Operators continue to mull the benefits of LTE in Europe


Operators in Germany and the Nordic countries are among the leading pack of those around the world deploying and offering commercial LTE services. The situation elsewhere in Europe, however, is markedly different with France, Italy and Spain still in the midst of LTE spectrum auctions, while the UK has yet to set a date for its own auction.

This approach to the next generation of cellular communications is in stark contrast to 3G, when European operators set the benchmark by rapidly adopting this new technology to provide high-speed data services.

There are perhaps several factors behind why the majority of European operators have not yet rushed forward with LTE services:

  • The cost of acquiring 3G licences and building the networks has been immensely expensive for operators, and I wonder if anyone has been brave enough to calculate whether this huge investment has yet generated a financial return.
  • The susceptibility of 3G in its first few years (or longer) to dropping calls and generally misbehaving was a cause of much frustration for both subscribers and operators alike. However, with the equipment vendors having largely fixed 3G stability issues, and operators significantly improving the coverage density, 3G is starting to prove its true value--albeit this is many years after it was promised by infrastructure vendors.

Add to this the growing capabilities of the 3G technology as seen by the recent Nokia Siemens Networks demonstration of an HSPA+ data call running at 336Mbps. Accepting this was a peak rate and most likely highly tuned for the situation, it does present a picture as to what might be possible.

These improvements to 3G present a problem for operator CFOs when it comes to committing tens of billion of euros to LTE licences and new network deployments.

Why do we need this capability and what is the payback?  Those are the immediate questions that might prove troublesome to answer.

An operator CFO might also ask LTE advocates within the company, Why don't we invest in low-cost Wi-Fi offload if we need more data capacity?

There is also growing recognition that Europe's 3G networks have been developed to a level where they now provide faster data speeds than in other regions, certainly better than the US, and with a much denser coverage, driven partly by regulatory requirements over the past decade.

Also of note is the deployment strategy being adopted by Deutsche Telekom and Vodafone Germany. These two operators have invested heavily in building LTE networks to provide rural coverage because regulators wanted them to address the lack of fast broadband in these areas. But this has provided these two firms with the ability to address a new customer base, and, in Vodafone's case, offer its DSL customers the chance to switch to LTE - and save on the fixed line rental fee Vodafone pays to Deutsche Telekom.

Altogether, any move by European operators to LTE will be conducted at a different pace to 3G, this time driven by hard business reasons as against being blinded by the wonders of the technology.--Paul

P.S. For a greater insight into what's happening in Europe with Wi-Fi offloading, see this special feature.

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