Asia’s scale of 4G rollouts drives innovation and cost cuts – Mobile World Live

Asia’s scale of 4G rollouts drives innovation and cost cuts

19 NOV 2014

LIVE FROM HUAWEI GLOBAL MOBILE BROADBAND FORUM 2014, SHANGHAI: Asia’s scale of 4G deployments has not only led to lower network costs for the entire industry, it has also driven the overall level of maturity of 4G so that the industry is no longer dependent on Europe or Silicon Valley for innovation.

Those were two of the key themes discussed during a panel on LTE leadership at the forum yesterday.

GSMA CTO Alex Sinclair said several regions are leading in LTE in different ways. North America has made a lot of progress and many people think all the innovation has to come from California. “That’s simply not true. If you come to this part of the world, you see continuous innovation, beyond what the standards bodies outline.”

If you come to this part of the world, you see continuous innovation, beyond what the standards bodies outline.

He said the model in Asia that seems to work well is you first deploy a technology, you drive usage heavily and then you gain scale, which creates a virtuous circle. “I live in the UK and I still can’t get a 4G signal. When I go to Seoul, it’s like travelling two years into the future.”

Sinclair said you also need the right regulatory environment. “In Japan, South Korea and China you have an industry-friendly, or forward-looking environment, which really helps, because in some parts of the world there’s an inclination just to tax and see it as a source of revenue.”

Cost reductions
Asked how others can benefit from the innovation in east Asia, David Wang (pictured), president of Huawei Wireless Networks, said the huge investments in 4G networks has helped the entire industry by pushing down costs on the infrastructure side.

Although not on the scale of China Mobile, with over 500,000 4G base stations, he said LG Uplus in South Korea has more than 120,000 4G sites and operators in Japan have an even larger scale.

The increased scale has also driven down the cost of 4G smartphones, which are now below $100 in China, and that has broadened the audience.

Wang noted that Asia has a huge population and customer base, but also a culture of trying new things, which forces operators to innovate. LG Uplus has demoed three-band carrier aggregation and plans to go commercial soon, and China operators are working on FDD-TDD convergence, which he said are both challenging.

“This innovation has driven the maturity of 4G technology, and not just lowered costs.”

He noted that the leadership has also shifted away from Europe as the industry moved to 4G. “In all of Europe, there are fewer than 150,000 4G base stations.”

During the panel, the audience was asked to respond to a number of survey questions, mostly on network related issues.

Almost half of the audience said higher ARPU was the most significant value that LTE has delivered. Over a third said lower cost per bit was most important, while 10 per cent said it was increased customer loyalty.

LG Uplus CTO Lee Chang Woo said its ARPU has increased 38 per cent to more than $36 since it launched LTE three years ago. Per user traffic has jumped from less than 1Gb to 2.6Gb. Now 73 per cent of its 11 million mobile connections are LTE.

Half of the respondents said LTE would lead to a 20 per cent increase in ARPU. Another 35 per cent expected a 40 per cent jump in ARPU and an optimistic 13 per cent looked for a 60 per cent rise.

Again, almost half the audience indicated that the key to achieving LTE business success was diversified services and apps. National coverage was ranked second (36 per cent), followed by flexible tariff packages (10 per cent).

China Mobile Institute VP Huang Yuhon said the results reflect the fact that allowing new services can create additional value for operators. “If only simple data usage, then they can’t add value.”

Carrier aggregation
Looking at the timing to deploy carrier aggregation, a third of those surveyed said next year, 27 per cent said they have or will deploy this year and 28 per cent plan to by 2016. Twelve per cent have no plans.

China Telecom deputy managing director Shen Shaoai said carrier aggregation will allow it to use all its spectrum bands. “We’ve done a lot of work preparing for carrier aggregation to improve the user experience.”

The message is that operators are keen on technologies that allow them to leverage every single hertz available — across both paired and unpaired spectrum.

Regarding deploying LTE over unlicensed spectrum, 39 per cent off those polled were neutral in the issue, while 27 per cent were highly confident and 20 per cent were confident. A surprising 14 per cent weren’t aware of unlicensed spectrum.

Author

Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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