Telia's LTE subscriptions off to slow start
Mobile operators can have hugely selective memories. Many have very ambitious targets for customer uptake in the early days of their 4G build-outs, yet the history of 3G in Europe and now China tells us that, until there is a good choice of devices, new users will remain limited in number. So it is hardly surprising that the only commercial LTE operator so far, TeliaSonera in Norway and Sweden, has only 1,000 customers to date.
Its networks cover about 400,000 people in the two countries' capitals, Oslo and Stockholm, and went live at the end of last year. The estimates of uptake came from analysts but were not denied by the carrier, which said the lack of handsets was the main factor.
Lars Klasson, VP of mobility services, pointed out that the service is currently based only on dongles, which limits it to heavy laptop data users. But he accepts Telia will have to rely on that base for some time to come. "As for the LTE phones, we say 'forget it for now'," he said in an interview. The problem with being the frontrunner in a relatively small country is that there is not sufficient scale to attract major handset vendors into the market. Klasson knows the big name phonemakers will wait for the large markets like the US to go live.
This puts pressure on Telia, and other early operators, in terms of their breakeven plans. Growth will remain slow for the first couple of years, but in the meantime, the carrier has an ambitious build-out plan to expand the network. Analysts in Sweden estimate an LTE network costs about €2 billion per 50 million inhabitants to build, plus license fees (€50 million in Telia's case).
Early Wimax operators have faced the same dilemmas, though their route to handsets is a couple of years ahead of LTE's. In LTE, merchant chipsets should arrive next year, and there are still technical issues in areas such as battery life, plus patent licensing talks, to be finalized before phones can appear commercially. In Wimax, Sprint and its partner Clearwire are just launching the US' first smartphones supporting 3G and Wimax, with Sprint shipping the HTC EVO. Like Telia, the US firm believes an attractive handset will provide a fillip to customer uptake because the 'Sprint 4G' service will be able to appeal to a wider range of customers and usage patterns.
[This article originally appeared in Rethink Wireless]