CEO, MTC, Namibia: “Will we be able to generate revenues in VoLTE as we do today in circuit switched?”
Miguel Geraldes, CEO, MTC, Namibia is speaking on how the African market is preparing for the LTE data surge on Day One of the LTE World Summit, taking place on the 24th-26th June 2013, at the Amsterdam RAI, Netherlands. Ahead of the show we speak to him the many challenges that faced MTN as it looked to move beyond the limitations of its 3G network and launch LTE into the African market.
Please bring us up to speed with the state of LTE on your network and tell us some of the main challenges you are facing?
I believe that LTE is not a ‘Yes’ or ‘No’ but a ‘When’. We accelerated the introduction of LTE as our 3G network was limited – for several reasons. It operated at a relatively high frequency, which is not ideal for urban areas and impractical for rural areas, a limited number of subscribers could be attached per carrier, and there were admission control or power control issues. 3G smartphones, with their push e-mail and other features are generating a tremendous challenge as the WCDMA 3G radio sites are easily reaching their “power control” limit, blocking data sessions and migrating voice calls down to 2G EDGE. To cope with this heavy usage more NodeBs are required but MTC was limited in the number they could deploy in the Capital, due to regulatory and environmental restriction from authorities.
Based on this, LTE was an imperative because it was possible to be established at the same sites where we had WCDMA 3G. The 1800MHz frequency was awarded to us and was much better in terms of indoor coverage, with no “admission control” limitation, thus providing us with a way forward. Nevertheless, the challenge was first to migrate the heavy users of dongles/routers from 3G to 4G LTE, which we did extremely well, thanks to a tremendous marketing and offer campaign.
What were the chief technical challenges you are facing in optimising your network for LTE?
In our case, the move to LTE was smooth. Firstly, in 2010 we deployed a 2G/3G SingleRAN that was upgradable to 4G. Secondly, we had fibre metro rings connecting to parts of our network, including base stations, which could also easily accommodate IP microwave where needed. Thirdly, in 2011 MTC completed the deployment of a national fibre backbone. Next, in the first quarter of 2012 we were connected to the WACS submarine cable, with which we entered into a consortium venture in 2008. Thanks to all of this, the major elements were in place to introduce the LTE.
However, LTE represents a transformation of a mobile network’s architecture into a full IP network. The unified 2G/3G cores and 4G with EPC (Evolved Packet Core) and the HLR/HSS (Home Location Register and Home Subscriber Server), that includes CS fall-back for voice calls is an interoperability challenge.
This IP ecosystem delivers significant speeds, especially in terms of downlink, and requires a deep understanding of exactly how to manage the IP packages. Optimising the synchronization between the transport data elements (especially HD video) and the connection to the device requires a different mind-set than what most mobile operator are used to.
The LTE World Summit, the premier 4G event for the telecoms industry, is taking place on the 24th-26th June 2013, at the Amsterdam RAI, Netherlands. Click here to download a brochure for the event.
How sensitive are your customers on LTE pricing?
Pricing is always an issue. Pricing LTE higher than 3G could be a problem if the customer does not recognise the relevance of the service. In advanced markets with the latest 3G HSPA and no capacity issues, the customer will have difficulty seeing the advantages of LTE, but where there are capacity issues, then the customer will look for 4G LTE and will even be keen to pay a premium – and that was the case for MTN.
MTC introduced 4G LTE dongles and routers to the market with packages that provided 10 times more speed and capacity than 3G – a much better experience, and charged a 10 per cent premium over 3G HSDPA. Not surprisingly, when LTE was introduced the early adopters were the heavy 3G users and MTC migrated those early adopters for free and kept the same 3G charges for the first three months and only after that charged the premium.
Is VoLTE and RCS part of your plans and what benefits will it bring both to operators and consumers?
Where our networks are migrating to full IP, VoLTE is just a matter of time. Theoretically, VoLTE is the basis to migrate from the current CS to the full IP network, but I personally expect that the 2G/3G networks will be with us for several years.
The industry business model trend is that data represents 80 per cent of the CAPEX, but does not generate much more than 10 per cent of revenues. How we will monetise the migration properly from the current circuit-switched to a future voice over IP (VoLTE) might, in my humble opinion, be the biggest challenge that our industry will soon face. Will we be able to generate revenues in VoLTE as we do today in circuit switched?
Regarding the unified communication services, the rich communication suit (RCS) is a very comprehensive approach designed to cater to the future needs of the end-user, and to combat the OTT players. I believe the RCS approach is very relevant and a very positive move.
How does the move to LTE affect your backhaul strategy?
The strategic direction of our backhaul and backbones submarine cables was defined before we decided to introduce LTE. We were looking for bandwidth for our own transmissions, to move away from the old leased lines and renting international bandwidth, as well as extending our own fibre to the base stations. We accelerated our investment to improve our P&L in the future without the need to resort to renting connectivity, which has been one of MTC biggest OPEX costs.
Why is the LTE World Summit such a key event in your calendar?
It will be interesting to learn if all the communication industry is really aligned and to discover if we are at the front line and if we fully understanding the next steps to take with LTE.