Takeaways from LTE World Summit

Steven Hartley/Ovum
30 May 2011

LTE World Summit in Amsterdam

The hardest-hitting message from the event actually materialized on the second day: the telecom industry needs to fundamentally adapt to a new environment. Presentations from Yota of Russia and LightSquared from the US portrayed the evolution to LTE as part of a wider industry transformation. Their views practically endorse the conclusions of our Telecoms 2020 series, in which telcos must adopt a far more network-centric approach (LEAN – low-cost enablers of agnostic networks) or become full-service SMART (services, management, applications, relationships and technology) players.

In line with our LEAN scenario, Yota was first to declare that its recently announced deal to become the single wholesale LTE provider to Russia’s mobile network operators (MNOs) was an example of how the industry should evolve. Yegor Ivanov supported this view with the fact that the spectrum at 2.6GHz and level of investment available in Russia for LTE would be insufficient to meet the market’s needs. He also cited an excellent example of how other industries separate infrastructure from services: airports don’t operate airlines and airlines don’t operate airports.

This view was echoed by LightSquared, which proclaimed the era of the vertically integrated telco as over. As such LightSquared would not be retailing its services. It also elaborated on what this restructured approach means to a telco. LightSquared is ruthlessly focused on cost and its primary focus is the network, so operational activities are outsourced.

As a result, it aims to have no more than 500 employees. To reinforce the point, LightSquared quoted a survey of 2,000 Amazon Kindle users. Only about one third of respondents knew who provided their connectivity. Better examples of the LEAN model in action will be difficult to find.

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