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Long Term Evolution (LTE) is a key buzz word in the mobile networks sector, but little has been written
about the opportunities and challenges that are brought forward by this new technology. This paper aims
to provide a snapshot of the likely changes it will bring to telecom operators and the mobile internet
service providers businesses. The paper shall also look at the adoption of LTE network worldwide via the
growth of 3G subscriber base from now until 2013. Asia Pacific seems to lead this growth with India and
China expected to be the major contributors. This paper also draws attention to two case studies, that of
TeliaSonera and Verizon Wireless of their successful deployment of the LTE network. The paper shall also
define LTE, in comparison to WiMAX.
LTE Business Readiness
2
Contents
LTE global outlook and forecast Page 3
Case studies: Assessment of LTE success globally Page 17
What is LTE? Page 3
TeliaSonera: How diferent is the usage of LTE from 3G Page 17
LTE adoption & its challenges Page 13
Who are the early adopters of LTE? Page 6
Mobile data trafc by devices Page 17
So how is it diferent from WiMAX? Page 3
Verizon Wireless: Leveraging on the dynamic eco-system of LTE Page 20
Forecast data for number of 3G subscribers by region Page 16
Ingredients to increase ARPU Opportunity for Network Operators Page 7
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II
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3
7
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2
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3
LTE Global Outlook and Forecast
So how is it different
from WiMAX ?
Mobile Networks continue to grow at an exciting pace. There are 6 billion mobile phone subscriptions
in the world, with 1.2 billion of them using mobile internet. Today, one in five mobile phone subscribers
have access to fast mobile internet service (3G or better). Consumer demands for advanced services and
more connected lifestyles is pushing the mobile telecom industry to come up with technical solutions that
enable network operators to meet this demand of consumers. Working on the same lines, 3rd Generation
Partnership Project (3GPP) came up with a standard called Long Term Evolution (LTE).
What is LTE ?
Simply put, LTE is just another way to give enhanced data speed and new services to consumers. LTE
does this by creating a new radio access network named Evolved UMTS Terrestrial Radio
Access Network (E-UTRAN), which supports all IP-based traffic. LTE has a new packet
core network called System Evolution (SAE), which will support E-UTRAN. Together,
these two will help network operators improve end-user throughputs, sector capacity,
reduce user plane latency and better multipath, mobility and power performance.
3GPP has set aggressive performance targets for LTE. It is relying on technologies like
Multiple-Input Multiple-Output system (MIMO), Orthogonal Frequency Division
Multiplexing (OFDM) & smart antennas to achieve these targets. One of the main
objectives of LTE is to minimize complexities in existing system infrastructure
and offer operators a simple upgrade path from current 3G networks.
LTE is developed by 3GPP, while WiMAX is a product of IEEE. LTE
and WiMAX, though are different technological standards,
yet posses many similarities. One cannot call them siblings,
but calling them blood-related would not be too wrong.
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5
- Regional LTE Product Line Manager at Alcatel-Lucent (Malaysia)
LTE will help telecom operators to give better data
usage experience to customers. In HSPA+ you have a
speed of maximum 42Mbit/sec per cell to be shared
by all subscribers connected to that cell but LTE gives
maximum of 300Mbit/sec per cell
Here is a brief comparison between two:
Speed:
LTE can achieve 300 Mbit/s on downlink & 75
Mbit/s on uplink. Whereas, WiMAX can give 128
Mbit/s on downlink & 56 Mbit/s on uplink.
Latency:
There is a good difference between latency of
these two technologies. Latency rate for LTE is
10ms while for WiMAX it is 50ms. Low latency
rate is important for real-time multimedia
services like online gaming & conferences as the
signal must arrive at the destination as soon as
possible
Roaming:
LTE provides roaming on all 3GPP networks.
However, roaming is not very easy to achieve
through WiMAX. This point is important for
network operators as International roaming
contributes substantially to their revenues
and also provides convenience to their
consumers.
SIM Card:
LTE, like GSM requires SIM card to operate.
WiMAX does not require a SIM card. Looking
at the popularity of GSM networks, it sure is a
disadvantage for WiMAX.
Power Consumption:
LTE uses SC-FDMA modulation in uplink
channels, hence requires less power than
WiMAX. This results in longer battery time of
mobile device for LTE.
LTE WIMAX
Speed
Latency
Modulation
MIMO
FDD/TDD
Mobility
300 Mbit/s Downlink
75 Mbit/s Uplink
10ms
OFDMA (downlink)
SC-FDMA (uplink)
Yes
FDD for full duplex on two 5 MHz channels
Operates with a target up to 350 km/h
128 Mbit/s Downlink
56 Mbit/s Uplink
50ms
OFDMA (downlink)
OFDMA (uplink)
Yes
TDD for half duplex on one 10 MHz channels
Operates with a target up to 120 km/h
6
Worldwide LTE adoption
(chosen countries)
Who are the early adopters of LTE ?
Norway - TeliaSonera
Poland - Mobyland and CenterNet
Austria - Mobilkom Austria
Sweden - TeliaSonera
USA - MetroPCS
Source: Solidiance Analysis
Armenia - Vivacell-MTS
Singapore - M1 Saudi Arabia - Zain
Singapore - SingTel
Philippines - Smart Communications
Saudi Arabia - STC
Saudi Arabia - Mobily
Uzbekistan - MTS
Uzbekistan - UCell
Hong Kong - CSL
India - Bharti Aritel
Srilanka - Dialog Axiata
Japan - NTT DoCoMo
Korea - SK Telecom
Korea - LG Uplus
Launched Dec 15 2009
Launched Sept 7 2010
Launched Oct 19 2010
Launched Dec 15 2009
Launched Sept 21 2010
Launched Dec 20 2010
Launched Jun 20 2011 Launched Sept 21 2011
Launched Dec 20 2011
Launched Apr 16 2011
Launched Sept 22 2011
Launched Sept 24 2011
Launched Jul 28 2010
Launched Aug 2010
Launched Nov 25 2010
Launched Apr 10 2012
Launched May 7 2011
Launched Dec 25 2010
Launched Jul 1 2011
Launched Jul 1 2011
TeliaSonera was the first operator to launch commercial LTE service in the two Scandinavian countries
Norway & Sweden. 15 new operators were added to this list in 2010, 31 in 2011 and other 9 launched LTE
services in the beginning of 2012. LTE is fast becoming a global standard and Asian operators are certainly
not going to watch the party from outside, CSL Hong Kong and NTT Docomo have already launched their
LTE services. Middle Eastern operator are also picking up pace in launching LTE.
7
Computing Device Sales 2011
Smart Device boom:
Non-PC devices are replacing PC devices at a fast rate. Consumers want everything to be mobile as
manufacturers are providing them with devices that can handle high amount of data transfer while
they are on a move. Devices like iPhone and Blackberry are already a phenomenon in major Asian
cities like Singapore and Jakarta which implies that users are tech savvy and will be willing to adopt LTE
devices in future
Ingredients to increase ARPU Opportunity for
Network Operators
- LTE Project Manager, ZTE (Hong Kong)
LTE is the new GSM, it is the sort of standard we were
waiting for. It is technologically advance and much
more stable than WiMAX, it provides similar mobility
as GSM and enables quick updates to its system
46%
Smartphones
Laptops
Desktops
Tablets
Netbooks
25%
18%
6%
5%
Source: Solidiance Analysis
8
Usage of mobile devices as a primary internet device is also increasing in Asia. 44% of mobile web users
in Indonesia never use internet on desktop PCs. Other prominent countries in this category are India,
Thailand and China. Users are opting for either smart phones or laptops/net books to meet their web
needs.
70% Egypt
59% India
57% South Africa
55% Ghana
54% Kenya
50% Nigeria
44% Indonesia
32% Thailand
30% China
25% USA
Percentage of mobile Web users who never or infrequently use the desktop Web (2011)
Source: Solidiance Analysis
9
Source: Portio Research
Cloud computing & Software as a Service:
It is already becoming the talk of the town as network hosted information and applications allow
subscribers to upload and download data at ease from anywhere. Network operators can build an eco-
system around this and use software as a Service.
Leveraging on Web 2.0:
LTE allows network operators to leverage on the applications and services provided by web 2.0 to serve
their consumers with personalized products.
Automatic initiation of Multiple, simultaneous sessions:
Mobile browsers can initiate multiple, simultaneous connections from the device, to the network, to
download security updates, refresh local mini-databases, and enable applications. This gives more
control to networks to personalize content for users.
Data usage on a high in Asian markets
Data is fast replacing voice and SMS as the major contributor to ARPU for network operators in Asia.
Market is led by Philippines and Japan, closely followed by Korea and Singapore. So, there is a fast
growing need in Asian markets for enhanced data speed and new services.
Top five operators in the world by proportion of
revenues derived from data (2011)
Smart Philippines
Philippines
Japan
Japan
Japan
Globe
SoftBank
NTT Docomo
KDDI
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- Praneet Mehrotra - Prinicipal, Solidiance Asia Pacifc
With the inception of 3G, India is witnessing a change in
the telecom spectrum and LTE would be a logical next
step for the market. Local Indian handset manufacturers
along with a wide array of mobile software companies
would give LTE a perfect platform to launch
Usage of mobile devices as a primary internet device is also increasing in Asia. 44% of mobile web users
in Indonesia never use internet on desktop PCs. Other prominent countries in this category are India,
Thailand and China. Users are opting for either smart phones or laptops/net books to meet their web
needs.
32.6
%
42.1
%
37.9
%
46.3
%
34.6
%
19.1
%
20
%
34.1
%
33.7
%
32.2
% 27.4
%
31.5
%
41.1
%
38.3
%
29.1
%
Japan
Pakistan India
Korea China
Mobile Internet time at home
Mobile Internet time at Work
Mobile Internet time on the go
Source: ITU
Percentage of mobile
internet usage in some
Asian countries (2011)
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Mobile behaviour in Japan, United States and EU5 (UK, Germany, France,
Spain & Italy) - 2010. Percent of total mobile audience (Age 13+)
- Regional LTE Product Line Manager at Alcatel-Lucent (Malaysia)
Source: Portio Research
A comparison of mobile usage behaviour amongst Japan, US and 5 European countries reveal that
Japanese users at an average use more data services than users of any other country used in this
comparison. Japan has always been a benchmark in mobile technology in Asia and like Japan, if other
Asian countries start to provide high data speed to customers, their ARPU from data would substantially
rise.
Japan USA Europe
Used Browser
Used Applications
Instant Messaging
Email
Retail Site
Classifieds
Travel Service
Maps
Traffic reports
Weather news
Bank Accounts
Financial News
Social networking
or blog
Watched TV and/or
video
Played Games
Accessed social media/entertainment
Accessed Financial Services
Accessed Retail/Travel/Weather
59.3%
42.3%
3.3%
54.0%
7.2%
4.2%
3.3%
15.7%
12.6%
34.1%
8%
16.1%
17.0%
22.0%
16.3%
59.3%
42.3%
3.3%
54.0%
5.5%
6.6%
4.7%
16.0%
8.2%
22.3%
9.4%
10.0%
21.4%
4.8%
22.5%
59.3%
42.3%
3.3%
54.0%
4.1%
4.2%
4.1%
10.8%
5.9%
13.7%
7.1%
7.2%
14.7%
5.4%
24.1%
Cost per Mb on LTE is much lower for telecom operator as
compared to WiMax or 3G
13
Spectrum Harmonization:
One of the key benefits of GSM networks has been seamless roaming across countries
and continents, largely because of harmonized spectrum spanning large parts of the
world. LTE infrastructure is being designed to operate in different spectrum bands
of different sizes, however, ranging from 1.25 MHz to 20 MHz. To truly support
seamless global roaming, harmonized spectrum will be needed otherwise the
burden is shifted to terminals e.g., handsets or mobile devices to support
multiple frequency bands, which adds time, expense, complexity and
inefficiency to the equation.
In US, 700 MHz band has already been auctioned for LTE. However,
European countries are trying to free 800 MHz band for LTE. One other
option is 2.6 GHz band and it can serve as harmonized spectrum.
However, there are a couple of important attributes to the 2.6 GHz
frequency band. First, relatively poor propagation characteristics
will significantly impact indoor coverage, an issue already quite
visible in the 3G HSPA networks deployed in the 2.1 GHz band.
Second, poor propagation characteristics also translate
into smaller cell radius, hence the need for more cells,
which adds expense and complexity. Lastly and most
importantly, frequency has a direct impact on network
costs, as both op-ex and cap-ex increase significantly
with higher frequency.
LTE adoption & its challenges
- Regional LTE Product Line Manager at Alcatel-Lucent (Malaysia)
In Asia, most probably we will use 2.6 GHz band. It has its advantages and
disadvantages, on the up-side governments will have a wider bandwidth to
offer to operators as compared to 800MHz or 900MHz band so operators
can make use of full capacity of LTE. However, a higher frequency means
poor coverage, so operators will have to invest more in cell sites
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Voice over LTE:
In LTE, most of the standardization work has
been focused on the data aspects and voice has
been somewhat neglected. Different operators
are giving different priority to this issue; in fact,
some of the early adopters are looking at data-
only services for their initial LTE network rollouts.
Clearly, the full op-ex and cap-ex benefits of LTE
can only be realized when all traffic types are
carried over a single, unified core. The issue of
standardization of voice over LTE gets even more
complicated when we bring into the mix the
interlocking of LTE with different types of legacy
networks including GSM, HSPA, CDMA2000,
WiMAX and Wi-Fi.
Devices & Terminals:
One of the key aspects to look into is the availability
of devices for LTE. When will they be available?
How would they look like? Would they support
other technologies (GSM, CDMA,
3G) as well? Network operators
might start their service with data
cards and dongles but the advent of
LTE smartphone will change the whole
landscape of LTE adoption.
Many carriers are not rolling out LTE
nationwide in their domains so for an LTE
device to have the ability to drop back to
another technology network is also a must.
LTE devices need to support Multiple Input/
Multiple Output (MIMO) in order to deliver
high data rates but this directly increases a
devices complexity. One of the interesting
things to watch will be whether the initial
devices will support only 2x2 MIMO or
whether some vendors will launch devices
supporting 4x4 MIMO from the start. This
choice is directly related to battery life, and
while data cards and dongles might get
enough juice from their hosting laptops and
netbooks but smart phone designers have
critical design challenges in front of them in
terms of balancing battery life with MIMO
support.
Consumers expectation management:
Consumers have traditionally been paying
little amount of money for their data plans
as many operators have followed the flat
rate business model. It is yet to be seen how
network operators will be able to charge
premium prices to customer for LTE usage.
AT&T in US claims that iPhone drives 30
times more traffic than average feature
phones but looking at ARPU we find iPhone
15
users are not even paying 3 times more than an
average feature phone user.
Co-existence of 2G, 3G and LTE networks:
Network operators can not shut down their
existing networks as they have a huge subscriber
base on legacy networks. The challenge is how to
manage multiple networks? Operators currently
enjoy significant roaming revenues from their
GSM networks. Parting from this high margin
revenue stream is not going to be easy. The issue
also ties to spectrum re-farming, which is
expensive. Switching off GSM networks would
enable operators to re-farm that spectrum,
but there are many strict regulations around
this spectrum in different countries including
complete nationwide coverage requirements.
Alternatively, operators might consider
keeping their 2G networks going for a while
and switch off their 3G networks first and
migrate those 3G users to LTE.
Asia Pascific
40%
19%
10%
10%
9%
7%
5%
Western Europe
US & Canada
Latin America
Eastern Europe
Africa
Middle East
Forecast data for number of 3G
subscribers by region
Asia Pacific will lead the growth in 3G subscriber base in coming years. India and China will be the
major contributors.
Projected number of 3G subscribers 2013
Source: Solidiance Analysis
16
Source: Solidiance Analysis
97%
92%
82%
73%
71%
69%
58%
56%
Japan
Singapore
South Korea
Portugal
Australia
Sweden
Canada
USA
Top countries - 3G Penetration 2011
- ex-Network Strategist , Telia Sonera Sweden
Subscriber response has been really good for LTE services. It is not a
cheap service but it sure does help network operators to catch the
top-tier or the most profitable group of customers. LTE will remain to
be seen as a premium service and customers will be willing to pay high
price for it at least for 2 more years
17
1500000
2009
Laptops & other Mobile-Ready Portables
Smartphones
Home Gateways
Non-Smartphones
2010
2011
2012
2013
3000000
Case Study: TeliaSonera How different is the usage of LTE from 3G?
TeliaSonera was the first operator in the world to deploy LTE, and launched LTE
services commercially to customers in Norway and Sweden on 15 December 2009.
A survey conducted by TeliaSonera on its customers habits on their first 100
days of using LTE showed a marked difference in the usage patterns and data
consumptions of LTE users, compared to 3G users. The average smartphone
user consumes about 375 MB of data a month, but users of LTE consume 15
GB a month. This is equivalent to the amount consumed by the typical
wired broadband user, which is 14.9 GB a month according to Cisco.
TeliaSoneras LTE users have been taking advantage of the enhanced
speed of LTE, which is ten times the speed of a typical 3G connection.
A survey of the networks LTE users found
54 percent would not consider returning to 3G at present
46 percent surf the web more frequently when away
from home
26 percent say they are working more on a mobile
basis
23 percent say they are downloading larger files to
a greater extent than previously
Mobile data traffic by devices
Case study: Assessment of LTE success globally
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16 percent say they began surfing more after the introduction of LTE
23 percent say they watch more online TV
28 percent listen to more Web radio and music services like Spotify
12 percent have increased their online gaming frequency
According to TeliaSoneras CTO of mobility services, Lars Klasson, streaming video is a
significant contributor to the new traffic on the network as more people are using the fast LTE
connection to watch streamed TV channels, with some even using their laptops at home as a
second TV
The rapid overall growth in demand for data has led to a surge in TeliaSoneras mobile data revenues
in the Nordic region, leading to an increase in 2010 Q4 profits by 8 per cent to US$818m
TeliaSonera LTE Pricing and Availability
After an initial grace period where TeliaSonera charged a nominal fee of US$0.56 a month for
unlimited access to stimulate interest and adoption. TeliaSonera has now introduced a three-tiered
pricing plan in Sweden .
Initially, only Samsung LTE dongles were available for accessing the network, but TeliaSonera and
Samsung have recently launched a laptop with a 4G modem, which is also backward compatible
TeliaSonera and Spotify
In 2009, TeliaSonera signed an exclusive 2-year agreement with Spotify, a Swedish music streaming
service. A study by Informa Telecoms & Media, utilizing real data from TeliaSonera and Spotify,
estimated that an operator in Western Europe with 20 million customers could potentially generate
US$106.3 million of revenues from partnering with a music streaming service. This is on top of other
benefits such as reduced churn, increased ARPU, brand awareness and increased lifetime customer
value. Spotify has helped TeliaSonera to differentiate itself from its competitors, as over half of
Spotify/TeliaSonera customers said that they were more likely to stay with Telia as a result of the
partnership with Spotify). The partnership allows Telia to leverage on Spotifys strong brand presence,
especially with those under 30, and effectively tackle the challenge of targeting young subscribers.
Source: Light Reading, TeliaSonera
Price
(per month)
Name of
Plan
Bandwidth
Fair Usage
Limitation
Mobile Broadband
Total 4G
Mobile Broadband
Stor (Large)
Mobile Broadband
Mellan (Medium)
US$92
US$56
US$46
10 to 80 Mbps
10 to 20 Mbps
5 to 10 Mbps
30 GB
20 GB
10 GB
20
Case Study: Verizon Wireless
LTE and its dynamic eco-system
Verizon has long been known for
its walled garden approach, but is
abandoning this model in the face of 4G.
As noted by Lowell McAdam, president
and COO of Verizon, collaboration
and openness are the new paradigm in
the wireless industry, and innovations in
applications and use are increasingly coming
from beyond the company. In response to this,
Verizon plans to transform its business model
by opening its network, applications and location
technologies to outside developers
The International Consumer Electronics Show (CES)
in January 2011 saw Verizon announcing a slew of
new partnerships to add to its value added services offerings for its LTE customers. Slacker Radio, an
Internet radio service, announced that an optimized application for the Verizon Wireless 4G LTE Mobile
Broadband network will be available on select 4G smartphones. It will provide Verizon Wireless 4G
LTE customers with high-fidelity audio and high-resolution album art in addition to artist profiles and
album review, making for a highly personalized music experience. Users will also be able to cache their
favourite stations for offline playback. Other music streaming services such as Rhapsody, MOG and
Tune Wiki also announced the release of exclusive mobile applications on the Verizon Wireless 4G LTE
network, creating a plethora of choices for Verizon LTE users
Verizon Wireless 4G LTE customers will also have the ability to watch their home TV on their 4G
smartphones through a monthly subscription to Sling Media, which will include the Slingbox, the
SlingPlayer application and networking accessories. The significantly faster connection and reduced
latency of the 4G LTE network will enable subscribers to enjoy a higher video quality. The on-demand
premium mobile TV and movie service BitBop also announced at CES that it would be available to
Verizon Wireless customers on both the 3G and 4G LTE Mobile Broadband networks, with additional
functionality for 4G LTE customers in the form of higher-quality video streams and downloads
Mobile gaming will also get a boost, with Gameloft stating at CES that Lets Golf! 2 will be available on
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certain 4G smartphones on the Verizon 4G LTE network. The game is Gamelofts first high-definition
game that can be played over the LTE network, featuring multiplayer capabilities that can be accessed
without a Wi-Fi connection
Another value added service offered by Verizon Wireless comes from its partnership with 4Home
Connected Solutions, enabling customers to monitor and control their homes and energy consumption
remotely using select smartphones. The 4G LTE network ensures that customers can enjoy faster
response times and real-time, high quality video streaming. This service taps into a growing demand
for mobile and online home monitoring applications, with a survey by Parks Associates revealing that
50% of survey respondents were interested in an online application for energy management
Verizon and Skype
Verizon Wireless is also building on its partnership with Skype (first announced in February 2010)
by enabling customers to make Skype-to-Skype video calls on its 4G LTE network. Skype mobile will
be deeply integrated into a range of 4G smartphones with front- and rear-facing cameras,
and these smartphones will be made available by mid-2011. Skype mobile on the 4G LTE
network offers an enhanced user experience due to the low latency of the network, and
also meets a growing demand for mobile video calling.
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Solidiance is a dedicated B2B marketing and growth strategy and g consultancy firm
focused on the Asia Pacific Region.
What We Do
We help multinational clients understand the Asian market landscape by profiling industries
and competition, sizing the markets, segmenting customers, analyzing distribution channels,
determining the best locations, preparing investment feasibility studies, identifying suppliers,
reviewing potential joint ventures or acquisitions, and delivering market entry and growth strategy
in Asia.
What Were Focusing On
Our industry experience is centered on industrial applications, green buildings, cleantech, technology,
and healthcare. Our Asian market entry and growth strategy services provide the required insights
and the necessary roadmap to capture a profitable market share in the region.
Specialties
Asia marketing & competitive strategy, Asia innovation consulting, Asia market intelligence, Vietnam
market research, Indonesia market research, Asia market entry & growth strategy, Asia B2B research,
Asia pricing & distribution strategy, Asia M&A due dilligence.
Additional Details
Solidiance has offices in China, India, Indonesia, Malaysia, Singapore, Thailand and Vietnam. We are
fast expanding and always on the lookout for exceptional people.
Our Clients
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