CSL CTO, Christian Daigneault

CSL is Hong Kong’s leading mobile operator and was the first of the market’s five players to launch LTE. Ahead of his apperance at the LTE Asia 2012 event in September, CTO Christian Daigneault talks to Telecoms.com about the unique demands of the Hong Kong market and how the firm is using LTE at 1800MHz and 2600MHz to meet its customers’ needs.

Hong Kong is a fiercely competitive market, with five operators battling for the custom of a population of just 7.15 million. This demand for data services is growing at a rate that is challenging to manage. The leading operator, CSL, has seen traffic growing by a factor of three year on year, says CTO Christian Daigneault, and the firm expects this to drop to a more “resolvable” doubling of traffic in “the next few years”.

High demand coupled with intense competition led CSL to pioneer LTE in the Hong Kong market, launching at the end of 2010. Hutchison, China Mobile and PCCW followed suit in the spring of 2012, leaving Smartone Vodafone as the only carrier yet to have deployed the latest generation of network technology.

When CSL launched its LTE network, its 3G network was groaning under the weight of data traffic, Daigneault says. The firm wanted to steal a march on its competitors and led off with a partial deployment of LTE at 2600MHz. More recently the firm has been adding 1800MHz into the mix, giving it better in-building penetration in a market where this type of coverage is key.

Hong Kong’s operators deploy indoor coverage in major hotels, skyscrapers and office blocks and, given the limits on real estate in these environments, the carriers share the infrastructure. This is as far as network sharing extends for CSL, says Daigneault, and accounts for roughly one quarter of the firm’s cell sites.

At the LTE World Summit in Barcelona in May there was much discussion of the need for network sharing to begin at the point of deployment for LTE. Operators voiced concerns that the new network technology might not be financially viable if they were required to deploy a network apiece. Daigneault argues that there is a growing gap between Europe and the more advanced regions of Asia and the US.

For him the need for operators to roll out networks individually should drive deployment, rather than delay it. “In Europe there is not enough competition. Here in Hong Kong there are five operators in a small market and the competition forces us not to stop. Customers are very demanding, so as soon as one operator [makes a move] then everybody else has to follow.”

Recent visits to Western Europe revealed the disparity in network performance, he says. “In the UK and France I was on EDGE very often, and you don’t see that in Hong Kong. We are now in a different league. We’re on 4G and already thinking about dual band and LTE Advanced, so the lag in Europe is becoming pretty large. It seems to me that, in some countries because of the economic situation, there are sort of agreements between operators not to deploy. And if nobody does it then there’s no pressure to deploy LTE.”

CSL has taken advantage of the freedom to deploy LTE at both 2600MHz and 1800MHz, he says, with a spectrum allocation for 1800 in excess of 2 x 20MHz. While deployment began with 2600MHz because of licence requirements (there were no devices for LTE 1800 at the time, in any case) the firm expects to position the 1800MHz layer as its mainstay, using 2600MHz for capacity.

An important benefit of LTE 1800 for CSL, says Daigneault, is that it will be deployed more widely across the globe than 2600, opening up a better device ecosystem and improved opportunities for international roaming.

As a small market and a business hub, Hong Kong imports and exports a great deal of roaming traffic and CSL implemented its first LTE roaming agreement, with South Korea’s SK Telekom, in July of this year. The deal was hailed by CSL as a world first, and the two carriers’ common use of 1800MHz (SK also deployed LTE at 800MHz) was the enabler.

How CSL will manage roaming with other markets remains to be seen and depends, as always, on the terminal community. “We don’t yet have a device that supports American bands as well as 1800MHz and 2600MHz and there might be limitations in terms of being able to support both,” Daigneault says. But there is motivation from both sides.

“I was talking to Verizon recently and it’s becoming important for them to support roaming with LTE, so even they are asking their vendors to support 1800 and 2600 as international roaming bands and we hope that it will be coming,” he says.

Daigneault concedes that, as a relatively small operator in terms of subscriber numbers, CSL cannot exert a great deal of influence on handset vendors. It is taken as a given that the next Apple iPhone will be LTE-capable and Daigneault says that CSL did “let Apple know that LTE is our favourite technology now.” He continues: “We only hope that the next iPhone will have support for LTE as our plans for offloading from 3G are based on the premise that all our new smartphone devices will be LTE—and we think the momentum around LTE devices generally is becoming stronger.”

CSL has already shifted ten per cent of its dongle traffic onto its LTE network, Daigneault says, and is working hard to up that number. Hong Kong has one of the highest penetrations of smartphones and tablets in the world, he says, so there is plenty of motivation.

Daigneault offers CSL as a case study for operators in markets that might be one or two years behind Hong Kong. “Other operators can learn from us because of the density of traffic that we have,” he says. “What is happening to us now will happen to others in one or two years’ time. We have to build very high capacity networks, which is why we decided to build a two-layer LTE network so we don’t have to go back and add more capacity every month.

“You have to build ahead of the curve, this is something that we have learned. We aren’t catching the curve, we’re preceding it.”

The LTE Asia 2012 conference is taking place on the 18-19 September 2012 at the Marina Bay Sands, Singapore. Click here to register your interest.

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