LTE is now the default mobile data option in many countries - according to April figures from the Global mobile Suppliers Association (GSA), there are close to 500 commercially live LTE networks on the planet, while almost 130 operators have moved on to LTE-Advanced or LTE-Advanced Pro. Little wonder talk at industry conferences has shifted to the sexier ground of 5G.
But 5G is the future - here in the present, LTE operators are tasked with finding ways to cope with massive data demands and develop new revenue streams whilst keeping one eye on the 5G prize. Once again, Telecom Asia and Ovum teamed up to conduct an online survey across Asia-Pacific to ask the region’s cellcos - particularly in emerging markets - their near-term strategies and priorities for mobile broadband.
What we found is this:
Even with LTE deployed, some cellcos are starting to feel the pinch in terms of spectrum capacity (depending on how much they have in the first place) and are looking for ways to get the most bang for their buck. As the consumer market saturates, many cellcos are focused on keeping the consumers they have and finding new growth in the enterprise space. They see at least some gold in new services like IoT apps and mobile payments. Many would rather partner for content than invest in their own. And they’re interested in Wi-Fi calling, even if they’re unsure about the business model.
Milking the spectrum
In the wake of WRC-15, there’s been a lot of industry talk about the amount of spectrum needed to support the sheer volume of data that cellcos must handle even before 5G becomes a reality. We asked cellcos if radio access network capacity is currently a constraint on their mobile services, and the answers were fairly evenly distributed - close to 30% say it’s a constraint now, while around the same %age said it won’t be for the foreseeable future. Close to 20% said they’ll start to feel the capacity pinch in the next 12 months.
In any case, when we asked cellcos to rate their LTE priorities for 2016, acquiring more spectrum was pretty far down the list for most respondents. Given what many regulators in the APAC region charge for spectrum, and given the debacle some auctions turn out to be (Thailand’s recent spectrum circus, for example), many cellcos would just as soon wring as much as they can out of the spectrum they have now - or indeed whatever spectrum is available to use.
As such, the big priorities are going to be expanding existing network capacity through techniques like carrier aggregation (CA) and increasing macro network density.
Nicole McCormick, practice leader for Broadband and Multiplay Consumer Services at Ovum, notes that part of this story includes refarming existing spectrum for LTE to improve capacity efficiency and lower per-bit costs.
“In short, for the time being, LTE and carrier aggregation is helping to ease capacity constraints for most operators, including the need to offload data to Wi-Fi and urgency to buy new spectrum at high prices,” she says. “This is also where we expect to see more small cells come into play, as small cells bring network densification which can increase network capacity without the need for additional spectrum.”
McCormick notes that there are, of course, exceptions. “Korean operators needed new spectrum as data on the networks surges thanks to attractive pricing, hence operators recently snapped up new auctioned spectrum, but this time at reasonable prices. Indian operators will also need to continue to top up their spectrum coffers which are low compared to international standards, particularly as LTE arrives.”
Our survey revealed that cellcos are looking more seriously at leveraging unlicensed Wi-Fi spectrum via Licensed Assisted Access (LAA) or LTE-Unlicensed (LTE-U) to ease their capacity constraints. But considering LAA and LTE-U are still hashing out technical issues like interference management, and commercial deployments aren’t expected until at least next year, cellcos are more likely making it a priority in terms of study rather than actual deployment, McCormick says.
“However, CA combined with small cells is a short to medium term way to improve capacity, while operators especially in emerging Asia continue to expand macro network density, plugging hotspot gaps and expanding beyond metropolitan areas,” she says.
LTE small cells were further down the priority list, and more for enterprise (indoor) coverage than outdoor coverage. This highlights the fact that indoor coverage is a major blank spot for LTE rollouts in many markets, and cellcos continue to seek cost-effective solutions for that, particularly in markets where they’re still waiting for freed-up 700-MHz spectrum to refarm.
“The enterprise space for small cells is gaining lots of attention,” McCormick confirms. “Not only does it solve the need case as stated above, enterprise small cells don’t come with the deployment challenges that are found with outdoor or metro small cells.”