Telecoms consultancy Aircom stirred a debate last week, saying it makes better financial sense in the short-term for operators to upgrade to HSPA+ rather than pursue LTE.
In the case of a tier one operator in Asia, Aircom claims the cellco would need to invest $232 million in the first year to deploy a LTE network. In contrast, a software upgrade to HSPA+ could cost just $77 million.
In other words, mobile operators can cut capex by two-thirds if they upgrade to HSPA+ rather than deploy LTE.
That sort of generalisation was always going to spark controversy, especially from vendors.
Somewhat surprising though, it’s the global operators’ group, the GSM Association, that has come to the defence of LTE.
The Aircom research contains some generic numbers based on a “typical” mobile operator in each region, according to Dan Warren, GSMA director of technology.
“They are broad numbers which doesn’t give an accurate picture of specific costs to a specific operator,” Warren says. “This is because this information is impossible to generalize.”
Warren agrees that the business case for HSPA+ in the short to medium term is extremely compelling.
“The inherent cost benefits of upgrading from HSPA to HSPA+ can’t be ignored, especially when some of the world’s leading operators, including AT&T, Zain, Mobilkom Austria and Telstra have opted to extend their HSPA+ networks prior to embracing LTE,” he argues.
But when it comes to 4G, Warren says: “Every mobile operator around the world faces different challenges when it comes to LTE migration such as spectrum availability and efficiency and the need to generate ROI from existing infrastructure.
“All of these factors mean that each operator has to have its own migration plan to LTE and its own timescales.”
And that’s particularly true when it comes to LTE in Asia-Pacific, where what’s right for one operator even in the same market, does not make sense for another.
For instance, in Japan, NTT DoCoMo is skipping HSPA+, preferring to go straight to LTE by year-end to accommodate its high volume data users. Conversely, Softbank Mobile believes there is still plenty of life to be milked out of 42Mbps HSPA+.
In short, this writer agrees with Warren, that migration strategies from HSPA to LTE will differ for each individual operator and must be based on individual cases.
As such, Aircom’s blanket findings should be treated with caution.