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TeliaSonera’s commercial launch of its LTE networks in Stockholm and Oslo is a fillip to its global image as well as those of suppliers Ericsson and Huawei. However, we hope the service’s marketing doesn’t repeat the failings of early 3G launches.

Verizon will feel slightly deflated that it has been beaten to the punch by its European rival. The race has been between TeliaSonera and Verizon Wireless for the title of ‘first commercial LTE network operator’.

By appearing in 2009 and not 2010, when Verizon’s launch was expected, this announcement makes a statement as to the maturity of LTE. This will be extremely good news to the LTE supplier community, which now has a tangible case study.

Admittedly, coverage is limited. In Norway the network will serve just Oslo. In Sweden only Stockholm has been covered. In both cases the network does not extend beyond the city center, with population coverage in Stockholm reaching just 400,000 people.

Nonetheless, to cover even these limited areas the network will have required more cell sites than would have been required for equivalent coverage using HSPA, as LTE operates in the higher 2.6GHz band.

This raises questions as to TeliaSonera’s future rollout plans. TeliaSonera promises 25 more cities in Sweden and three in Norway. At this frequency TeliaSonera will require more infrastructure than previously, if it adopts the traditional macro-network build-out approach. The cost implications of this suggest that TeliaSonera, like future LTE operators, will need to take a new approach to network planning.

TeliaSonera has been a battleground for the two infrastructure vendors involved in today’s announcements. Ericsson provided the network in Stockholm and Huawei in Oslo. Throughout the deployment both have released ‘tit-for-tat’ press releases claiming various LTE firsts, and today was no different. For the record, Ericsson won today’s encounter – by two minutes!

Yet today’s news is even better for Huawei than Ericsson. Ericsson is expected to be a leader in its field. However, as we wrote recently, Huawei is rapidly gaining ground on the established vendors and today’s announcement in its rival’s own backyard is further evidence of that.

Device availability
For TeliaSonera the commercial outlook is interesting because of its respective position in each market. In Sweden it is the incumbent, with almost 50% market share (by connections). In Norway it is the second largest mobile operator, but with just over half the market share of Telenor. Therefore the service, tariff and marketing strategies it employs in each market will make excellent case studies for future LTE deployments.

Services will be limited by device availability. A single-mode USB modem from Samsung has been launched and early adopters will be provided with a less than user-friendly workaround of a free 3G modem until multi-mode devices become available in 2Q10. TeliaSonera also admitted that volumes of its LTE device are low and handsets are not expected until 2011.

Services will therefore be aimed at big-screen devices only and are to be positioned as a premium service. Pricing reflects this, at Skr599 ($84) per month – although at just Skr4 ($0.56) per month until July it positions today’s news more as a commercial pilot than a full launch. TeliaSonera emphasized how the service will replicate fixed broadband, with specific mention made of web TV, online gaming, video conferencing and the transfer of high-definition film clips (notably, not streaming). There is a usage cap of 30GB per month, albeit again not applied until July.

Speeds are advertised as “up to 100Mbps”, with averages ranging from 20Mbps to 80Mbps. Given that Verizon recently stated that average speeds on its LTE network are likely to be 5–12Mbps, albeit using 10MHz of spectrum at 700MHz rather than TeliaSonera’s 20MHz, we are concerned that LTE service marketing could repeat the excesses of 3G.

Hopefully TeliaSonera can deliver and this is not an example of the 3G marketing déjà vu that we foresaw in our report The LTE business case: services and business models. Otherwise the capacity and efficiency gains promised by LTE will be instantly lost to bandwidth-hungry applications.

Nonetheless, the pressure is now on TeliaSonera to manage customer expectations. It has won the technical race to LTE; now it must make it a commercial success too.

Steven Hartley and Julien Grivolas, analysts, Ovum