LTE capex 7x cheaper in APAC than US: study

John C. Tanner
02 Oct 2009

Asian cellcos will spend over seven times less capex on LTE migration in their first year compared to their US counterparts, but may still be spending almost 20% more than they need.

According to new figures from network planning consultancy Aircom International, cellcos in the Asia-Pac region will drop an estimated average of $232 million each on capex, including spectrum acquisition, RAN equipment, backhaul upgrades and core infrastructure investment.

That’s just for the first 12 months of investment to provide basic urban coverage. But it’s a bargain compared to the US market, where cellcos will spent as much as $1.78 billion to get LTE off the ground, Aircom said.

The study also found that cellcos in the EU will spend $880 million on average to upgrade to LTE, while operators in MEA will spend $337 million.

Aircom CEO Margaret Rice-Jones said the study draws partly from available data from cellcos in each reason as well as the company’s own experience in cellular network design.

“We’ve basically taken a set of assumptions and modeled the cost based on what those assumptions will be,” Rice-Jones told

Those assumptions include spectrum acquisition (to include refarming), the existing cellular technology base, backhaul, core network investment, plans for network sharing and/or site sharing and minimum level of geographic coverage.

Rice-Jones added the Asian numbers – which don’t include China, whose three cellcos will likely spend far more for national LTE and TD-LTE rollouts due to geographic scale – are lower compared to the rest of the world in part because some markets will allow refarming of 900 MHz spectrum, which means cost savings on both spectrum acquisition and the number of required sites.

She added that backhaul is currently the biggest single cost center for Asian LTE, as many 3G networks still use TDM-based backhaul.

Aircom – which has just launched a new “LTE Cost Calculator” service – said that cellcos looking to either save on capex or at least improve their TCO numbers should look seriously at site sharing and network sharing, to include the backhaul links, as possible options.

Upcoming tech like femtocells and LTE’s planned support for self-organizing network (SON) technology could also help control capex, the study said.

While solutions will vary from market to market and network to network, Rice-Jones said cellcos need to have a clear strategy for their LTE rollout to get the most from their upfront spend – and justify the bill to their shareholders, especially given the current economic climate and the general uncertainty of LTE’s ROI.

“Otherwise, they could end up spending 15% to 18% more than they need just on the first year of LTE,” she said.

Related content

No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.