How will the rollout of 4G (LTE) networks in India take place? Kunal Bajaj, Director (India) for Analysys Mason believes that it will largely be in the following manner:
– 2011: there will be data cards and laptop based access to LTE services
– 2012 – LTE data enabled devices and tablets will be launched
– 2013-14: LTE based Internet Telephony services on smart phones devices will be available.
Speaking at a TD-LTE workshop by COAI and CEWIT currently in progress in Delhi, Bajaj said that he believes Voice over LTE will take a few years to develop, and the key challenge there is not about LTE being able to support voice, but more about the technological challenges related to calls being seamlessly transferred from 4G/LTE to other technologies (2G, 3G), so that the voice call doesn’t disappear in the middle when the 4G signal drops out.
Probable deployment models: Hot Zones
In terms of deployment, Bajaj expects that the initial launch will be focused on the urban areas and around June 2011, and this will largely be a ‘Hot Zone launch”, with certain areas with 4G services available. This type of deployment is more popular in the mid-term, particularly to reduce the load on the networks, where you pick up commuting routes or popular areas CBDs, and can even provide it as fixed usage which is wireless. In between hot-zones, you’re asking customers to use 3G.
India, China To Lead The Way; Challenges
Of the 32 trials of TD-LTE deployment announced globally, India has the most trials – six. Clearly, the anticipated scale from China Mobile and Reliance are driving the ecosystem. Apart from Reliance, other BWA spectrum winners such as Airtel, Qualcomm, tikona and Aircel are also looking at TD-LTE. Bajaj feels that though the announced commercial launch for Reliance is end 2011, but is likely that it could switch to the first half of 2012.
“Clearly the challenges will be around maturity: to reduce cost of deployment and devices (not just dongles but smart phones, devices). The advantage of late deployment of 3G for India is that devices are available at sub Rs 2000 prices. India is ahead of the curve in TD-LTE, so it has to lead in driving costs down along with China,” he added.
It isn’t that 4G will displace other technologies – “2G is not going away, and we have seen investments in 2G in terms of capacity enhancements. Our 2G projection says that we still have only 55% or so of total projected number of subscribers 5 to 6 years from now (so there is potential for growth). What we see is a layered approach, with more than 90% population coverage with 2G, 3G with all urban areas out to tier 2 cities. WiFi will have intermittent presence across urban areas, but operators in India are not looking at it as a carrier grade network for data offload. TD-LTE will be layered on top of that, primarily focused on Hot Zones. We will see this pyramid type of deployment, with the coverage area increasing with time.
Modes Of Deployment
Comparing modes of deployments, Bajaj said that there are three models for deployment of 4G/LTE:
– ubiquitious deployment, which is usually done in the long term, but there are telecom operators who want to be aggressive, who deploy ubiquitous LTE from the get-go
– LTE for marketing, “which is used for purposes of saying that ‘we have LTE’, picking up very selective spots within a city, just because you can go out to the world and say that you have LTE. I don’t think any operators in India are looking at this in a medium term.”
– Hot Zone LTE deployments
Analysys Mason has projected just 25 million TD-LTE users in India by 2015, but, Bajaj says, they would love to be proven wrong. He doesn’t expect large scale 4G/LTE handset rollout before 2014, and that only around 25% of India’s mobile base will be on 3G at that time.
Break Even for 4G?
Responding to a question on break even for 4G, Bajaj said that both with 3G and 4G (LTE) networks, the break even will take 4-5 years after deployment, and 3G can break even as a standalone business in 5-6 years. This is largely due to costs – the metro spectrum costs paid for metros were substantially higher than others.
“3G has been slow to start, and we’ve crossed 15-16 million subscribers already, and we will see improvement in terms of price points and quality of service. Quality of service has been a challenge so far with 3G.”
Earlier in the talk, he compared the data costs between technologies: “In terms of network cost per megabyte, this is a generic scenario based on projections, by and large, if GPRS is 42.3 US cents per MB to deliver, LTE is 1.7 US cents per megabyte to deliver. Even if you compare it to HSDPA, and some are moving to HSPA+, it is about half. So there is some benefit that can be gained in terms of economic viability.”
Download the presentation here.