The European deployment of LTE networks is now lagging behind the North American and Asia Pacific markets, despite TeliaSonera being the first operator worldwide to launch a commercial LTE service in December 2009.
While TeliaSonera has now been joined by Telekom Austria and operators in Germany, many others seem to be lacking the enthusiasm and marketing drive that was demonstrated during the run-up and launch of 3G networks.
While some observers welcome this more measured approach to migrating to LTE, given the technological pitfalls encountered with 3G, the reasons behind this lack of eagerness are more complex.
Slow adoption so far
Dario Talmesio, principal analyst with the market research firm Informa Media & Telecoms, said he thinks there are three primary reasons slowing the move to deploy LTE within Europe: a lack of LTE handsets, a poorly co-ordinated approach to licensing appropriate LTE spectrum and operator lethargy.
"LTE smartphones won't become available until very late this year, or more likely early 2012," said Talmesio. "While LTE-enabled tablets will arrive this year, a very high proportion of European users still want smartphones--as against laptops or tablets."
Talmesio also said that, while spectrum harmonisation shouldn't become an issue for European operators, there are still concerns about the slow approach being taken by national telecoms regulators to make suitable spectrum available.
|LTE subscriptions by region, 2010, 2011 and 2015|
|Region||Dec 31, 2010||Dec 31, 2011||Dec 31, 2015|
|Source: Informa Telecoms and Media|
"Spectrum fragmentation is not really a problem within Europe, as against globally," he said. "But there is a considerable issue in Europe with ‘fragmented timing' where some large countries are not releasing the critical 800 MHz band until 2015."
The analyst claims that some regulators, with Ofcom in the UK being an example, are delaying spectrum auctions to give some operators, in this case BT, the opportunity to build a suitable business case to justify a re-entry into the wireless space.
While this delay might be unique to the UK, the lack of competition in the operator market is also acting as a brake on moving forward.
"Compared to the urgency and drive that was evident during the early days of 3G, today we're in a very different scenario with the deployment of LTE in Europe," he said. "Today, there is the complete absence of greenfield operators, such as 3 UK and 3 Italia, which had critical roles to play in two of Europe's largest markets in pushing 3G forward."
TeliaSonera takes first-mover advantage
But these stumbling blocks have not deterred TeliaSonera from charging ahead after its initial launch in Norway and Sweden, to now offering LTE in Finland, Denmark and Estonia.
The company has taken an aggressive approach to deploying LTE, having only conducted minimal testing before making the decision to go live with a commercial LTE service.
"We talked through the launch issues with our two equipment suppliers, Ericsson and Huawei, who said they could meet our requested timeframe," said Carina Axelsson, TeliaSonera's head of communications for its mobility services. "We knew that the [infrastructure] equipment had been built to conform to standards, and felt that it should be plug-and-play now that we were entering into a 4th generation of mobile systems technology."
While this would appear to have been a trouble-free approach, Axelsson admitted that the early growth of the service had been constrained by a lack of LTE dongles.
"We weren't going for explosive growth, and the situation with the supply of dongles has eased somewhat," she said. "We now have around 10,000 LTE subscribers across the Nordic and Baltic regions, and are shipping multimode dongles together with a Samsung laptop with embedded support for LTE."
Axelsson maintains that the performance of the network remains solid, with drive tests recording downlink speeds of 100Mbps. "But a more realistic figure is 20Mbps to 80Mbps, and these are typical rates for most users," she said.
The company is also using the capabilities of LTE to provide a temporary backhaul solution to relieve short-term network congestion when a large event is staged. The equipment is transported to the site, installed for the duration, and then removed.
"It's a very flexible solution, and we see this being used for temporary installations where much improved data communications are needed for a defined period," said Axelsson.
Operators' other options
But Informa's Talmesio explains away TeliaSonera's and Telekom Austria's headlong rush into LTE as little more than two technology-oriented operators wanting to be leaders, together with a need to offer services to a subscriber base that is very conversant with advanced wireless usage.
However, most European operators are trying to provide greater data capacity by making better use of what is already available to them.
"Many operators are looking at tactical solutions to resolving data overload problems," said Paul Beastall, an expert in wireless technology at PA Consulting Group. "Vodafone is using femtocells, and Wi-Fi offload is becoming more commonplace in Europe. Also, there are no LTE services at the moment that can't be done on 3G. We must remember that the ‘E' in LTE actually means evolution, not a sudden changeover."
Beastall maintains that operators are installing more 3G base stations in high-density areas to cope with demand for in-building coverage. "But the focus for operators will soon switch to providing 3G in the 900 MHz band to further help resolve this problem," he said. "Many handsets already support this frequency today, and its deployment will provide operators with real benefit in the short to medium term."
This view was supported by Talmesio, who said that HSPA and HSPA+ are playing an increasingly important role, and that operators are making Wi-Fi offloading a much more strategic option.
"Wi-Fi and the strength of the HSPA roadmap are both factors behind the delayed deployment of LTE in Europe," concluded Talmesio.
However, while these two mature technologies will continue to play an important role within Europe and around the world, there is broad acceptance among all European operators that they will not stop LTE from being deployed in Europe on a gradual basis.
But operators today are more committed to building their balance sheets and improving their credibility with the financial institutions, and do not see any desperate need to invest now in the next generation of networks without an almost guaranteed return.
"There is much more competition now than when 3G was launched, and the emphasis is on operators controlling their costs to preserve margins," said Beastall.
Perhaps the days of taking big bets on new technology are over, and industry observers should not expect the marketing hype that surrounded 3G in its early days to be echoed with LTE.