The role of LTE

Amrish Kacker/Analysys Mason
23 Aug 2011

Operators around the world are now evaluating the role for LTE in their overall business, because LTE will provide better cost economics in additional spectrum that will become available, and an enhanced user experience through technology improvements.

  • Spectrum in which LTE can be deployed is available via new allocations (700/800MHz, 2.6GHz) or refarming (1.8GHz).
  • The availability of additional spectrum in these bands will enable more cost-efficient networks that can accommodate increasing demand for data from handsets and USB modems.
  • LTE will enable operators to offer services with headline speeds comparable to those of fixed broadband.

Operators are evaluating three business models for LTE, as summarized in Figure 1.

  1. Ubiquitous LTE: An aggressive network deployment with the business rationale of offering a premium service in the market as well as potentially reducing network costs when assessed over a period of five to seven years. The lower network cost is a result of avoiding capacity-driven investments in HSPA in the initial years. Typically, mobile-only operators (such as CSL in Hong Kong) are most likely to adopt this approach.
  2. Hot-zone LTE: Focused LTE deployments to reduce network congestion, and gradually expand coverage over time in a managed technology migration path. While there is some potential for ARPU improvement (for example, by offering LTE headline downloads only in the higher-end packages), the primary rationale for this strategy is to manage short-term capacity requirements and costs effectively. Typically, integrated incumbents (such as T-Mobile in Germany) are most likely to adopt this approach.
  3. LTE for marketing: Limited and selective deployments for use as a marketing message in branding next-generation capability to consumers. Typically, spectrum-constrained operators (such as M1 in Singapore) are most likely to adopt this approach.

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