LTE doesn't come cheap

European operators seem to have adopted a wait and watch strategy for the commercial deployment of LTE. Trials and tests continue to be announced, with Telefonica O2 being the latest with news that it would launch field trials in six countries with six equipment vendors.

But Telefonica O2, along with other major pan-European operators, has remained cautious when asked about live LTE networks, with only TeliaSonera committing to launch the technology sometime next year in Scandinavia.

There are two possible causes for this guarded approach--lack of terminals and the Capex required to build LTE networks.

Operators were badly scarred by the promise of 3G capable handsets after they had paid billions for the licence--and then invested hugely in deploying the so called high-speed network, only to receive a small selection of near-prototype phones and 3G networking technology that still needed several years in the lab.

LTE terminals would still seem to be firmly under wraps with rumours pointing towards Verizon working with RIM on suitable handsets, and former Japanese heavyweights co-operating to bring terminals to market in time to support NTT DoCoMo's planned LTE launch.

Otherwise, LTE handset announcements remain hard to find, albeit that there is increasing chatter from within the semiconductor industry centred around forthcoming LTE chipsets.

The question of financing the LTE network build was given a public airing last week by Aircom--a network consultancy firm. The company claimed that a major European operator should be looking for a US$880 million Capex budget, assuming it planned to provide first-year coverage to three major conurbations, upgrade the backhaul and pay for ancillary costs.

This Capex estimate made no provision for spectrum licensing or the possibility of network sharing--which seem increasingly likely with indications from those involved that cost savings of up to 20 per cent are being achieved.

In addition to network sharing, self-organising networks and the deployment of femtocells (if the consumer can be persuaded to buy them) could help lower the overall network costs.

Perhaps European operators are content to let others be the LTE pioneers - prove the technology, educate the subscriber and mould the business model into a viable shape.

Given the capabilities of HSPA+, what's the rush? -Paul

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