LTE Asia: Smaller cells and lower margins

John C. Tanner and Joseph Waring
14 Oct 2010

Cellcos adopting LTE will have to deploy smaller cells than ever to have enough capacity for the coming mobile data exaflood, but industry players disagree on how much this will cost.

Small LTE cells are necessary not just because of the relatively shorter range of the 2.6-GHz band where it's being initially deployed, but also because operators won't have enough spectrum capacity to support LTE at the macro level, said Dr Shahram G Niri, director of global LTE/SAE strategy and solutions for NEC Europe.

"3G was designed as a macro network, but when you need the kind of capacity needed now, you can't get it from having big cells," he told Telecom Asia during the LTE Asia conference in Hong Kong last month.

Joachim Hallwachs, marketing VP for DesignArt Networks, said that could potentially mean more capex will be required as cellcos deploy LTE.

"Operators will definitely need to increase cell density for LTE, around five to ten times more cells, which also means more related costs like site buildouts, power and maintenance," he said during a panel session at the event. "So they'll have to look at the cost more closely."

Bjorn Amundsen, VP and director head of mobile network coverage for Telenor, agrees, saying the problem isn't the cost of the base station, but the cost of acquiring a new site installing the equipment, which is "increasing enormously".

"For LTE, in an urban environment, you'll need a base station covering every building or every second building, otherwise you won't have enough capacity," he said. "That's why every base station we install has to have a business case for the area it covers." Adrian Scrase from the 3GPP said during the opening that 22 operators are due to launch commercial LTE networks by the end of the year. With only three rolled out to date, that's 19 in less than 17 weeks.

But voice-centric LTE handsets are still two years away, according to Ovum's consulting director for Asia Pacific, CW Cheung. He said 3G device shipments are now just starting to surpass those of 2G.

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