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European telcos say LTE will not solve capacity crunch

European telcos say LTE will not solve capacity crunch

Europe’s mobile operators are still grappling with the capacity constraints on the their networks. There are a number of different paths available to them, but they all agree on one thing: the move to LTE alone will not solve the problem.

Opening a panel session at Broadband World Forum on Thursday, Deutsche Telekom executive Denis Gautheret pointed out that operators will not be able to roll out LTE networks if they do not have sufficient spectrum.

“Spectrum is just like gas. You don’t have enough,” he told the Paris audience, referring to the recent wave of strikes in France. And more importantly, the spectrum shortage is more acute in the lower frequency bands, which are much more appropriate for mobile broadband services. For example, the 800-MHz band is 10 times more efficient than the 2.6-GHz band, Gautheret noted. Germany recently auctioned off spectrum in both bands, raising significantly more for the 800-MHz spectrum.

Jaime Lluch Ladron, new technology executive at Spain’s Telefonica, agreed, noting that LTE will help with in-building coverage issues if deployed at lower frequencies, such as in the 800-MHz band. However, even that “is not going to be enough,” he said. It is not a long-term solution.

Meanwhile, in order to be effective, LTE at 2.6 GHz must be deployed in smaller cells.

“[Telefonica is moving towards] street-level picocells and femtocells… based on this 2.6-GHz frequency,” Lluch Ladron said.

His comments were no doubt music to the ears of Femto Forum chairman Simon Sauders, who noted that the vast majority of mobile data consumption takes place in-building. “A large percentage of the traffic is indoors,” and it will rise to 95% of the total in the next few years, he said. “That kind of traffic is particularly hard to serve from the outdoors in,” Saunders added.

To back up the case for femtocells, Saunders shared that it currently costs in the range of $7-$9 to carry 1 Gigabyte of traffic on a mobile network. By using femtocells in key areas, operators can bring about “a reduction in the cost per bit in the order of a factor of four,” he said.

“Mobile data is moving indoors in a big way,” commented Pierre Steiblen, business development director at Qualcomm, who also listed picocells and femtocells among the main options for operators looking to address capacity issues.

Deploying femtocells in problem areas can lead to a significant reduction in the pressure on a macro network. “Even the users who are not served by femtocells are going to have a better experience,” he said.

Meanwhile, Frederic Pujol, head of radio technologies and spectrum practice at iDate outlined a couple of solutions for operators, including the introduction of premium subscriptions for heavy users.

Vodafone Spain and Elisa in Finland offer “premium packages to enterprise customers to prioritise their traffic,” he said. That’s one answer.

However, “the solution of small cells is probably the most important today,” he said, particularly when coupled with WiFi offload.

But Telefonica’s Lluch Ladron was quick to point out that seamlessly offloading traffic onto WiFi networks could have potentially serious consequences for telecoms operators.

If customers do not have a good experience with the WiFi connection, “they will call us. They will get upset with us,” he pointed out, despite the fact that the telco has no control over the WiFi network.

Smartphones account for a maximum of 25%-30% of the market in most markets, Saunders added, leaving a large number of people using non-smartphones for mobile data. “[These lower-end phones] overwhelmingly do not have WiFi in them,” he said.

Returning to the LTE debate, the panellists warned of potential problems arising from the fact that telcos worldwide are planning to deploy the technology in a multitude of different frequency bands.

“There is a real risk of fragmentation, maybe a nightmare,” said iDate’s Pujol. “[We need] regional harmonisation of spectrum for LTE.”

And Saunders pointed out that, like in the U.S., the U.K. government is planning to free up 500 MHz of spectrum over the next five years, most of which is currently in use by the military. The spectrum will be in a variety of bands, none of which are on the current list of 20 LTE bands.

“Be careful what you wish for,” he said.

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