 12 TD-LTE commercial networks around the world as the table below shows: Table 5:

Adoption of TD-LTE technology - November 2012

Operators

3G Technology

Frequency band

Date

Aero2 (Poland)

WCDMA

2.6 GHz

2011

Augere (India)

WCDMA and CDMA 2000

2.3 GHz

2012

AsiaSpace

Mobile WiMAX

2.3 GHz

2012?

Bharti Airtel (India)

WCDMA and CDMA 2000

2.3 GHz

2012

Clearwire (USA)

Mobile WiMAX

2.6 GHz

2013

China Mobile

TD-SCDMA

1.9/ 2.3/ 2.6 GHz

2014?

E-Plus (Germany)

WCDMA

2.6 GHz

2012?

Etisalat (Saudi Arabia)

WCDMA

2.6 GHz

2011

Hi3G (3-Sweden)

WCDMA

2.6 GHz

2011

Maxis (Malaysia)

WCDMA

2.6 GHz

2013

Mobily (Saudi Arabia)

WCDMA / WiMAX

2.3 GHz

2011

MTS (Russia)

WCDMA

2.6 GHz

2012

NBN (Australia)

None

2.3 GHz

2012

Omantel (Oman)

WCDMA

2.3 GHz

2012

P1 (Malaysia)

Mobile WiMAX

2.6 GHz

2013

SoftBank (Japan)

WCDMA/PHS

2.6 GHz

2012

Sky (Brazil)

None/ New entrant

2.6 GHz

2012

STC (Saudi Arabia)

WCDMA

2.3 GHz

2011

UK Broadband (UK)

Mobile WiMAX

3.5 GHz

2012

vividwireless (Australia)

Mobile WiMAX

2.3 GHz

2012

Willcom (Japan)

Mobile WiMAX

2.6 GHz

2012

Source: IDATE, LTE Watch Service

3.1.2.

TD-LTE devices According to GSA in November 2012, there were 77 TD-LTE devices available for the 2.3 GHz band (3GPP # 40), 94 for the 2.6 GHz band (3GPP # 38) and 19 devices for the 2.6 GHz band (3GPP #41).

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Table 6:

Some TD-LTE devices (November 2012)

Type Smartphones

Manufacturer Mediatek Huawei Innofidei ZTE NSN

MiFi (Mobile Hotspot)

Mediatek Sequans

Dongles

Booklet CPE

Frequency bands TD‐LTE(B38/40)/FDD LTE(B7)/TDSCDMA/WCDMA/GSM 2.6 GHz TD‐LTE(B38/39/40)/TD‐SCDMA/GSM B38 / B40 TD‐LTE(B38/39/40)/ FDD LTE(B17)/ TDSCDMA/GSM/EDGE TD‐LTE(B38/39/40)/ FDD LTE(B7)/ TD SCDMA/GSM/GPRS/EDGE Band 38 (2.6 GHz), Band 40 (2.3 GHz), Band41 (2.6 GHz)

Qualcomm …

2.3 GHz/2.6 GHz

Nokia ZTE

Band 40 (2.3 GHz), Band 38 (2.6 GHz) TD‐LTE(B38/39/40)/ FDD LTE(B7)/ TD‐SCDMA TD‐LTE(B38/39/40)/ TDSCDMA

Innofidei

Reference

Ascend P1 Rapid MH2300 MHR‐LTE 7508 LM 01 TD-LTE USB Dongle

MF29S2 Rapid MC2100

… Source: IDATE from GTI

3.2.

Main TD-LTE operators The main actors supporting TD-LTE are in China, Japan, India and the USA as shown below: Figure 3:

Main TD-LTE backers

Source: IDATE

3.2.1.

SoftBank (Japan) The bandwidth issue is a highly sensitive one in Japan. Indeed, even with its 3G technology, LTE FDD licenses and WiFi offloading solutions, SoftBank is anxious about being overwhelmed by capacity needs for mobile traffic in the years ahead. SoftBank made a first step towards solving this puzzle by purchasing 100% of shares issued by Willcom, thereby accessing its PHS network frequencies (2.6 GHz). Later, in February 2012, the mobile telco installed 2,000 base stations and planned to deploy around 10,000 others, covering 92% of the population, by the end of 2012. It intends to reach a total of 14,000 base stations by March 2013.

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Figure 4:

SoftBank TD-LTE subscribers

Source: SoftBank

The SoftBank network will offer, the operator states, a download speed of 76 Mbps that can grow to 110 Mbps in the future. Its technology is based on the Advanced eXtended Global Platform (AXGP). The whole TD-LTE strategy of SoftBank is to offer a complementary approach to its existing 3G, LTE FDD and WiFi solutions in very dense urban areas, where bandwidth needs are expected to rise significantly.

3.2.2.

India Since the deployment of FDD-LTE needs the Digital Dividend to be available – which is not going to happen in India before 2013, according to most optimistic observers – TD-LTE is currently the only technology available for LTE in the country.

Bharti Bharti Airtel has BWA licenses in four circles: Kolkata, Karnataka, Punjab and Maharashtra (excluding Mumbai). These licenses in 2.3 GHz band, that were bought in the auction of May 2010 for 33.14 billion INR (650 million USD), led to the first TD-LTE service in Kolkata, in April 2012, followed by a second one in Bangalore in June 2012. The rollout in Kolkata was conducted in partnership with ZTE. Siemens Network, for its part, was selected for Maharashtra in a deal worth 132 million USD. In May 2012, and in order to extend its TD-LTE coverage, Bharti announced the purchase, for 165 million USD, of a 49% stake in the Qualcomm Indian BWA venture. This will allow the mobile telco to operate in Delhi, Mumbai, Haryana and Kerala. Qualcomm will provide technical assistance to Bharti for network architecture and optimisation, infrastructure and device testing. It will also continue to develop and support the underlying technology and the TD-LTE ecosystem. In September, the Bharti Airtel subscriber base had reached 3,180 in Kolkata and Bangalore. In October, the telco announced on its Website that it was almost ready to launch LTE service in Pune. With the new Bharti Airtel 4G LTE service, the company aims to enable HD video streaming. The only plans that exist currently are post-paid ones, which are four in number. They range from 999 INR (18 USD) for the 6 GB plan, and 1,399 INR (25 USD) for the 9 GB plan to 1,999 INR (36 USD) for the 18 GB plan and 2,999 INR (54 USD) for the 30 GB plan. Once the free usage limit is reached, the speed drops to a “measly” 128 Kbps, to use the blunt term used by several Indian industry sources.

Reliance Industries The Indian conglomerate Reliance Industries is going to launch wireless broadband services, by 2013, through its subsidiary Infotel Broadband. In fact, Reliance Industries bought 95% of Infotel Broadband in June 2010, subsequently acquiring the right to use the BWA licenses of its new subsidiary, bought previously for 2.74 billion USD in the 2010 auctions. The only actor to possess 2.3 GHz licenses with a national footprint, the group is planning to deploy 3,000 eNodeB in Jamnagar and Mumbai, with 100 of them expected to be installed by December 2012.

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Samsung was selected by Reliance Industries to roll out the network in the Mumbai circle. It will supply back-end equipment such as RAN, core layer, fibre cables and access layer. Company sources are giving reassurances that it is ensuring that broadband services are truly broadband in nature, whenever they are launched, and that Quality of Service is up to the mark, so that there is no disappointment to consumers.

Aircel Aircel is unlikely to launch its 4G services until some point in its next fiscal year, which starts in April 2013. According to Indian media, industry sources have reported, the main reason is regulatory uncertainty, particularly about the date and prices of the auction of the more mainstream FD-LTE spectrum in the Digital Dividend band. Another contributing factor is ongoing industry upheaval amid events such as the re-auction of GSM spectrum (some of which could potentially be refarmed for LTE) and the looming end of domestic roaming charges. It is thought, to cite Goldman Sachs, that “Aircel was initially inclined toward using BWA spectrum for WiMAX rollout given that it had WiMAX solutions (even before auctions); but with improving visibility of the LTE ecosystem it is now focusing on LTE rollout. We believe Aircel’s strategy will be similar to that of Bharti — ie; use LTE to complement its existing 3G business by focusing on tablets/dongles on LTE, and using LTE as a backbone to transfer traffic load”.

Tikona Currently, several Asian reports say, Tikona is providing wireless broadband (largest outdoor WiFi network, 42,000 base stations) using 83 MHz (2.400 to 2.483 GHz) in the unlicensed band in 36 top cities, and its product offerings are targeted towards enterprise consumers and household customers. In August 2010, the company secured LTE licenses in five circles (Gujarat, Himachal Pradesh, Rajasthan, Uttar Pradesh East and UP West) covering 29% of the urban population of India. In August 2012, it was announced that Tikona Digital Networks would buy 4G network gear worth 200 million USD from the world's top LTE vendors in the run-up to rolling out wireless broadband networks in the five circles where it won the BWA licenses. It is expected that the first launch of TD-LTE service will be in early 2013, in Gujarat and Rajasthan. The management of Tikona believes that LTE will help it complement its existing indoor high capacity–high speed WiFi offerings for the home and SMEs. Further, LTE will help the pure mobile telco maintain a good end-to-end QoS and grow its subscriber base which is now timidly evolving with its WiFi access technology.

3.2.3.

Hi3G (Sweden) Hi3G, the Hutchison Whampoa subsidiary, and ZTE announced the launch of the world’s first LTE FDD/TDD dual-mode commercial network in January 2012. ZTE has reported rolling out a LTE FDD/TDD dual-mode network for Hi3G in Stockholm, Gothenburg and Malmo and the vendor is to upgrade the rest of Hi3G’s Swedish network to dual-mode LTE technology. Hi3G expects significant improvement in network performance and a significant reduction of its total cost of ownership (TCO) thanks to the use of the new generation of energy-saving base stations. It purchased 50 MHz of TDD spectrum previously owned by Intel in the 2.6 GHz band (#38). The first integrated LTE FDD and TD-LTE network in Sweden is a capacity solution for carriers which have many pieces of spectrum spread over various frequency bands. Mobile operators could create two interworking macro networks or could also use the TDD band for small cells, or dedicate it to specific services, such as M2M. The smart grid could benefit from such an approach. This move could also raise interest for forgotten TDD spectrum in the 2.1 GHz band even though many advocate for paired use of the almost unused TDD spectrum in Europe.

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3.2.4.

Clearwire (USA) Clearwire and majority owner Sprint announced agreements in January 2012 that give Clearwire the necessary funding to convert its Mobile WiMAX network to TD-LTE. The agreements, which could represent up to 1.6 billion USD in total, will tighten the links between the two US carriers. As far as network buildout is involved, Sprint and Clearwire will collaborate on network planning and will jointly select LTE macro-cell sites to match Sprint ‘hotspots’. They will also work together to support the TD-LTE ecosystem in Band 41 (2496-2690 MHz) for standard devices and chipsets. Sprint is expected to launch such devices as dongles and phones that will utilise the Clearwire TDD-LTE network in 2013. Clearwire needs 600 million USD in capex to deploy a TD-LTE overlay across its Mobile WiMAX existing footprint which represents a little bit more than 130 million POPs. It will need between 150 million USD and 300 million USD to maintain its Mobile WiMAX network In October 2012, Clearwire announced that it will install 2,000 sites by June 2013 instead of the 5,000 previously planned. This will reduce costs by staggering the build-out, but will slow the transition from the current WiMAX network to TD-LTE, planned for key urban customer bases. This puts Clearwire at a competitive disadvantage given the rapid expansion of rival 4G offerings. However, the revised schedule will reduce their costs and "better align capex with the expected receipt of LTE revenues" from Sprint, its main wholesale customer – and majority stakeholder. The big hope now, for Clearwire, will be that SoftBank of Japan, which is purchasing a 70% stake in Sprint, will also acquire, or inject cash into, the 4G joint venture once its Sprint deal is approved. SoftBank also has a TD-LTE network in Japan and has joined various device and roaming initiatives with China Mobile and Clearwire to stimulate the TD-LTE ecosystem. The firm will be disappointed if the second largest TD-LTE operator pulls back on its plans.

3.2.5.

SKY (Brazil) SKY, the largest cable and satellite TV operator in Brazil, was, in December 2011, the first to launch fixed wireless service based on TD-LTE technology in Latin America. Nokia Siemens Networks was the sole vendor for the launch and 4G chipmaker Sequans Communications is providing the LTE semiconductor solution for customer devices for SKY. NSN provided its CPEi-lte 7212, a wireless router built for indoor use that provides fixed wireless connectivity to TD-LTE services via WiFi or Ethernet. Initially, SKY launched fixed wireless broadband service for customers in Brasilia. It plans to roll out service to new customers in other Brazilian cities, and elsewhere in Latin America.

3.2.6.

Poland In Poland, CenterNet and Mobyland were acquired in 2010 by Aero2, a wholesale-centric provider. The latter had launched its FDD LTE network in the 1.8 GHz band in 2010 first and a year after the TDD version (in the 2.5 and 2.6 GHz bands) was operational. By July 2012, the Aero2 network covered 28% of the population. The telco has positioned itself as a wholesale operator and leases LTE access to Polkomtel.

3.2.7.

UK Broadband In March 2012, British operator, UK Broadband launched a TD-LTE commercial service using the 3400-3600 MHz band (a total amount of 124 MHz of spectrum). This is the world’s first deployment of TD-LTE 3.5 GHz and the first commercial 4G deployment in the UK. The network initially covers the South Bank and Borough areas of Southwark.

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Figure 5:

UK Broadband spectrum

Source: UK Broadband

In October 2012, UKB, which operated a wholesale model, launched a retail fixed wireless service offered via a new consumer-facing brand, Now Broadband. Its monthly packages start from 21.50 GBP for homes and 30 GBP for businesses.

3.2.8.

NBN (Australia) In July 2011, NBN Co the public-private company set up to oversee the construction of the Australian National Broadband Network, signed a ten-year contract with Ericsson, valued at 1.1 billion AUD (1.134 billion USD). They will provide radio access, core and transmission infrastructure in addition to a range of managed services In May 2012, the company started testing its fixed wireless infrastructure. The operator is bringing the service to Toowoomba and Tamworth. The fixed wireless network — due for completion in 2015 – will cover 4% of the population with a download speed of 12 Mbps and an upload speed of 1 Mbps. The TD-LTE in 2.3 GHz is used by NBN as a ‘last mile’ solution, in order to cover areas where there is no fibre technology.

3.2.9.

Saudi Arabia Saudi Telecom Company (STC) In September 2011, Nokia Siemens Networks and Huawei deployed a next-generation mobile broadband network for STC, using TD-LTE technology in the 2.3 GHz band (#40). In May 2012, the LTE network was covering the cities of Riyadh, Jeddah, Dammam, Al Jubail and Hofuf.

Zain Saudi Arabia A trial phase began in February 2010 with partners Motorola, Ericsson and Huawei. Its LTE service was launched in the three cities of Riyadh, Jeddah and Dammam. Zain plans to expand its LTE network to cover the major cities of the Kingdom by the end of 2012. The network is being deployed in the 1800 MHz (FDD) band (#3).

Etisalat (Mobily) In September 2011, Mobily launched its LTE service using the 2.3 GHz band (#40). The first phase of coverage included the cities of Najran, Jazan, Al Kharj, Ras Tanura, Algurayat and Aldudamy, with launches two weeks later in Hail, Al Baha, Al Mujamaaa and Wadi Al Dawasir. The following month saw a third batch of cities go live: Riyadh, Jeddah and Dammam. Targeted areas for TD-LTE coverage include more than 32 cities and towns, representing 85 percent of populated areas in Saudi Arabia, the operator noted in a statement.

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3.2.10.

China Mobile (from the October issue of Insight on China) In March 2011, China Mobile Communications Corp., also known as ‘China Mobile’ began field testing of LTE TDD which is commonly known as ‘TD-LTE’ in order to rhyme with the operator’s 3G service, TD-SCDMA. China Mobile plans to spend 1.5 billion RMB (190 million EUR) for first-phase testing. The scale of investment is likely to increase as more localities are enlisted for testing and, later, for commercial service. The first phase included the six cities of Shenzhen, Hangzhou, Guangzhou, Shanghai, Nanjing and Xiamen. In addition, Beijing was used as a demonstration site, with fewer base stations installed. In March 2012, the number of sites was expanded to ten and in July China Mobile added three more cities to a total of 13. Figure 6:

TD-LTE trials in China

Source: GTI

For the first-phase of testing, the six cities were assigned in random to six network equipment manufacturers. Table 7:

First-phase testing sites and assignments

Testing Sites Shenzhen Guangzhou Shanghai Hangzhou Nanjing/Beijing Xiamen 1

Equipment Makers Ericsson and Huawei ZTE Alcatel-Lucent1 Nokia Siemens Networks Datang Mobile Motorola

Through Shanghai Bell which is 51% owned by Alcatel-Lucent.

Source: IDATE

In addition, some ten chipmakers were invited to join the testing, including Qualcomm, STEricsson, Innofidei, Leadcore, Spreadtrum, Sequans, MTK, Marvell, Hi-Science (Huawei), ZTE Microelectronics (ZTE) and Vimicro. Some companies only participated in part of the testing. The main objective of the first-phase testing was to verify 3GPP LTE Release 8 specifications and performance of single-mode terminals (mostly data cards). To ensure compatibility, performance and future expansion, all network equipment makers ran tests with chipmakers in rotation. This arrangement, however, did not secure any future contract for a particular supplier in the locality it is assigned to. According to China Mobile and MIIT, single-mode terminals performed well in outdoor settings. By the end of first-phase testing which ended in September 2011, China Mobile reported that a total of 850 LTE base transceiver stations (BTS) were installed, while the goal was to have 1,200 BTSs in total or about 200 in each city.

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The second-phase testing began in late 2011 in ten cities (including Beijing). The main purpose was to test compliance with 3GPP LTE Release 9 specs, multi-carrier antennas (MIMO) and multiple-mode terminals for TD-SCDMA and GSM, among others. As with the previous round, equipment makers ran through an exhaustive test list with chipmakers and terminal makers for performance and compatibility issues. Initial results were disclosed in June 2012, but China Mobile said testing would continue especially in the new sites of Ningbo, Fuzhou and Chengdu. Figure 7:

TD-LTE devices used by China Mobile for the tests

Source: China Mobile

It had been widely expected that commercial launch would begin after the second-phase testing. However, the results showed problems in the performance of multi-mode terminals such as stability and signal strength when switching between LTE and TD-SCDMA networks. This may be caused by chipset performance or, possibly, by sparse BTS installation. Lack of LTE handsets is another reason for delaying commercial launch, being attributed to chipset supply issues especially in multi-mode products. By July, China Mobile had built 1,300 LTE BTSs in 10 cities, mostly around business centres, shopping areas and thoroughfares. Spectrum for LTE The MIIT has allocated 50 MHz (2570-2620 MHz, Band D) for LTE testing, but this is believed to be a temporary measure and two more frequency bands are used for testing: 1880-1900 MHz (Band F) for outdoors and 2320-2370 MHz (Band E) for indoors, in addition to Band D for outdoors. Band F is being used in part by TD-SCDMA and ‘Little Smart’ (‘Xiao Ling Tong’ using PHS technology), an antiquated mobile service set to be phased out, so that there is only 20 MHz bandwidth available in Band F for TD-LTE. Band E, which is used by TD-SCDMA service (2320-2350 MHz), is assigned in part (2350-2370 MHz) to Tianjin, Fuzhou and Ningbo for outdoor testing. In fact, this is more of a convenience measure because experiments by China Mobile show that the data throughput of TD-LTE is compromised by 10-20% when using a time slot as guard band to avoid interference from TD-SCDMA signals. Fragmentation and short supply could result in a 40% gap and hinder growth when commercial service is underway. Suggestions have been to open other bands, but no decision has been taken as yet. Table 8:

Spectrum assignment for LTE testing

Band 1.8 GHz(F) 2 GHz(A) 2.3 GHz(E) 1.8 GHz(F) 2.3 GHz(E) 2.6 GHz(D)

Duplex Mode TDD TDD TDD TDD TDD TDD

1

Frequency 1880-1895 MHz 2010-2025 MHz 2320-2350 MHz 1895-1915 MHz 2350-2370 MHz 2580-2620 MHz

Platforms TD-SCDMA, PHS TD-SCDMA TD-SCDMA TD-LTE (outdoor) 2 TD-LTE (indoor) TD-LTE (outdoor)

Bandwidth 15 MHz1 15 MHz 30 MHz 20 MHz 20 MHz3 40 MHz

2

Notes: The original plan for TD-SCDMA was 1880-1900 MHz before TD-LTE. For testing purposes in three cities. 3 2350-2370 MHz was reassigned to TD-LTE testing which reduces total bandwidth for TD-SCDMA from 80 MHz to 60 MHz.

Source: IDATE

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Demonstrations Encouraged by preliminary results, since May 2012, China Mobile has been demonstrating TD-LTE services in the five cities of Hangzhou, Shanghai, Shenzhen, Guangzhou and Beijing. With the exception of Beijing, they boast the largest number of BTSs already covering 80% of city centres. They are also most likely to be the first to enter commercial service. Most demos are similar in design. For stationary settings, the demos cover high-speed Internet access, hi-def video, online gaming, streaming video and multi-site live conferencing, with typical data rates of 70-80Mbps. For mobile service, the LTE signal is fed to two gateways mounted in a bus that convert LTE to WiFi, capped at 40-50 Mbps (actual speed about 30 Mbps). The reason for this configuration is that no TD-LTE handsets are available, so laptop computers and other mobile devices that process WiFi signals are used instead as terminals. In most demos, the audience is impressed by the LTE speed and its smooth hand-off when buses run through coverage areas. However, a demo far from a true representation of realworld performance because there are only a few terminals using the network and the bus is moving around in the centre of coverage where the signal is strongest. In addition, an experience with a laptop can be very different from a handset in terms of processing power, memory and display. Most of all, there is only a handful of services available for the demo and this less impact on the network. Nonetheless, the demos and public reaction are serving as strong evidence and reasons for confidence for China Mobile. The operator believes TD-LTE is ready for commercial service at least on a limited basis. However, many issues remain to be resolved, notably spectrum, license and terminal supply (including chipsets). LTE in Hong Kong In April 2012, China Mobile launched its LTE FDD service in Hong Kong, an autonomous region in South China. The service runs on the 2600 MHz spectrum for which China Mobile (HK) had obtained a license from the Hong Kong telecom regulators. In February, China Mobile (HK) won another bid for operating TD-LTE on 2330-2360 MHz in the territory. The LTE FDD service received favourable reports with competing services for both outdoors and indoors. In June, China Mobile announced roaming service between LTE FDD in Hong Kong and the TD-LTE test base in Hangzhou, to showcase the compatibility of future services on the mainland. In July, China Mobile (HK) contracted Ericsson and ZTE to build a TD-LTE network in Hong Kong. With both LTE networks, China Mobile plans to provide full coverage for outdoors and 80% indoors by the end of 2012. The initial success in Hong Kong gives a strong boost to LTE testing at home. First, TD-LTE is a commercially viable technology; second, LTE FDD and TD-LTE networks can work seamlessly which provides roaming for future LTE users from the mainland. Besides technology and operations, China Mobile wants to use Hong Kong as a model to attest its ability to build and run a successful TD-LTE network and promote the technology in other countries/operators that embark on TD-LTE. Licensing It is certain that China Mobile will be granted an LTE license, there is not yet any certainty in how many licenses MIIT will issue to China Unicom and China Telecom – the latter have yet to begin ground work. China Mobile has repeatedly said it does not want to become the only LTE provider. The MIIT has made similar remarks which have raised the possibility that China Unicom and China Telecom could be brought onto the LTE bandwagon involuntarily. It is perfectly possible that an operator could have a license without service operations, or with delayed operations. However, having a license symbolises competition even without a physical network and service. On the other hand, MIIT may not want to issue licenses alone since it may imply endorsement of a market monopoly. This is at odds with current government policy.

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4.

LTE pricing With the introduction of LTE services, mobile network operators are now having to find the right mix between data plans that are affordable enough to foster subscriptions and prices that are coherent with operator investments in infrastructure deployments. As with the introduction of fibre-based access, LTE is an opportunity for operators to increase ARPU with benefits valued by the consumer. In constructing their offerings, mobile operators must find different criteria to segment them, namely:  Segmentation by bandwidth, and thus connection speed. The greater the bandwidth, the faster is data transfer. Some services may require more bandwidth than others. This is especially the case of high definition videos but more generally it also applies to large file transfers. Bandwidth in the uplink may also be an element of differentiation of the package.  Segmentation by the volume of data that can be transferred. This criterion is actually highly dependent on the bandwidth available. Indeed, the faster that content is downloaded, the more data that one can download in the same time span.  Segmentation by usages: usages such as VoIP, tethering (that is to say, sharing the cellular connection using its phone as a WiFi router for additional devices) or gaming (which requires reduced latency).  Premium subscriptions based upon quality of service are also very likely to appear. The Singapore operator StarHub is planning innovative LTE rate plans in 2012 based on both quality and speed of service. In the longer term, content-based pricing is also an option for mobile operators. The following is a review of LTE tariffing in the world.

4.1.

North America

4.1.1.

USA Verizon Wireless Verizon Wireless launched the nation’s first LTE network in up to 30 markets at the end of 2010 and plans to cover virtually all of its current nationwide 3G areas by end-2013. It has two 4G plans on offer, one for USD 50 with a monthly 5 GB data allowance and the other for USD 80 for 10 GB data allowance. Both plans feature an overage fee of USD 10 per 1 GB and are only available for 4G modems. With the launch of LTE smartphones and tablets, Verizon has also introduced a 4G data plan, which basically means that a user wanting to use a smartphone device has to purchase both a voice package and a 4G Data package. If subscribers want to share their smartphone data connection (for example, using the smartphone as a LTE modem providing WiFi connectivity –also known as MiFi function-, or connecting a PC to the smartphone – the socalled tethering function) they have to choose another specific plan, as described in the following table.

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Table 9:

Verizon Wireless rates

Plan 4G mobile broadband plans (for 4G USB modems and MiFi) 4G data plans for LTE smartphones (no tethering)

4G data plans for LTE smartphones with tethering

Monthly rate USD 50

Monthly data allowance 5 GB

Overage fee

Network

USD 10 per 1 GB

4G

USD 80 USD 30

10 GB 2 GB

USD 10 per 1 GB USD 10 per 1 GB

4G 4G

USD 50 USD 80 USD 50

5 GB 10 GB 4 GB

USD 10 per 1 GB USD 10 per 1 GB USD 10 per 1 GB

4G 4G 4G

USD 70 USD 100

7 GB 12 GB

USD 10 per 1 GB USD 10 per 1 GB

4G 4G

Source: Verizon Wireless

Devices At the time of launching its LTE network, Verizon Wireless provided two LTE USB modems. Both were capable of connecting to the network and were backward-compatible with the CDMA 2000 EV-DO 3G network. Their price of USD 149.99 dropped to USD 99.99 after a USD 50 mail-in rebate with a new two-year contract on a 4G LTE mobile broadband plan. Being the first operator in the world to introduce an LTE-based smartphone in May 2011, the HTC Thunderbolt, Verizon was also very dynamic in adding other such new evolved devices to its portfolio. As of February 2012, Verizon had 20 LTE devices available:  Eleven smartphones: Droid RAZR by Motorola, Droid RAZR Maxx, Galaxy Nexus by Samsung, Spectrum by LG, HTC Rezound, Droid Bionic, Samsung Stratosphere, Pantech Breakout, Revolution by LG, Droid Charge and Thunderbolt by HTC.  Three tablets: Droid Xyboard 8.2, Droid Xyboard 10.1, Samsung Galaxy Tab 10.1  Two laptops / netbooks  Two mobile hotspots  Two USB dongles

AT&T It is only in September 2011 that AT&T started launching LTE services, beginning with five cities (Atlanta, Chicago, Dallas-Fort Worth, Houston and San Antonio). In early February 2012, its LTE network covered 26 markets. The AT&T Mobility unit operates its network in the 700 MHz frequency band and at launch offered data-only services with USB dongles. AT&T has now launched other LTE devices and claims that their devices will offer better battery life than its competitor Verizon Wireless. This is understandable as, contrary to Verizon, which relies on CDMA 1xRTT to provide voice services, AT&T do not need to keep two radios live at the same time and will instead use Circuit Switch Fallback as a way to provide legacy services. It is interesting to note that, in response to the competitive pressure of Verizon Wireless, AT&T launched its first 3G/LTE dongles before even launching its LTE network, only stating that the LTE coverage could be somewhat limited at the outset.

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Table 10:

AT&T rates

Plan DataConnect for 4G LTE mobile hotspot and laptop connect DataConnect for 4G LTE mobile hotspot and laptop connect Data Connect for 4G LTE tablets Data Connect for 4G LTE tablets Data Connect for 4G LTE smartphones Data Connect for 4G LTE smartphones

Monthly fee USD 50

Monthly data 5 GB

Overage fee USD 10 per GB

USD 80

10 GB

USD 10 per GB

USD 35 USD 50 USD 30 USD 50

3 GB 5 GB 3 GB 5 GB

USD 10 per GB USD 10 per GB USD 10 per GB USD 10 per GB

Source: AT&T

AT&T now has nine LTE devices available:  Five smartphones: Pantech Burst, HTC Vivid, Samsung Galaxy S II Skyrocket, LG Nitro HD and Samsung Galaxy Note.  Two tablets: Pantech Element and Samsung Galaxy Tab 8.9  Two mobile hotspots

Clearwire Postpaid offer Clearwire operates its mobile WiMAX service under the ‘Clear’ brand. The company is owned by Sprint Nextel and the two leading cable operators, Comcast and Time Warner Cable. It provides its mobile WiMAX service to its customers and through wholesale relationships. The service is offered with no long-term contract, with customers being able to decide to stop the service whenever they want without paying termination fees. The service is stopped at the end of the current bill cycle. Table 11:

Clear rates

Plan

Device

Monthly cost USD 50

4G Mobile

Dongle laptop

4G Mobile Basic

Dongle laptop

USD 35

4G Mobile Duo

Dongle laptop

USD 100

Network Mobile WiMAX (DL No speed cap UL 1.5 Mbps Mobile WiMAX (DL 1.5 Mbps UL 500 Kbps) Mobile WiMAX (DL No speed cap UL 1.5 Mbps )

Data cap

Overage cost

Unlimited

--

Unlimited

--

Unlimited

--

Source: Clearwire

Clearwire mainly offers a simple one-fee flat-rate tariff for its Clear service. The 4G rate is offered at USD 50 per month (it was offered at USD 45 per month). Customers can consume unlimited data in Clear 4G coverage areas. Clearwire also offers a mobile Internet plan named ‘4G Mobile Basic’ for USD 35 per month with speed of 1.5 Mbps download and 500 Kbps upload (it was offered at USD 20). Prepaid package Clearwire launched ‘Rover’, its new WiMAX brand, on 30 August 2010. Its 4G prepaid services were targeted at digitally-addicted young customers who did not wish to subscribe to long-term contracts or over-priced Internet services. The service was dropped in May 2011. Now it offers nearly the same service under the name ‘Short-term options’ for two hours, a day and a week. Options are available with the device from Clear retail locations.

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Table 12:

Clear rates

Price

Duration

Data cap

USD 5

2 hours

Unlimited

USD 10

Day

Unlimited

USD 25

Week

Unlimited

Source: Clearwire

Sprint Nextel Sprint Nextel offered a 4G bundle provided by Clearwire with its 3G package. The rate plan was based on an unlimited 4G use and 5 GB for 3G for a price of USD 59.99. Sprint Nextel has dropped its unlimited WiMAX data for mobile broadband plans in November 2011 and it now offers new Mobile broadband rate plans. When customers take a smartphone, a USD 10 Premium Data add-on charge will apply. Table 13:

Sprint plans

Plan

Monthly fee

Monthly data allowance

Overage fee

Network

3G/4G mobile broadband connection plan (including tabs)

USD 80

12 GB

USD 0.05 per 1 MB

3G/4G

3G/4G mobile broadband connection plan (including tabs)

USD 50

6 GB

USD 0.05 per 1 MB

3G/4G

3G/4G Mobile hotspot connection plan (including tabs)

USD 35

3 GB

USD 0.05 per 1 MB

3G/4G

1 GB

USD 0.05 per 1 MB

3G/4G

3G/4G tablet connection plan

USD 20

Source: Sprint

Sprint Nextel was the first operator, thanks to Clearwire, to advertise its 4G offering but it is only recently that it has really started developing its portfolio of WiMAX devices, especially with HTC smartphones (HTC Evo 4G and EVO 3D), and now also with such Samsung devices as the Mobile WiMAX version of the Samsung Galaxy SII. In terms of tablets, the portfolio is less rich with only the HTC View 4G available. Table 14:

Sprint 4G device portfolio

Phones

Laptops / tablets

USB dongles, PC cards & MiFi (3G/4G)

HTC Evo 4G

HTC Evo View 4G

Sierra W. Overdrive Pro Mobile Hotspot

Nexus S 4G

Dell Inspiron Mini 10

Sprint USB U600

HTC Evo Design 4G

Dell Inspiron 11z

Sprint USB Modem 250U (Sierra W.)

Samsung Galaxy S II Epic 4G Touch

Merlin CC 208 Card (Novatel W.)

HTC Evo 3D

MiFi Mobile Hotspot (Novatel W.)

Motorola Photon 4G HTC Evo Shift 4G Samsung Epic 4G Samsung Conquer 4G Source: Sprint

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4.2.

Asia

4.2.1.

Japan NTT DOCOMO NTT DOCOMO launched LTE service Xi in December 2010 first in Tokyo, Nagoya and Osaka areas. Until now in Japan, NTT DOCOMO and the other operators have offered what they call a “two-staged unlimited” data rate. This combines a low-priced data rate plan with a highpriced one into a single package, by offering a low monthly charge for low data usage and higher, flat, monthly charge for higher data usage. For its LTE offering, NTT DOCOMO has set a rate which maintains a ‘two-staged’ style and introduces an overage fee, as is now common in the USA and in many countries in Europe. The data cap of 5 GB set by NTT DOCOMO is higher than the monthly consumption levels of 99.6 % of its 3G subscribers. The rate plan is detailed in the table below. Figure 8:

NTT DOCOMO Xi rates (commercial launch 12/2010)

Source: NTT DOCOMO Table 15:

NTT DOCOMO Xi rates

Plan

0 - 3177 KB

3177 - 20667 KB

20667 KB – 5 GB

Overage 5 GB

Xi Data Plan

JPY 2,470 EUR 25

Additional JPY 0.315 per KB

JPY 7,980 EUR 78

JPY 2,625 per 2 GB

Xi Data Plan Ninen

JPY 1,000 EUR 10

Additional JPY 0.315 per KB

JPY 6,510 EUR 64

JPY 2,625 per 2 GB

Source: NTT DOCOMO

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In September 2011, NTT DOCOMO added two other data plans aimed at their LTE-based smartphones and tablets: Plan

Monthly fees

Monthly fees

Data cap

Comments

Xi Two-Year Data Plan Flat

JPY 4,410

EUR 43

7 GB

Speed throttled to 128 kbps after reaching data cap. For JPY 2,625, subscribers can add more GB at max speed.

Xi Data Plan Flat (no commitment)

JPY 5,880

EUR 57

7 GB

Speed throttled to 128 Kbps after data cap has been reached. For JPY 2,625, subscribers can add more GB at max speed.

Xi Two-Year Data Plan 2

JPY 2,500

EUR 24

9,524 KB

JPY 0.26525 per additional KB

Xi Data Plan 2 (no commitment)

JPY 3,970

EUR 39

9,524 KB

JPY 0.26525 per additional KB

Source: NTT DOCOMO

NTT DOCOMO has announced its 2011 winter – 2012 spring product line-up of 24 models but currently has four LTE smartphones (Medias LTE N-04D, LG Optimus LTE, Arrows X LTE F-05D and Samsung Galaxy S II) two LTE tablets (Arrows tab F-01D, Samsung Galaxy Tab), two USB modems and two hotspots.

UQ Communications UQ Communications of Japan is owned by KDDI. It provides Mobile WiMAX service to its customers and through wholesale relationships. It only sets rates for its Mobile WiMAX service and does not offer 3G bundling. Its rate plans are set to be similar to those of other mobile operators in Japan. The starting price for ‘UQ step’ is JPY 380 for up to 1.1 MB, after which JPY 0.042 per packet (128 bytes) is charged, up to a maximum of JPY 4,980. Another rate plan, ‘UQ Flat’, is a simple one-fee flat-rate rate of JPY 4,480 (USD 45) per month. There is also the ‘UQ Flat yearly passport’ launched in November 2010 which offers WiMAX Internet service at JPY 3,880 per month with a contract for one year. UQ has offered the mobile router ‘WiMAX speed WiFi’ and the ‘WiMAX Data Communication Card’ at special prices for customers subscribing to the UQ Flat yearly passport at least until January 2011. In October 2010, UQ Communications launched the ‘WiMAX PC Value set’ which offers free mobile Internet service by using embedded PC cards. The deal is for a maximum of two months without registration fee, for customers applying to UQ Flat or UQ Step. There is also a prepaid rate called ‘UQ 1Day’ which includes unlimited use for JPY 600 per 24 hours period. Table 16:

UQ Communications rates

Plan

Device

Monthly cost (JPY)

Monthly cost (EUR)

Network

Data cap

Overage cost

UQ Step

Dongle

JPY 380 4,980

EUR 4 - 49

Mobile WiMAX (DL 40 Mbps / UL 10 Mbps )

Unlimited

-

UQ Flat

Dongle

JPY 4,480

EUR 44

Mobile WiMAX

Unlimited

-

JPY 3,880

EUR 38

Mobile WiMAX

JPY 600

EUR 6

Mobile WiMAX

Unlimited

-

UQ Flat year passport UQ 1 Day

Dongle

Source: IDATE

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KDDI bundles the Mobile WiMAX service with its 3G offering: Table 17:

Current major data rates

Operator

Device

KDDI

Dongle

Monthly cost (JPY) JPY 2,205 5,985

Monthly cost (EUR) EUR 22-59

JPY 2,0306,800

EUR 20-66

Network

Data cap 3G

Unlimited

Overage cost -

3G/Mobile WiMAX (DL 40 Mbps / UL 10 Mbps)

Unlimited

-

Source: IDATE

4.2.2.

South Korea LG U+ LG Telecom launched its LTE network in July 2011 in Seoul and two major cities, with around 500 base stations at launch. It planned to reach 84 cities and eight counties across the country and 500,000 subscribers by the end of 2011 and have a nationwide coverage by mid-2012, targeting three million LTE users by the end of 2012. LG U+ operates its network in the 800 MHz band and has further plans to deploy its network in the 2100 MHz band, with 10 MHz of bandwidth. Having only offered LTE dongles and routers in the beginning, LG U+, just as SK Telecom, has added LTE smartphones to its portfolio: the LG Optimus LTE, the Samsung Galaxy SII LTE, the Sky Vega LTE as well as the Samsung Galaxy Note. It also offers two LTE tablets, the Samsung Galaxy Tab 8.9 and LG Optimus Pad LTE and two LTE dongles. Table 18:

LG U+ LTE plans

LTE Devices

Monthly cost

Dongle / Router

KRW 30,000

Monthly cost (EUR) EUR 20

Network

Data cap (GB)

Overage cost

Voice (min)

LTE

5

KRW 30 per MB

-

Dongle / Router

KRW 50,000

EUR 34

LTE

10

KRW 30 per MB

-

Tablets

KRW 35,000

EUR 24

LTE

4.5

-

Tablets

KRW 49,000

EUR 33

LTE

9

-

Tablets

KRW 59,000

EUR 40

LTE

13.5

-

Tablets

KRW 79,000

EUR 53

LTE

22.5

-

Smartphones

KRW 42,000

EUR 28

LTE

2.25

-

200

Smartphones

KRW 52,000

EUR 35

LTE

3.75

-

250

Smartphones

KRW 62,000

EUR 42

LTE

9

-

350

Smartphones

KRW 72,000

EUR 49

LTE

15

-

500

Smartphones

KRW 85,000

EUR 57

LTE

21

-

750

Smartphones

KRW 100,000

EUR 68

LTE

30

-

1,200

Smartphones

KRW 120,000

EUR 81

LTE

36

-

1,500

Source: LG U+

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SK Telecom SK Telecom launched its first commercial LTE network in July 2011. Operating on the 800 MHz frequency band, SK Telecom announced that the network will be able to support downlink peaks at 37.5 Mbps . It has reached 500,000 LTE subscribers at the end of 2011 and plans to have 10 million by 2015, with the goal of passing five million by end-2012). In terms of network deployment, SKT hopes to bring national coverage before April 2012. Meanwhile, SK Telecom provides HSPA+ services as well as Mobile WiMAX (WiBro) mobile broadband service. At launch, SKT proposed four data-only devices, using USB dongles and a mobile hotspot unit such as a MiFi, but it now offers the Samsung Galaxy S II, LG Optimus LTE, HTC Raider 4G, Sky Vega LTE, Samsung Galaxy Tab 8.9 and Samsung Galaxy Note. Voice and SMS services are provided through Circuit Switch Fallback on the 3G network. Interestingly, SK Telekom does not provide any unlimited data plan, blaming continued strain on the network despite investment in the infrastructure. Table 19:

SK Telecom LTE plans

Plan

Device

LTE Modem 35 LTE Modem 49 LTE 62

Dongle

LTE 72

Smartphone

LTE 85

Smartphone

LTE 100

Smartphone

Dongle Smartphone

Monthly cost (KRW) KRW 35,000 KRW 49,000 KRW 62,000 KRW 72,000 KRW 85,000 KRW 100,000

Monthly cost (EUR) EUR 24

Network

Data cap

Overage cost

Voice

-

350 min

LTE

5 GB

EUR 33

LTE

9 GB

EUR 42

LTE/3G

3 GB

KRW 51.2 per MB KRW 51.2 per MB NA

EUR 49

LTE/3G

5 GB

NA

450 min

EUR 57

LTE/3G

7 GB

NA

650 min

EUR 68

LTE/3G

10 GB

NA

1,050 min

-

Source: SK Telecom

KT KT launched its LTE service in Seoul, in January 2012, after winning final court approval for the shutdown of its 2G network. It plans to reach four million LTE subscribers in 2012 by rolling out the technology nationwide (84 cities) before end-April 2012. It announced that it will introduce more complete LTE services than its rivals despite its late start. KT is offering three LTE smartphones, namely the Samsung Galaxy S II, the Samsung Galaxy Note and the Sky Vega LTE M. Table 20:

KT LTE plans

Plan

Device

Monthly cost (EUR) EUR 42

Network

Smartphone

Monthly cost (KRW) KRW 62,000

LTE-620

LTE/3G

3 GB

NA

350 min

LTE-720

Smartphone

KRW 72,000

EUR 49

LTE/3G

5 GB

NA

450 min

LTE-850 LTE-1000

Smartphone Smartphone

KRW 85,000 KRW 100,000

EUR 57 EUR 68

LTE/3G LTE/3G

7 GB 10 GB

NA NA

650 min 1,050 min

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Data cap

Overage cost

Voice

36

White Paper LTE 2013

4.2.3.

Hong Kong CSL CSL launched a commercial dual standard DC-HSPA+/LTE FDD network in November 2010 targeted at corporate users. It was only in May 2011 that the mobile network operator made its service available to consumers with its 1010 high-end brand. Only an USB modem and an LTE pocket WiFi are available at present but it will launch the HTC Velocity 4G in the near future. Current HSPA+ users were given the opportunity to upgrade their plans to benefit from the LTE additional speed. For the moment, only existing customers with a 1010 (a CSL brand) can benefit from those LTE services, due to the lack of USB dongles available to support CSL LTE band (1800 MHz and 2600 MHz). In August 2011, CSL launched LTE services for its one2free brand as well as for its 1010 brand. CSL now offers LTE for new sign-ups. CSL is one of the rare operators to provide genuinely unlimited data plans. One2Free plans: Mobile service license and administration fee of HKD12/month applies. One2Free & 1010 plans: Subscription for a minimum contract period of 24 months. Table 21:

CSL LTE data plans

Plan

Monthly fees (HKD)

Data cap

Overage fees

HKD 249

Monthly fees (EUR) EUR 24

1010

1 GB

HKD 99 per GB

1010

HKD 349

EUR 34

5 GB

HKD 99 per GB

1010 One2Free Xtreme Plan

HKD 459 HKD 187

EUR 45 EUR 18

Unlimited 1 GB

HKD 99 per GB

HKD 287

EUR 28

5 GB

HKD 99 per GB

HKD 387 HKD 87

EUR 38 EUR 8

Unlimited 1 GB

HKD 1 per MB

HKD 187

EUR 18

5 GB

HKD 1 per MB

HKD 287

EUR 28

Unlimited

-

One2Free Xcite Plan (Speed limited to 7 Mbps )

Comments

Capped at HKD 498 Capped at HKD 498 Capped at HKD 498 Capped at HKD 498 Capped at HKD 398 Capped at HKD 298

Source: CSL

4.3.

Europe

4.3.1.

Germany Vodafone and T-Mobile were the first mobile operators in Europe to use the digital dividend (800 MHz) for their LTE networks in 2010.

Vodafone In September 2010, Vodafone announced LTE pricing models for its future ‘LTE at home’ (‘Zu Hause’) service. Known formally as ‘Internet Vodafone LTE Zuhause’, the service offers broadband access of 7.2 Mbps downstream for EUR 39.99 per month with a cap of 10 GB. For an extra EUR 10 per month, customers can get 21.6 Mbps and a cap of 15 GB per month. For a downlink speed of 50 Mbps and 30 GB cap, the monthly cost will be EUR 69.99. When the monthly cap is reached by the user, ‘throttling’ is activated: the download speed is automatically reduced to ‘UMTS levels (384 kb/s)’/ These LTE rates are lowered by EUR 10 a month for existing Vodafone post-paid customers. The service offers the same data allowance with EUR 10 more.

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White Paper LTE 2013

To get more subscribers to sign for its LTE service, the recommended switch to Turbo Internet is now being rewarded. Earlier in the year, Vodafone had been offering a heavilydiscounted rate to customers who signed up for its LTE by the end of April 2011. There are three services: the LTE home Internet S, the LTE home Internet and the LTE home Phone and Internet. Each offers four different monthly Internet flat rates: a 5 GB rate for EUR 19.99; one of 10 GB for EUR 29.99; a 15 GB rate for EUR 39.99; and then 30 GB for EUR 59.99. These rates are available for the first three months with a two-year contract. In addition to the legal requirement for Vodafone to deploy services in low-density areas in the 800 MHz, Vodafone sees in those new broadband fixed wireless accesses the opportunity to reduce its reliance on the DSL infrastructure of the incumbent Deutsche Telekom. Table 22:

Vodafone Mobile Internet with LTE

Plan Mobile Internet flat 50

Monthly rate EUR 65

Network LTE

Data cap 20 GB

Device Dongle

Mobile Internet flat 21.6

EUR 45

Includes use of LTE

10 GB

Dongle

Mobile Internet flat 14.4

EUR 35

Includes use of LTE

7.5 GB

Dongle

Source: Vodafone

In February 2012, Vodafone introduced its first smartphone. The associated price plan involves a EUR 10 premium for using the service as part of its two most expensive data packages corresponding to the 20 Mbps or 50 Mbps download speed.

T-Mobile The LTE Internet package ‘Call & Surf Comfort via Funk’ is available for EUR 39.95 per month, with a one-time set-up fee of EUR 59.95. The ‘Call & Surf Comfort via Funk Universal’ with ISDN features will cost EUR 43.95 per month. The package includes a broadband Internet connection via LTE or HSPA+ depending on the region the customer lives in – with data transfer speeds of up to 3 Mbps (download) and up to 500 Kbps (upload) and a fixed telephony line. Customers can use the LTE network with an LTE-enabled mobile device, the Telekom Speed stick LTE offered at EUR 5 with the ‘Web’n’walk’ Connect XXL plan at EUR 75 with speed up to 100 Mbps.

4.3.2.

Austria A1 Telekom Austria has launched its LTE commercial service in Vienna in the 2.6 GHz band, offering customers 40 GB of data at speeds of up to 150 Mbps for EUR 90 per month.

4.3.3.

Sweden TeliaSonera TeliaSonera launched its commercial LTE network in Sweden in December 2009, promoting its LTE service at a very attractive price for a limited period. Up until 1 July 2010, the 4G cost only SEK 4 (EUR 0.41) per month in an introductory offer which included 4G and 3G modem. At the time of launch, subscribers had a 4G modem that only handled the 4G traffic. In June 2010, TeliaSonera introduced dual-mode modems which also operate on the 3G network. From July 1 2010 onwards, the package cost SEK 599 (EUR 62) per month including the monthly use of 30 GB data. During the summer of 2010, a special rate of SEK 359 (EUR 39) was on offer for a 6-month period. In this package, additional data volume cost SEK 80 (EUR 8.70) per 2 GB and SEK 119 (EUR 12.90) for 5 GB. The modem was paid for separately (SEK 3,495 or EUR 379). In January 2011, TeliaSonera started selling the world’s first laptop with 4G embedded in Sweden. The laptop is a Samsung X430 and the modem inside is 4G/3G/2G compatible.

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White Paper LTE 2013

The price of the laptop is SEK 4, 800 for users willing to sign a 24-month contract. In addition to that, consumers have to pay for the LTE subscription. It offers the Samsung Galaxy Tab LTE 8.9. Table 23:

Telia rates

Name and scope of rate plan Mellan 4G (‘Intermediate 4G’) Stor 4G (‘Grand 4G’) Total 4G (‘Total 4G’)

Speed/‘Surfzone’ hotspot speed Up till 20 Mbps Up till 40 Mbps

USB-modem (for contract of 24 months) Included Included Included

Data volume

Monthly rate (SEK)

Monthly rate (EUR)

10 GB

SEK 249

EUR 28

20 GB 30 GB

SEK 349 SEK 499

EUR 39 EUR 56

Source: Telia Sweden

Tele2 It was in November 2010 that Tele2 launched its commercial LTE network in four cities in Sweden, offering fast broadband speeds of up to 80 Mbps. ‘Mobil broadband XL’ is available for SEK 229 (EUR 26) and includes an LTE modem which can support download speeds of 100 Mbps and 50 Mbps upload, whilst the network is configured for 80 Mbps down and 40 Mbps up. The four launch cities were Stockholm, Gothenburg, Malmö and Karlskrona, with a further 11 planned by March 2011 and has planned to reach 100 new locations at the end of 2011.

Telenor Telenor launched its commercial LTE network with the 4G large service for SEK 549. It now costs SEK 349 (EUR 39) per month which includes an LTE modem (the D-link DWR 923) with no, thus, unlimited data cap. Telenor launched another service named the 4G medium for SEK 399 per month for 20 GB (Huawei b683 3G router) It also offers the ‘Mobile broadband 4G 80’: SEK 299 (EUR 34) a month for 20GB and speeds of up to 80 Mbps with a two-year contract, and an alternative ‘Mobile broadband 4G 80 Free Surf’: SEK 399 (EUR 45) a month with no data cap and speeds of up to 80 Mbps.

4.3.4.

Norway TeliaSonera TeliaSonera launched its commercial LTE network in Norway in December 2009. Until 1 April 2010, access to the 4G network cost NOK 1 (EUR 0.13) per month, in an introductory offer period. This package included 4G and 3G modems. At the time of the launch, nonetheless, subscribers only had a 4G modem that handled LTE traffic. Customers pay a fixed monthly fee and can either choose to buy the new modem which handles 2G, 3G and 4G or subscribe with a SIM alone that can be used in a PC that supports this. The range of speeds attained depends on the area in question. Table 24: Country Norway

Telia Norway LTE rates Monthly fee (NOK)

Monthly fee (EUR)

Data cap

Speed (downlink)

Modem

NOK 399

EUR 52

15 GB

10-20 Mbps

NOK 199

NOK 499

EUR 65

30 GB

10-80 Mbps

NOK 1

Source: Telia

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White Paper LTE 2013

4.3.5.

Finland In Finland, Sonera launched its commercial LTE network in December 2010. It was the first commercial LTE service in Finland. The service was started in Turku and Helsinki using the 2.6 GHz band. Named ‘Sonera Full Net 4G’, the service cost EUR 46 per month including a 4G modem that supports also 3G and 2G. Table 25:

Sonera rates – Finland

Country

Monthly fee

Data cap

Speed

Finland

EUR 46

30 GB

10-80 Mbps

Device price Included (EUR 9)

Source: Sonera

Elisa has also launched an LTE service in Finland in December 2010 for businesses and in November 2011 for consumers. It plans to reach 100 cities by the end of 2012. It offers a monthly plan at EUR 39.90 a month with a USB stick for a monthly EUR 4.

4.3.6.

Denmark TeliaSonera TeliaSonera launched its LTE network in Denmark, in December 2010. The network uses the 2.6 GHz band and, at the time of its launch, it covered Copenhagen, Aarhus, Odense and Aalborg, all cities where there is high demand for fast mobile broadband services. At present, 60 per cent of Danes have access to LTE. In the 4G Premium4life plan, customers can choose between two LTE dongles or buy both for DKK 799 (EUR 143). Table 26:

TeliaSonera rates – Denmark

Plan

Monthly fee

Data cap

Speed

Device price

Premium4life

EUR 53 (DKK 299)

30 GB

Up to 80 Mbps (Expected 10-80 Mbps)

2 devices EUR 68/ EUR 232 (DKK 499/ DKK 1,299)

Full4life

EUR 35 (DKK 199)

10 GB

Up to 20 Mbps (Expected 10-20 Mbps)

1 device EUR 68 (DKK 499)

Source: TeliaSonera

TDC The TDC operator launched its LTE service in October 2011 in Copenhagen, Aarhus, Odense, Aalborg, Esbjerg, Randers, Kolding, Horsens, Vejle and Roskilde. It offers an LTE data plan at DKK 399 (EUR 71) a month for 25 GB with an USB stick at DKK 499 (EUR 68).

4.4.

Comparison The LTE tariffs of various mobile operators are summarised in the table below. They show interesting differences in terms of cost per Gigabyte of data allocation for the user:  There are huge differences between countries as dongle LTE data plans range from EUR 1.9 per GB in Sweden to EUR 12.8 per GB in Japan.  Overall the highest data plan is in South Korea with KT billing EUR 13.9 per GB for smartphone usage on its LTE network.

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White Paper LTE 2013

Table 27: Device type

LTE tariffs comparison Operator

Country

Plan

AT&T NTT DoCoMo TeliaSonera TeliaSonera TeliaSonera VZW VZW

USA Japan Sweden Sweden Sweden USA USA

DataConnect for 4G LTE

Monthly cap (GB)

Monthly cost (national currency)

Monthly cost (€)

Bundled with voice & SMS

€/GB

5 5 10 20 30 5 10

50 6510 249 349 499 50 80

37.8 64.0 28.3 39.6 56.6 37.8 60.5

No No No No No No No

7.6 12.8 2.8 2.0 1.9 7.6 6.0

2 5 10 4 7 12 3 5 3 5 7 10

30 50 80 50 70 100 30 50 62 000 72 000 85 000 100 000

22.7 37.8 60.5 37.8 52.9 75.6 22.7 37.8 41.6 48.3 57.0 67.1

No No No No No No No No Yes Yes Yes Yes

11.3 7.6 6.0 9.4 7.6 6.3 7.6 7.6 13.9 9.7 8.1 6.7

2 5 10 3 5

30 50 80 35 50

22.7 37.8 60.5 26.4 37.8

No No No No No

11.3 7.6 6.0 8.8 7.6

Dongles Xi Data Plan Mellan 4G Stor 4G Total 4G 4G Mobile broadband plan 4G Mobile broadband plan

Smartphones VZW VZW VZW VZW VZW VZW AT&T AT&T KT KT KT KT

4G Mobile broadband plan (NT) USA 4G Mobile broadband plan (NT) USA 4G Mobile broadband plan (NT) USA 4G Mobile broadband plan (T) USA 4G Mobile broadband plan (T) USA 4G Mobile broadband plan (T) USA Data Connect for 4G LTE USA Data Connect for 4G LTE USA LTE-620 South Korea LTE-720 South Korea LTE-850 South Korea LTE-1000 South Korea

Tablets VZW VZW VZW AT&T AT&T

USA USA USA USA USA

4G Mobile broadband plan 4G Mobile broadband plan 4G Mobile broadband plan Data Connect for 4G LTE Data Connect for 4G LTE

Legend: T: Tethering - NT: No tethering

Source: IDATE

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White Paper LTE 2013

5.

Next Gen Mobile devices The introduction of the iPhone by Apple in 2007 was a revolution in the telecommunication industry but not in the sense that most people attach to the word “revolution”. The device itself did not come with a single totally revolutionary technology, but it just came with a new approach to answering basic needs of people, based on a combination of innovative (but not new) technologies. At the time, many industry insiders undermined (and underestimated) the innovation that it represented but its approach has proven to be game-changing. Since then much has changed in the industry… in terms of usages, of course, but also in terms of competition, of business model… Previously almighty, operators have seen their walled garden opened up and their position in the value chain completely turned upside down with new players coming from outside the industry claiming new shares of revenue on previously operator-driven services. In the mobile device industry itself, old (and legacy) players have seen their position threatened and have been forced to build partnership and alliances. The platform economy has progressively replaced the previous network-based economy giving device manufacturers the ability to compete more easily with the self-established leader but, paradoxically, decreasing differentiation opportunities. Devices sales ('000) Total Tablet market Total Phone market of which smartphone market % share of smartphone

2011

2012

2013

2014

2015

2016

CAGR

46,742

72,937

105,119

137,935

172,056

197,864

53%

1,542,706

1,664,213

1,785,334

1,894,505

2,006,707

2,108,299

7%

471,300

587,939

749,813

906,478

1,062,028

1,216,615

30%

30.6%

35.3%

42.0%

47.8%

52.9%

57.7%

Source: IDATE

Key lessons  Smartphones have radically changed the mobile industry and helped our network-based economy to move to a platform-based one. Accounting for only 31% of all smartphone sales in 2011, they will account for 58% of total sales of mobile phones in volume in 2016. In absolute value, 1.2 billion smartphone units will be sold in 2016 as compared to 471 million in 2011. Meanwhile, the feature phone as we know them will be gradually replaced by low-cost smartphones with basic functionalities in emerging countries  For many tasks, laptop computers will be replaced by mobile devices such as the tablet. The fact that, for the first time, the installed base of mobile phones outgrew the PC installed base is, in this respect, a clear indication that we have entered the post-PC era.  While technology such as GPS, Bluetooth, WiFi have historically been separately implemented in mobile devices with clearly identified functionalities, they will more and more be combined together to provide much more evolved services. Innovation will primarily come from an infinite combination of technologies thought up by third-party players taking part in the platform economy rather than inspired only by official players.

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White Paper LTE 2013

 For what pertains to innovation and technological development in the mobile industry, the following trends have been identified: 

LTE is currently driving competition in the US and worldwide as chipsets are improving and networks are being rolled out worldwide (US, Canada, South Korea, Japan, Germany, and Norway). While initial devices were primarily targeting the US market, the ecosystem is slowly starting to mature outside band 13. In the mid-term, the increased number of frequency bands to be supported will be an obstacle to the development of devices able to operate on all networks.



Augmented reality, the Internet of things and social networking are deeply linked and will be increasingly used in daily life. The ability of objects to communicate and actively or passively identify themselves will enable a greater interactivity between real life and social networks. Augmented reality will be improved by a better recognition of objects while sensors, in relation with geolocation technologies (indoor and outdoor), will enable a better service contextualisation.



Cloud services will make mobile devices more independent of computers and allow an ecosystem to grow around smartphone devices communicating with ever more numerous smart objects such as watches and televisions as well as non-smart ones such as sensors and NFC tags. Application and contents will be available for consumption whatever the devices and will remain synchronised in the cloud.



Artificial Intelligence as well as gesture recognition and interpretation will foster the development of natural user interfaces and the dissolution of user interface elements in favour of intuitive and direct contacts between the user and the content. The dissolution of technology in our daily life is a sign that a technology has been successful.

 As far as evolution in form factors are concerned, the following trends have been identified: 

Reductions in component size will enable more components (and functionalities) to be embedded while staying more or less with the same size and weight. Battery life will remain similar in absolute terms in the years ahead but will be improved in relative terms (as compared to the amount of services and functionalities provided)



Maximum screen size will not change significantly but devices within their categories will have a broader range of sizes to match with different price ranges. Innovation in the display will be achieved through increased resolution and connectivity. More and more functions (of which display) will be deported and the cloud will be central in the interface between mobile devices. Deported functionalities will use either larger equipment such as connected televisions in the home, or even more mobile and flexible devices such as smart watches or other wearable devices.



Wearable devices will be part of the digital ecosystem thanks to even thinner screen with bending capabilities and Body Area Network Radio technologies. The development of wearable non-smart ‘devices’ will contribute together with the advent of new smart objects to the deportation of even more functions outside of the smartphone. In this ecosystem the smartphone will, however, remain the leading processing unit.



As a matter of course, devices will progressively become water- and dust- resistant at least to a minimum extent. This is a natural evolution for devices that follow us in our everyday life, indoor but also outdoor. Such devices have already hit the market but currently remain niche products. Changes in the manufacturing process could easily make them more resistant to the minor dangers of daily life such as sand or rain.



Together with this trend, wireless (but not contactless) charging capabilities will gradually penetrate mobile devices provided that wireless-charging infrastructures become available. Otherwise this will remain an option for higher-end devices

 From an economic point of view, the following trends will be observed 

Miniaturisation of components and economies of scale will make possible a typical dissemination of innovations and technologies amongst the broad population with Next Generation Devices replacing actual high-end devices, and high-end devices becoming mid-range products, thus reaching a greater share of the population and with mid-range devices progressively replacing low-end devices.

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White Paper LTE 2013



The increasing availability of sensors in our devices might fuel an even more important amount of data from the field to servers where aggregated information will improve service contextualisation, precision and cleverness. Artificial intelligence systems will automatically learn from user interactions and improve device capabilities. Although the capacity of the infrastructure to handle this increase in data availability is unsure, crowdsourcing should be used outside of geolocation usages and may see new business model emerge where customers could sell or barter the transmission of these data.



In the short to mid-term, we should see the development of platforms-inside-theplatform because of differentiation issues for mobile device manufacturers. This is especially true of Android with Amazon on the tablet market but also with Samsung and HTC and increasing replacement of Google services with their own services (cloud services, content and application). In the mid-term, this cast doubts on how long the Android platform will remain open. Meanwhile, Mobile Web can be expected grow as a cross-platform platform.



Given the sensitiveness of data privacy and the possible abuse of power that could result for some players through platform fragmentation and consolidation, we believe that both competition watchdogs and data privacy protection authorities will remain watchful of player practices.



Because of the emergence of tiered pricing and the probable end of flat rate data plan in the wake of the Net Neutrality debate, we also believe that VoIP, tethering and other Over-The-Top services will be increasingly allowed by operators, transforming the network into a true platform with managed connectivity (Quality of service) and other services such as identification or billing provided to third parties.



Meanwhile, and because of the emergence of tethering usages, the user will increasingly share their smartphone data connection with their other own connected devices. This makes sense both technically and financially speaking. This trend – we call it ‘People as a Gateway’ (PaaG) – will grow in parallel to the development of M2M connectivity for devices supplying critical services such as emergency services. In this configuration, connectivity will be directly supplied by network operators to the device manufacturer.

 In order to attain mainstream usage patterns and not only niche usages, both technical and financial challenges will need to be overcome: 

Battery life is probably the highest barrier to the development of this usage. This challenge will be solved by an optimisation of the component consumption, the increase in energy density in the battery and the use of new energies such as photovoltaic or kinetic energy



Fragmentation is looming large with ever more frequencies to be supported by devices, with software environment fragmentation and with both hardware and distribution platform fragmentation



Patents will become even more important in the mobile device industry in the years ahead. Normally used to protect (and foster) innovation, they might well become an obstacle. Given the existence of both essential and non-essential patents, it is essential that patent offices and standards institutes intervene to state which patents have the potential of blocking innovation and should be licensed and, on the other hand, which patents can remain unlicensed and thus prompt other companies to find their own way to provide the same service/functionality.



Mobile devices are useless without network operators. Although device manufacturers have partly grown as direct competitors to operators with the development of their app stores and other Over-The-Top services such as messaging or VoIP services, they will still be partners because of the different key competences required by each job. The interest for mobile device manufacturers to become their own operator, even virtually, will remain limited.

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