Key drivers of technology shift from HSPA+ to LTE, when and how?

Operators worldwide are feverishly trying to find their ways to manage the mobile broadband traffic growth. Technology strategy needs to match the market dynamics and opportunities to err are legion. One of the most imminent questions operators are facing is whether to jump in early LTE-train or try and leverage HSPA+ investments as long as possible.

If one forgets all the hype and carefully analyses the market dynamics it’s rather evident that LTE is not doing any magic tricks to mobile broadband business. Many operators don’t have an imminent capacity crisis and no mainstream applications need LTE’s superior QoS. It seems most of the hyped LTE benefits are pulp without business relevance.

Early adopters have indeed a marketing advantage but whether it makes sense from business perspective is questionable. At least the recent market development does not indicate promising results from revenue side. Regarding the expenditures, the OpEx & CapEx benefits of LTE are also trumpeted frequently. But the OpEx savings story does not seem to be plausible at all. LTE in fact increases network complexity and power consumption and has very little to do with the rest of the OpEx elements. From the CapEx perspective some savings can be achieved as the incremental cost of capacity is less with LTE than with 3G. But these savings are only addressable with solid strategy and execution.

In some cases LTE can still be very beneficial or even vital and it is evident that LTE will be the dominant design in future. As LTE will be launched in many markets by the early adopters in the near future also the followers must be well prepared for the LTE era. Giving a few years lead for the first launcher may be fatal for the operator image and mobile broadband market share. Therefore Omnitele suggest that operators already start to prepare for LTE with a well-defined migration strategy. This includes multi-technology network design with optimized frequency and infrastructure usage, network modernization RFQ, and even implementation of the LTE capability in selected network areas. By this the operator is ready to act quickly when the LTE era kicks off in the market, either due to competition reasons or because of actual capacity or service demand.

The “when” and “how” of LTE migration was widely discussed in a workshop held by Omnitele at 5th Annual Mobile Network Optimisation Summit Dubai, 5/2011.

To receive the full material including market analysis, operator case studies, and Omnitele insights to feasible LTE strategy please contact esa.vesterinen@omnitele.com