Given the uncertainties and complexities surrounding the LTE business case, European operators are carefully assessing and fine-tuning their deployment strategies to optimize their rollout and provisioning costs for this new infrastructure. As part of this process, operators are considering two types of deployment optimizations:
Internal optimization by reusing existing cell sites and already deployed passive or active 2G/3G network equipment and optimizing use of their spectrum holdings (primarily through refarming).
External optimization by sharing with other operators cell sites, passive and/or active equipment and possibly spectrum.
Internal optimization will depend on parameters specific to each operator (cell site locations, types of equipment deployed, infrastructure amortization status, etc.) but some common patterns are starting to emerge at the radio access network level:
Initial deployments focus on LTE macro cells co-located with existing 2G/3G cell sites in ultra dense urban areas (typically the 20 per cent of 3G cell sites which carry more than 60 per cent of total traffic). Beyond cell co-location, some operators are leveraging more recent 3G equipment architectures and capabilities to either share power supply or base station cabinets or to activate their LTE cells through simple software upgrades on existing Node Bs (single RAN architecture)
This initial LTE coverage density is then increased either by adding smaller micro/pico cells (as in North America), or by increasing the number of macro cell sites while mutualizing signal processing by using Remote Radio Equipment technology or more rarely Cloud RAN (as Asian operators such as NTT DoCoMo, SK Telecom and KT which leverage their existing dense fiber infrastructure to connect these equipment).
The third phase currently under consideration is large scale densification with multiple options that may potentially be complement each other: offloading to Wi-Fi acess points, offloading to wireline-connected LTE femtocells, LTE cellular relays, micro/pico cell site proliferation with mutualized signal processing
These LTE radio access network deployments also require significant adjustments at the backhaul with increased capacity requirements to more than 150 Mbps per cell site and an exponential growth in backhaul links (resulting from the proliferation of websites). VDSL and fiber-based solutions now become credible backhaul alternatives while point-to-point and point-to-multipoint microwave technologies need to improve in performance to remain viable. Reusing existing fiber infrastructure, and mutualizing new fiber deployments to address both this backhaul opportunity and the wireline access market (primarily for enterprises) are central to future backhaul strategies.
Migration to LTE also accelerates the alignment and simplification of core networks with the emergence of evolved packet core architectures capable of handling a variety of access network technologies.
Moving toward network sharing?
Infrastructure sharing with other operators will also be a major part of LTE deployment optimization, not only for coverage in less densely populated areas but also for coping with the massive cell site densification required in urban areas. Some major operators such as Orange have already indicated that this will be central to their LTE strategy (Orange is also pushing it for other operators). In fact, several commercial arrangements on LTE infrastructure sharing have already happened such as the Net4Mobility joint venture between Tele2 and Tenor in Sweden, the Yota consortium in Russia and the joint venture between PTK Centertel and P4 in Poland.
Several more agreements should be reached soon: in the UK, Everything Everywhere and 3UK could reach an agreement for sharing to facilitate discussions with Ofcom on refarming EE's 1.8 Ghz band GSM spectrum for LTE. In Germany, three operators involved in LTE rural deployments (T-Mobile, O2 and Vodafone) are also exploring how to share the fiber backhaul infrastructure to their cell sites.
Unlike for 3G where European operators embraced infrastructure sharing late into their network rollouts, carriers are much more anticipative this time around. The pace of these sharing agreements may be slower in some countries where national regulators are concerned about the impact on infrastructure competition.
However, the longer term direction seems clear: LTE only improves the economics of infrastructure sharing and should accelerate the rise of co-owned network operations which could eventually be spun off from their service parent companies, thereby reshaping the long-standing perimeter of a telecom operator.
Julien Salanave is a telecoms entrepreneur and innovation enthusiast. He is the founder of Upnext Research, a mobile innovation scouting & prototyping boutique with offices in North America, Western Europe and Asia. You can read some of his insights on emerging developments in the mobile industry at www.upnextmobile.com and on Twitter @juliensalanave.