Posts tagged ‘Ofcom’

UK LTE – The Best is Yet to Come

This post is by Bengt Nordstrom, co-founder and CEO of strategic wireless business consultancy, Northstream,

The intense UK media coverage around Everything Everywhere’s (EE) LTE service launch could have fooled people into thinking it was the first launch of its kind. There are, in fact, a total of 113 operators with live networks across 51 countries, according to the Global Mobile Suppliers Association. EE is trailblazing a new path for the UK mobile industry, but this route is not without its controversies and challenges. Bengt Nordstrom, co-founder and CEO of strategic wireless business consultancy Northstream, discusses the UK’s first LTE network launch and whether EE’s gamble to go early will pay off.

4G or not 4G….

The UK regulator Ofcom, much to the consternation of rival operators, allowed EE to re-farm its 1800MHz spectrum to launch LTE services in October. However, prior to this, the regulator had earned widespread condemnation for displaying a lack of leadership in allowing the UK operator community to constantly appeal its decisions. This led to massive delays in the UK spectrum auctions taking place; which in turn has prevented commercial LTE service availability and left the UK trailing its European neighbours.

However, the UK is now catching up, with its first live LTE network. More are now set to follow, with the news that Ofcom will auction LTE spectrum licences, at a reserve of £1.3 billion. It is likely that the auctions will raise three of four times this amount of money. A staggering amount given the state of the global economy; and considering how energised the UK Government appear to be regarding LTE deployment. It seems an enigma why regulators make sense of taxing operators who are prepared to build out critical mobile infrastructure.

Despite the cost, these auctions will have the positive outcome that Vodafone, O2 and 3UK will now get their chance to launch LTE. At the moment though a marketing war has erupted – in which EE’s rivals scramble to differentiate themselves and retain their subscribers. For example, Vodafone has launched a £4.5m national newspaper campaign with the tagline “not all 4G networks are the same”; claiming that Vodafone’s signal will travel “further into your home” and is the only mobile network to “own a nationwide fibre backbone”.

A war of words is one thing, but it will be difficult for competitors to respond to EE’s latest move. Although UK 4G coverage is currently limited there is a genuine buzz among consumers about LTE, following the huge amount of publicity it has received. LTE is the service subscribers are keen on; and EE is offering that now. The reality is that operators will not have a fitting response to EE’s LTE offering, until they deploy LTE themselves next year.

The Price is Right?

EE’s 24 month LTE tariffs, ranging from £36 for 500MB up to £56 for 8GB, have drawn criticism on price and how much data they provide. Downloading a one hour programme on BBC’s iPlayer consumes roughly half the 500MB data allowance the lowest priced EE plan offers. It is commonplace for the first mover in the market to have the advantage. EE has done this by setting the bar high on its LTE tariff plans. However, this premium period should only last a short time. There will be a decline in LTE price plans as other operators enter the market. EE may potentially make an early move to lower prices as they seek to control the market as Vodafone, O2 and 3UK plan their entry.

Higher prices for LTE won’t trouble the initial audience; predominantly early adopters and corporate subscribers. There is also a huge market for LTE USB dongles. EE’s dongle tariffs start at £15.99 for 2GB, up to £25.99 for 5GB, and the device is available from free up to £49.99. This is an attractive alternative to ADSL from fixed line providers. Especially for residents of semi-rural areas who suffer slow speeds as they are far away from the switch. Young professionals living in shared accommodation will also find LTE dongles an easy, convenient and cost effective way to get online. This is a market in which EE can really outperform and provide challenging competition to fixed line players. Traditional telcos would have to deploy an increased amount of fibre to compete with LTE coverage; making it very costly for them to stay in touching distance of EE.

The Challenge Ahead

But deploying LTE does pose some technical challenges; and one of the biggest is backhaul. Fibre to the base stations is required to ensure they leverage LTE’s throughput capabilities. EE will need a lot of lead time to deploy fibre; and it is not an easily available off-the-shelf product. WiFi, a rapidly maturing and familiar technology, is not perfect, but could plug coverage gaps and be a solid foil for EE and its macro LTE network.

The other challenge is one that is unique to LTE over 1800MHz – limited indoor coverage. An 1800MHz base station grid just doesn’t penetrate buildings as well. It will be important for EE to deal with this issue as the majority of smartphone usage occurs indoors. Deploying base stations in buildings is not practical or affordable. Small cells remain a remote concept and a great deal more unrealistic than many perceive. Their unit cost, and the amount required, makes them increasingly unviable solution for operators. In order to provide a good user experience EE needs the combination of 1800MHz and 800MHz; with LTE deployed over 800MHz for better indoor coverage.

It will take time for EE’s LTE network to mature, but there was no reason it took such a long time to launch LTE in the UK. However, the country has not suffered due to the delay. Now 4G is live, the UK has a good chance of reaching the level the rest of Europe is at by 2014. But for a market with such a long tradition of being influential in mobile, the UK’s LTE delay has certainly dented its prestige.

Bengt Nordström biography

Bengt co-founded Northstream in 1998 and has been its CEO ever since. Prior to founding Northsream, Bengt held the position of CTO and Executive Director of Smartone in Hong Kong. Other management positions include Ericsson, Comviq and Netcom consultants. Bengt has also held been on the Executive Committee of the GSM Association as well as chairing its Asia Pacific Interest Group.

Pricing strategies will be a major focus of the LTE World Summit, taking place on the 24th – 26th June 2013 at the Amsterdam RAI, Netherlands. Click here to pre-register for the event

4G in the UK: Timelines settled, now fight for the customers

This is a guest post by Francesco Radicati, an analyst at Informa Telecoms & Media, provider of strategic insight, global market data and primary research.

The UK’s 4G saga may have reached its climax in August with Everything Everywhere receiving permission to launch its own LTE network early, but the story isn’t over yet. UK regulator Ofcom announced yesterday that it would move forward the auction for the Digital Dividend creating by switching off analogue TV, and that clearance of TV transmitters will be brought forward by around five months.

This is a clear concession to O2 and Vodafone, who were the most vocal in criticizing the decision to let EE launch 4G on its 1800MHz spectrum. Given the uncertainty over dates and the long lead times, both operators faced potential waits of around a year to launch their own 4G networks. Add to that the fact that Apple’s new iPhone 5, which hit the market just a few weeks after Ofcom’s announcement, only supports LTE over the 1800MHz frequency in the UK; this might not be an operator’s worst nightmare, but it must certainly be high on the list.

As I said back in August, the danger remained of O2 and Vodafone mounting a legal challenge to stop EE being able to launch its 4G network. But it looks like we’ve avoided that particular nuclear option, which would have caused even more delays; more to the point, it looks like everybody’s (just about) gotten what they wanted.

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Why LTE networks are like buses

There has been some major developments in the UK LTE market today as the regulator Ofcom announced that it will permit Everything Everywhere (the Orange/T-Mobile merger) to re-farm its 1800MHz spectrum for use with LTE. Ofcom has now issued “varied licences to EE which authorise LTE services from 11 September 2012”, and it has told Telecoms.com that it had plans to launch in “certain key locations in the UK by the end of this year”.

The results – howls of protest from the EE’s UK rivals. Their issue is that as they don’t hold licenses for 1800MHz they will have to wait for next year’s auction, currently set to start at the start of 2013, for the chance to bid for 800MHz and 2600MHz spectrum. This could put them almost a year behind in the LTE marketing stakes.

Ofcom said its decision was because, “delaying doing so would therefore be to the detriment of consumers.”

Vodafone though has said quite the opposite claiming that, “the regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.”

Analysing this, Vodafone is trying to suggest that consumers will be better served by having them wait for everyone to launch at once – which doesn’t really hold up. Certainly EE will have a competitive advantage by offering LTE first as there’s serious pent up demand for LTE. Yes, in the long term, consumers will be able to benefit even more from competition in the market once the rest of the players get hold of spectrum via the auction but undoubtedly they will benefit by having access to it as soon as possible

Of course, it won’t matter who has an LTE network if the devices aren’t there. As Informa’s Principal Analyst Thomas Wehmeier says, “Another critical task that lies ahead for EE will be to convince the world’s leading device manufacturers to build smartphones for their network. You can build the network, but without the right devices the customers cannot and will not come”

On the mobile broadband side, it shouldn’t be too much of a problem as the device eco-system is growing, ZTE is producing 1800MHz dongles for CSL in Hong Kong for example. But on the devices side it’s a bit more limited. In Australia, Telstra is offering the HTC One XL, Velocity, the windows-based Titan 4G, and the Samsung Galaxy SII. However, the flagship Galaxy SIII is not LTE 1800 capable. The other big one of course is the iPhone 5. No one knows what that will support LTE at all, and if it does, at what frequencies, but if 1800 is in there, it will be a massive win for EE. (If not Apple and EE will have to be careful, to avoid the hoopla around the iPad’s 4G incompatibility with European and Australian LTE).

What’s really interesting is this from Informa’s Wehmeier. “The ruling issued today applies to the full chunk of 1800MHz spectrum that Everything Everywhere owns in the UK, including the 2x15MHz that it is being forced to divest as a result of conditions imposed on the Orange-T-Mobile merger by the European Commission. The clarity on the potential use of that spectrum will provide fresh impetus to the sale negotiations with Hutchison 3G (3) the clear favourite to land the spectrum. The sale must be finalised by 30 September 2012 meaning the UK could conceivably see two 4G networks up and running by Christmas.”

So after years being behind the 4G curve we may get two networks at once. It’s a funny old world.

UK Operators gear up for LTE in-building to meet Ofcom ruling

 

This is a guest post from Ian Brown, CEO of Axell Wireless, who explains why 98 per cent of UK Population are set to receive mobile broadband indoors by 2017.

Ofcom has recently announced that the UK’s long awaited 4G mobile broadband spectrum auction will be delayed until early 2013. Despite the fact that the UK and Europe are often viewed as falling behind other markets in terms of 4G LTE; this regulatory delay does not suggest a lack of commitment amongst mobile operators to invest in the deployment of the standard. The conditions laid out by Ofcom have also guaranteed that indoor LTE coverage will have a significant role to play in the rollout of LTE services in 2013.

There remains, however, a persistently high level of operator investment in the type of technology that will enable LTE coverage indoors. This is unsurprising when you consider that the 800 MHz spectrum, that will be made available from Ofcom, carries an obligation to deliver mobile broadband reception indoors to 98 per cent of the UK population by 2017. The strong investment in wireless in-building solutions reaffirms an on-going commitment to LTE, on behalf of mobile operators. When coupled with the large scale investment in outdoor ‘macro networks’ that the industry has recently witnessed, it becomes clear that operators are gearing up for the active deployment of LTE following the spectrum auction in early 2013.

The continued proliferation of smartphone technology has led to a huge increase in mobile data usage; with some 80 per cent of traffic now emanating from within buildings, including shopping malls, office blocks and sports stadia. In light of the continued increase in mobile data usage, and the Ofcom ruling, operators must now ensure that the latest mobile broadband standard is available to the many subscribers who are now accessing data services within buildings. Today, many buildings are constructed from materials that reflect RF (radio frequency) signals; meaning that the only way to ensure seamless coverage for users is to install some form of in-building coverage system.

Now that the majority of mobile traffic is emanating from indoors, the operators have become acutely aware of the need to provide comprehensive in-building coverage. This means that more and more operators are now building their networks from the ‘inside out’ rather than the ‘outside in’, which represents a significant shift in mind-set from a few years ago. Europe may be behind other markets, such as the U.S., in terms of commercial LTE deployments, but that hasn’t prevented the operators from adopting new technologies to propagate mobile phone signals into a building. Both the 800 MHz and 2600MHz bands, released by Ofcom, will provide a well needed increase in spectrum for the operators to support new 4G services. However in-building coverage systems typically need to support multiple frequency bands and wireless technologies, including 2G and 3G services. Indeed, some existing frequency bands are being ‘re-farmed’ by the operators to provide further support for 3G and 4G services. Axell is already deploying multiband, multi-technology systems for the mobile operators and this can only seek to reiterate their firm commitment to the eventual roll out of 4G services.

In addition to the nation-wide commitment to deliver mobile phone reception indoors, Ofcom has extended the same proviso to operators, ordering the delivery of an equal standard of indoor service to at least 95 per cent of the population, for each country within the UK.

UK LTE finally gets a date

There’s playing hard to get, and then there’s Ofcom and LTE. After a seemingly endless period of delays, the UK regulator has finally announced that it has set a date for the auction of spectrum for 4G services – and that date, according to the Ofcom release is, – “as soon as possible”. The only actual date given is 11 September 2012, which is when consultation on the legal document that outlines the auction rules will close. (Yes, more consultations). After that Ofcom ‘expects’ the auction process to be start before the end of the year with the actual bidding process will take place is early 2012.

Ofcom said it expects the networks to start rolling out from mid-2013 with services live later in the year. So it could be a full year before consumers will actually be using LTE in the UK using this new spectrum. This seems like a long, long wait when the US has been up and running with LTE in a major way since Verizon launched services in December 2010. Across Verizon, AT&T, Metro PCS and U.S. Cellular, the USA now has around 15 million active LTE subscribers. Let’s not forget our friends in Korea – 4G adoption there has already reached 17% of the current mobile user base.

While the US and other parts of the world are clearly taking the lead for LTE, the consensus is that the UK is lagging the rest of Europe. However, when you look closely the rest of the continent isn’t too far ahead. Germany has had LTE since Vodafone launched in mid 2011, but according to Informa WCIS stats as of June 2012 only 0.26% of the country is using LTE. Italy and France has some coverage but subscriber numbers are yet to register. Telia Sonera launched the world’s first LTE network in December 2009, but as of June only 1.66% of its subscribers are using LTE. Placed in that context, the UK is not quite in the 4G backwater that some might think.

In fact, one could consider it beneficial coming late to the LTE party. By the middle of next year consumers will be able to benefit from more mature and more affordable LTE devices, due to improved technology and economies of scale. To take one, rather important example, Apple will have plenty of time to produce an iPhone and iPad with LTE chipset suitable for UK use. Even if LTE in the iPhone 5 isn’t ready for the UKs 800 and 2.6GHz frequencies, the next one certainly will be.

There’s also good news in the one of the 800MHz licences will require indoor coverage of 98% by 2017. This is a clever move, in that Ofcom only has to force one operator to do this, and the others will be likely to follow suit in order to keep up for competitive reasons. Ofcom has also given expected coveage figures of caround 98%. This, rather than speed, could in fact be the killer difference over 3G. Just this weekend I was out in the country, and while there was GPRS coverage, anything beyond patient checking of email was out of the question. If you can travel countrywide and always have the expectation of data access, then the revolution will not be televised – it will be streamed live to your smartphone.

Ofcom’s also decided to reserve some spectrum for a fourth operator, which as it points out might not necessarily be Huthison’s 3. Well, that’s a bit exciting. A bit.

If 3 doesn’t win the spectrum, it seems unlikely that it could continue in the long term in the UK and with fixed line providers such as BT, Virgin and even O2, having a nationwide wifi strategy, they could well have an eye on picking up that LTE spectrum.

Of course there’s still a chance that the UK could see LTE by the end of the year. Everything Everywhere has already submitted its application to launch LTE in the UK by the end of the year using refarmed 1800Mhz spectrum. In response to today’s news it’s released a statement to say: “the auction is only one step towards bringing 4G to Britain. Everything Everywhere is committed to bringing 4G to the UK this year, and the next milestone will be the regulator’s response to our request to roll out 4G over our existing 1800MHz spectrum without further delay.”

So once again, we’re left waiting for Ofcom. We have indeed hit a milestone, there are plenty more to hit, before the UK’s LTE story is anywhere near to properly getting going.

The LTE Asia 2012 conference is taking place on the 8-9 September 2012 at the Marina Bay Sands, Singapore. Click here to register your interest.

The blame game

The UK has been waiting a long time for LTE, and according to ED Vaizey, the UK’s communications minister, it’s going to have to wait a fair bit longer. Speaking at the Future Entertainment Summit (FES) in London, he told the delegates that while UK regulator Ofcom was taking the head to the delay, the fault lies at the door of the telecoms companies and their coterie of lawyers who are poised to attack.

Vaizey said that 4G, as LTE is now called, would arrive in 2013/2014, which implies the end of 2013. “”We are not going to clear the spectrum until the end of 2013 and Ofcom needs to go through a massive process [with 4G] as it will get sued by telcos if it doesn’t get it right. So, if you are looking at what is delaying it, it is not Ofcom it is the telecom companies.”

It’s not news to anyone following the UK telecoms industry, but Vaizey’s words have been picked up by a wider audience at the FES event and shown just how much the UK really is being left behind when it comes to mobile communications. LTE is becoming ever more widespread and just today it was announced that O2 has launched LTE in the Czech Republic. I imagine that some visitors to London for the Olympics will be surprised to find that there’s not LTE in London.

It seems the best hope is still the announcement by Everything Everywhere that it would launch by the end of 2012 using its spare 1800MHz capacity, which doesn’t require any of that spectrum clearing. Here’s hoping it goes ahead, and that Ofcom has the cojones to let it happen, regardless of the legal threats.

Wishing on an LTE star: LTE in the UK finally on its way

ImageFor a couple of years, any mention of holiday in the LTE blogger’s house brings the same question from the kids: “are we going to Disneyland?” So far, their hopes have been dashed and they have had to instead listen to their friends having all the fun. Once again, this year we’re not going to Disneyland. Actually, we’re going to Norfolk. No, it’s not the same.

It’s a little like LTE in the UK (bear with me on this). Do we have LTE yet, some ask? No, we don’t, and we’ve had to look on enviously as those in the US, and some places such as Sweden, Norway and Germany, have had faster data available to them. It certainly came as a shock to those who didn’t realise that the new iPad’s 4G LTE was not and would never be, compatible in the UK.

Excitingly though, things could be very different by the end of the year. I predict an LTE iPhone, and Android alternatives too, and networks to run them on too.

The signs are good. We’ve got the auctions set up for early next year with spectrum in the 800MHZ and 2.6GHz frequency ranges up for grabs. But what’s this? Everything Everywhere, the UK joint venture between Orange (France Telecom) and T-Mobile UK (T-Mobile), has some spare 1800MHz spectrum lying around? And it wants to use this for a live, actual, real-life network in the UK by the end of 2012? OK. I’ll have some of that.

Exciting as that is, just today I talked to UK Broadband CTO Philip Marnick who told me that come September, the UK subsidiary of Hong Kong’s PCCW plans to have the first commercial network in the country live by September 2012. Admittedly its LTE coverage will be limited to small areas of South London, and a trial area in Reading, but it’s still pretty exciting. LTE in the UK is starting to actually happen.

In addition, this week France Telecom said that it was committed to bringing LTE to ten countries across Europe by 2015 (including its commitment in the UK under the Everything Everywhere brand). That means that by the time we actually do get to Disneyland Paris, they’ll be LTE there too. Double win.

As far as the Everything Everywhere announcement goes it has so far met with the UK regulator Ofcom’s approval, much to the consternation of the other networks, who argue that it goes against Ofcoms’s stated aim of promoting fair UK LTE competition by letting one of them go first. You can understand their viewpoint, but what could spur competition more than the other networks knowing they need to get their LTE houses in order as quickly as possible in order to get themselves competitive?

It might not be in their interest but I think it could be for the UK consumer. The punter gets a national LTE option early, and prices can come down quickly as soon as other others get in the game.

When that happens we’ll no longer be lumbered with the frankly Mickey Mouse 3G networks we rather goofily think of now as mobile broadband and instead be quickly transported to the magic kingdom of LTE.

Philip Marnick from UK Broadband will be speaking at the LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your interest.

Gaming the system: The long and winding road to UK LTE

With news reports of LTE networks popping up all over the place, writing about LTE as a UK-based journalist with a penchant for his iPhone, is something of a frustrating experience. The fact is that the UK will be one of the last major European economies to gain access to a next generation mobile  network, with actual deployments unlikely to see light of day before 2013 – and most likely the end of it.

With the cost of roaming still being so prohibitive (another issue that needs addressing), there’s only been one instance when I have properly made use of a 3G network in another country but it emphatically proved to me that mobile broadband in the UK is poor. This was in Israel last summer, where I swapped my O2 SIM in an iPhone 4, for a local one from Cellcom. It was a revelation. Data was fast and responsive, and more like using wifi back home. Back in the UK, the way if generally goes is that if you’re not in a major city, you won’t get 3G, and if you are, you’re hamstrung by poor latency and network congestion. Rubbish. So will LTE be a panacea for this? Well it certainly should be in terms of raw speed, but  in terms of coverage I’m not holding my breath it will be much better.

According to a recent report from the GSA there are now 49 LTE networks across 29 countries from the Australia and Brazil, Canada, Denmark, Germany, Hong Kong, Japan, Norway, the Philillipes, Saudi Arabia, Singapore, South Korea, and yes, Uzbekistan. Hell, even Estonia’s got one. In the US, once a smartphone backwater compared to Europe, Verizon and AT&T customers in many locations can now enjoy fast LTE speeds from smartphones, dongles and mifi units. And over here in London, home of the world’s greatest sectret agent, Dangermouse?

Nada. LTE, LTE everywhere, but for the UK, not a drop to drink.

And will no one think of the poor, soon to be underprivileged Blighty-based iPhone users? After all, it’s a near certainly that come the end of the year, the next iPhone will finally be LTE ready. In fact, it could even be ready for the iPad 3, which could appear on shelves as early as March of April. When the Apple droves upgrade to their next gadgets, UK users will be starting folornly at their new shiny, shiny, calling out despairingly, “Go, Faster, Dammit”.

As a reminder, spectrum auctions are kind of a big deal for governments, as they tend to raise a lot of mullah. Last time round, the UK government pocketed £22.5bn, though this time it’s accepted that it will be nowhere near this.

So why has there been such a delay for the UK auctions? The main reason is that UK auction will sell off spectrum in the 800MHZ and 2.6GHz bands, and the former will only become free once the analogue to digital switch over is completed, which won’t be until the end of 2012.

The problem was compounded in June 2011 when O2 claimed that the spectrum auction was illegal due to ‘spectrum floors’, which would give each of the four UK networks a minimum of 10MHz of spectrum below 1GHz in order to keep the market competitive. O2 points out that this would be a free hand-out to three and would amount to, “state aid and therefore illegal under EU law”. Whatever.

The carrier with most to lose with the delay to the auction was Three. The issue is that it’s running out of spectrum, which is rapidly being used up by its customers for data, a problem compounded by its, admittedly rather desperate, marketing strategy of being the only UK carrier to offer truly unlimited data for most of its packages.

Three’s problem is that while Vodafone, Everything Everywhere and O2 have received permission from Ofcom to refarm some of their existing 2G spectrum to 3G and thus alleviate their data congestion issues, Three has no such spare spectrum to play with. (The clue is in the name, I guess). Thus it sees the delaying tactics from its UK rivals as a cunning and dastardly ploy to squeeze it out of the market – which it quite patently is.

The whole business was recognised described by the Ofcom chief executive last November as prevarication tactic and pointed out that, “When litigation becomes essentially strategic rather than based on objective grounds, and when it has the effect of holding back innovation and hampering growth, it is legitimate to ask whether the overall legislative framework fully supports the public interest in this increasingly vital area”. In other words, the carriers were gaming the system.

The regulator wasn’t doing itself any favours though, as the latest delay to the process was from Ofcom itself, when in October 2011 it said it would need to run a second set of consultation with the carriers due to the significance of the decisions it had to make. This doesn’t instil confidence in a regulator that exists solely to make those sorts of decisions.

There’s some talk that the UK has benefitted that from holding back by seeing the mistakes that other operators might have made in their rollouts but I don’t think that holds much water.

By the time that the first LTE network finally do come online in the UK it’s more likely that we will have suffered years of slow lane mobile speeds, and many millions of pounds lost due to the data bottleneck that’s been imposed on UK business, at a time when the economy could very much do with a boost.

It’s almost as bad as the UK’s train networks, which I have to suffer everyday on the First Capital Connect Line. Oh don’t get me started…

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