Senior consultant, LTE
How much potential for LTE-only?
With LTE nationwide coverage a near-reality in some advanced markets such as South Korea, the USA and Japan, the question arises of the relevance of launching LTE-only devices. Indeed, LTE-only devices come with benefits for both operators and consumers, especially in terms of cost, energy consumption and space saved inside the device and available for additional components or larger capacity batteries.
• For the operators, LTE-only devices may even become strategic since it will help them to transition their users more easily to their latest network while releasing new resources to cope with the data traffic explosion. Today, voice is no longer of any importance, but data is. With carrier aggregation, each chunk of spectrum available is valuable. Fewer 2G/3G users means more capacity for mobile broadband networks.
• Few operators have already launched LTE-only devices. Verizon is one of the first to have done so with a digital camera and more recently a tablet. Other operators such as LG U+ in South Korea have also done so with ultrabooks and hybrid laptop/tablets devices.
• Our forecasts for LTE devices indicate that close to one billion will be shipped in 2017.
M2M modules, shipment trends (In millions)
• However, some applications are more suitable than others for those kinds of devices. The first LTE-only handsets, for instance, should arrive on the market in 2014-2015 but they will require VoLTE to be supported on the network to have any meaning. Still, as long as LTE is not widely available worldwide with LTE roaming in place (which may take time), using its device abroad may be tricky.
• In the data-centric segment of devices however, the potential is bigger but the question of the competition with other wireless technologies remains. Fixed LTE broadband in remote areas is an application of choice for LTE where fixed broadband technologies are not available. However, many objects or appliances will rather be connected with shorter range technologies than rely on cellular connectivity. Indeed, why connect your fridge to an LTE network with an associated plan when you already have a broadband connection in your household? Likewise, devices such as smartwatches or e-health devices with sensors embedded for measuring self-use will rather be connected to smartphones with some Bluetooth Smart (Bluetooth Low Energy) than directly to a cellular network.
• Even more specifically in the M2M segment, LTE is currently not adapted to traditional low energy / narrowband / cost-conscious applications such as security, metering, fleet management. For these applications, work is being carried out to bring some machine type communication (MTC) in the Release 12 of LTE but compliant devices are not expected in the immediate future. This work will lead to the emergence of some kind of narrowband / low energy LTE.
The market report entitled “The LTE only market” is published as part of IDATE’s LTE World market series
Co-Head of Satellite Practice
43% of worldwide commercial aircrafts will be connected for broadband access services in 2017 against only 17.5% at end-2012
Until quite recently, the aviation communications market was limited to operational communications between the cockpit and control tower. It is now expanding to include voice and data communications for passengers around the world, a market that, while still limited, is set to grow in the next few years. The technology has been around for a number of years, but Boeing’s CBB service failed to convince airlines back in 2004. As airlines compete fiercely among themselves and with other modes of transport, the benefits of passengers being able to use their cell phones or go online via their laptops or tablets could prove a very strong selling point.
The in-flight connectivity market is rapidly expanding around the world
- The market for broadband access on planes will continue to grow in response to strong demand from air passengers for connectivity.
- Expectations run very high: air passengers are seeking the same quality service and experience they have grown accustomed to with terrestrial connections.
- Applications are still mainly focused on internet browsing and emails, but video consumption increases rapidly
- To meet these expectations, one by one, airlines are equipping their fleets with broadband Internet access. By mid-2013, over a third of domestic flights (38%) in the United States offered an Internet access solution.
- We now see a sharp increase in the number of equipped planes in all geographical regions of the globe, although virtually all of the systems currently in operation are in North America.
Evolution of "connected" aircrafts between 2010 and 2012
Source: IDATE, Market Insight "Inflight conenctivity: Satellite vs LTE", August 2013
The business model remains uncertain
- Revenue-sharing is the most common business model today. A price is agreed between the operator and airline and the revenues then shared, the operator usually taking a larger cut than the airline;
- According to IDATE, the revenues from these services are not sufficient to generate a profit. They essentially cover just the operating costs (purchase of bandwidth, system maintenance and extra fuel consumption due to the weight of the terminal and increased drag on the plane);
- In the future, these services could not be extra-charged
- According to IDATE, there are still doubts regarding a sustainable business model, especially because the still weak adoption rate for paid-services (approximately 7%)
Satellite access solutions should face competition from LTE by 2016
- Two solutions currently exist: an Air-To-Ground (ATG) solution in the United States, which is losing pace due to the lack of adequate spectrum, and the satellite solution (Ku and Ka frequency bands).
- The introduction of Ka-band systems should revolutionize the market, providing access to much faster speeds (from 2 to 12 Mbps per passenger) at much lower prices (bandwidth costs up to 10 times cheaper).
- By 2016, however, satellite will face competition from LTE, a technology currently being tested by manufacturers such as Alcatel-Lucent, ZTE and Huawei for in-flight connectivity on commercial aircraft.
- LTE solutions could reach speeds of 30 Mbps per plane, with much lower CAPEX and OPEX.
IDATE estimates that 43% of aircraft will be connected in 2017
- According to our estimates, at end-2012, more than 2 700 commercial aircraft worldwide offered a broadband Internet service, 80% of these via the Gogo terrestrial solution.
This figure represents just 17% of the total fleet of planes worldwide, which Airbus estimates at 15 500 aircraft.
- According to IDATE, the market for broadband Internet access on planes should expand sharply between now and 2017, reaching 8 240 aircraft in 2017 (43% of the total fleet in service worldwide).
- Market is facing a complete hybridization of ATG LTE & Satellite services up to 2020.
IDATE's new insight "In-Flight Connectivity" provides its readers with a synoptic overview of the latest changes in the In-Flight Broadband market. It showcases the market's current services and usages, analyzes the various business models, details the existing satellite solutions and proposes a prospective for 2017, taking in account the emerging Air-To-Ground solutions based on LTE technology.
Head of the radio technologies & spectrum practice, IDATE
APAC is leading the LTE world market with a huge growth expected through 2017
Globally, Asia-Pacific market is second, behind the American, with more than 35 million subscriptions in Q1 2013, when our forecast is more than for 540 million LTE subscriptions at the end of 2017 in Asia-Pacific:
- South Korea alone hit 20 million subscriptions in April 2013.
- Massive TD-LTE network deployments in region
- Future of TD-LTE depends mainly on China and India: a potential market of 800 M TD-LTE subscriptions issued by China Mobile and Bharti Airtel.
LTE market share in Asia-Pacific, 2012-2017
Source: IDATE - LTE Watch (July 2013)
- South Korea: the two leading operators in South Korea, SK Telecom and LG U+, launched LTE in 2011. KT followed in 2012. Given the very rapid deployment of LTE networks with 100% of the population covered in May 2012, the competition between the three operators and the launch of LTE-Advanced in 2013, South Korea will remain one of the most dynamic LTE markets in the world.
- Japan: the Japanese market saw an acceleration of LTE deployments due to SoftBank’s strategic move. The operator is operating both a LTE FDD and TD-LTE network and forced NTT DOCOMO to accelerate its LTE deployment.
- India: The first TD-LTE service was launched by Bharti Airtel in April 2012. Delays in spectrum allocation for lower bands limit LTE expansion today. Administrative issues linked to spectrum and availability of TD-LTE devices will be key to the uptake of LTE technology in India. We lowered our forecasts considering that adoption is slower than expected: in September, Bharti Airtel had only 3,000 TD-LTE subscriber.
- China: recent news indicated that the Government might award LTE licenses in end-2013. China Mobile is deploying more than 200,000 TD-LTE base stations and will be able to quickly grow its LTE subscriber base once the Government authorises commercial operation.
- Australia: take-up of LTE is quite fast and the country recently auctioned the 700 MHz band.
This analysis is an excerpt of our World LTE Market Database & Status report - July 2013
Published in COMMUNICATIONS & STRATEGIES No. 90, 2nd Quarter 2013
The radio spectrum: A shift in paradigms?
Summary of this issue: Demand for the use of the radio spectrum is constantly and rapidly growing, not only as a means of carrying Internet traffic, but also for new or expanding use by the military, public protection and disaster relief, at the same time that more traditional applications such as aeronautical, maritime, and radio astronomy remain. Is spectrum policy entering a trackless wilderness, or can a new direction and a new set of paradigms be expected to emerge? The contributions to this special issue of Communications & Strategies cover a great deal of ground. They serve to provide valuable signposts for spectrum policy going forward.
Interview with Gilles BRÉGANT
CEO of ANFR.
(French national spectrum agency)
Conducted by Frédéric PUJOL,
Head of the radio technologies & spectrum practice, IDATE
C&S: What are ANFR's main priorities in the coming two years as far as Spectrum management is concerned?
The Agence nationale des Fréquences (ANFR) is the French public Agency in charge of radio spectrum management. It is placed under the jurisdiction of the Minister responsible for Electronic Communications (Mr. Arnaud Montebourg and Ms. Fleur Pellerin since May 2012) but all the Ministries using spectrum are represented at ANFR's board. Besides, ANFR's decisions regarding spectrum allocation are actually taken by the Prime Minister since spectrum, in France, is a state affair.
Spectrum management priorities will be closely linked to the governmental decisions and digital economy needs for the following years and to the international and European agenda.
A. Create the conditions of mobile broadband (4G) success in France
4G allows very high data flow rates and significantly increased user comfort: lightning-fast downloads, and a more fluid navigation become possible on smartphones or tablets. This opens up opportunities for new services in mobility, such as access to audiovisual content. A factor of innovation, growth and job creation, 4G is one of the priorities of the Government. ANFR has been deeply involved for the development of European harmonized conditions for the usage of 4G and is currently mobilized to make a success for the introduction of this new technology.
Since December 2012, the Agency has published a 4G roll out observatory. This tool will be key to monitor 4G infrastructures deployment, carrier by carrier.
However, the 4G challenge will be a tricky one when it comes to spectrum management since the 800 MHz 4G can interfere with DTT. ANFR uses its resources devoted to the protection of TV reception so that the 4G 800 MHz and TNT coexist harmoniously.
The ANFR intervenes at every stage of the deployment:
- it actively participates in the communication towards local elected officials, professionals and the general public on these operations;
- during the phases of deployment, it collects and instructs the claims of viewers through its call center;
- it oversees the resolution of the problem by operators if the interference comes from the 4G 800 MHz. A professional intervenes, most often to insert a filter in the reception of the TNT facility.
The TV reception is therefore guaranteed for each viewer. The full cost of interventions is supported by mobile operators.
B. Prepare the next World Radiocommunication Conference (WRC)
In 2012, we have drawn the immediate consequences of the WRC-12. In 2014, the delegations will develop first arbitrations of WRC-15. In 2013, national positions must be taken.
One of the challenges of this Conference will be the question of the future of the 700 MHz band. In France, it is now assigned to audiovisual. Since the debates on the first digital dividend, five years ago, the terms of the problem have been well known: the use of mobile Internet is expected to grow regularly in the coming years to meet the expectations of very mobile broadband. But this demand for broadband is common to all sectors: the audiovisual sector wants to keep these frequencies to offer new services: generalization of high definition, introduction of ultra high definition or 4K for example. And Government services, such as those of the Ministry of the Interior, also want to access services such as video for safety services.
In this debate, three ideas seem inevitable:
- there is not enough spectrum available under 1 GHz to satisfy fully each need;
- France is not an island, and it will have to act in harmony with its Western European neighbors;
- Europe will have to play an important role.
ANFR, as it manages the entire spectrum and guaranties technical neutrality, is coordinating the preparatory work at the national and international levels. ANFR, which is already contributing to the preparation of the next WRC, is involved in various entities in CEPT and UIT involved in this process and is bringing its technical expertise to the Government so that a decision can be taken in the best conditions.
ANFR is also an active member of the RSPG ad hoc group, which will provide recommendation to European Commission on WRC issues and on the identification of 1200 MHz for wireless broadband.
C. Facilitate the deployment of the 6 new DTT channels
Since December 12, 2012, 25% of the French population can access 6 new HD channels with their DTT HD TV sets. Free to air TV is no longer limited to generalist channels. Every French citizen, and not only the ones with cable, satellite or IPTV subscriptions, will be able to watch specialized channels on areas such as sports, travels, diversity and so on by 2015.
The years to come will see more of the French population covered by the new HD DTT channels.
The Agency, together with the CSA, has the mission to assist viewers in solving their TV reception problems through its call center and its dedicated website, "www.recevoirlatnt.fr", in collaboration with local aerial installers. If necessary, it will grant funding provided by the State to viewers who have lost DTT reception.
What are the expected evolutions as far as new ways of sharing spectrum are concerned? What are their consequences on spectrum management?
First, it is important to recall that spectrum sharing is already a reality with short range devices operating under a general authorization on a non interference and non protection basis. This is the case for Wifi in the 2.45 GHz and 5 GHz bands. This is also the case of all applications using ultra wide band devices which are sharing spectrum thanks to a very low power density. UWB technology was also used in sectors such as automobile and aeronautics.
What about Licensed Shared Access (LSA)?
The objective of an LSA approach is to facilitate the introduction of additional users operating with individual spectrum rights of use in specific bands and on a shared basis with an incumbent user, thus allowing predictable quality of service for all rights holders. These arrangements will need sufficient flexibility in order to account for national particularities, in relation to the administration of spectrum.
LSA could be introduced as a regulatory approach to release spectrum. In addition to conventional planning methods, cognitive radio technologies and their capabilities (geolocation databases, sensing, etc.) could be taken into account as enablers for sharing under the LSA approach.
ANFR engineers are actively participating in European works, at the ECC level for instance, on this issue, which is still in its early stages.
700 MHz band: what are the stakes and constraints?
World Radiocommunication Conference (WRC) 2012 decided that for the Region 1 the 694-790 MHz band will be allocated to mobile service co primary with broadcast services, this allocation becoming effective after WRC-15.
The issues at stake in the preparatory works for the WRC-15 are each tied to technical and negotiated matters. The possible refinement of the lower band edge (694 MHz) is one issue up for debate during the preparatory works. The second stake is the identification of a harmonized channelling arrangement, that is to say, the uplink and downlink bands. Finally, technical matters such as sharing studies between mobile and DTT at 694 MHz and the consequence of this on the necessary guard band are also to be clarified through the preparatory works for the WRC-15.
Regarding the choice, and its consequences, between IMT and broadcast, WRC was the starting point. The next steps are European decisions and national arbitrages.
2013 will be the year of public exposure to electromagnetic fields in France (ANSES report, Abeille Bill…): what is the role of ANFR as far as exposition control is concerned?
First, the Agency has no sanitary or health prerogatives, its expertise and missions only rely on technical matters.
The Agency monitors the respect by radiocommunication network operators of the public exposure to electromagnetic fields limits. The legal limits are the ones of a 1999 European Recommendation. Besides, by Law, the Agency has to make an inventory of "atypical" points, that is, the points where the exposure is significantly above the national average (while still below the limits). ANFR also elaborates the protocol used to measure the public exposure to electromagnetic fields. ANFR is also in charge of devices monitoring (phones, smartphones, tablets…). We insure that DAS limits (2 W/kg) are respected. We also check if the necessary information is properly provided to consumers.
2013 will indeed be the year of public exposure to electromagnetic fields. It began with the Bill introduced by MP Ms. Abeille from the Environmentalist Party. This Bill was forwarded to the Parliament Economic Commission for further analysis.
In 2013, we will publish our report on technical experiments which were lead in France to assess the possibility to reduce public exposure to electromagnetic fields due to mobile operators antennae without decreasing coverage and quality of service. Such experiment is a world premiere until now. 2013 will also be the year when ANSES, the French sanitary authorities, publishes its new report on the sanitary effects of such a field.
The Agency is a neutral, technical expert in that area. By participating in public meetings, advising elected officials and also the general public through its website Cartoradio, the Agency participates in turning this potential concern into a serene public debate. Finally, in 2013 we will provide a mobile version of Cartoradio, with the location of all mobile based-stations and the results of more than 26,000 field measures.
The ANFR organizes an international Conference on June 26 and 27 2013 entitled "Spectrum & Innovation": what is it about?
The Conference "Spectrum and Innovation" was instigated by Ms. Fleur Pellerin, delegated Minister in charge of Small businesses, Innovation and Digital Economy. We want the Conference to be a major event in 2013 for the digital economy sector in general and radiofrequencies in particular. The objective is to show to a large audience of professionals from the digital economy how spectrum is key to their sector and how this resource is crucial to economic growth in the coming years.
Different themes will be dealt with: how mobility is shaping our society and stimulating innovation, how radiofrequencies constitute a growth leverage for industry and small businesses, or even the spectrum needs for 2020. To debate on these subjects only experts in their fields have been chosen. The Conference will also be a chance to listen to influential and renowned speakers: Ministers, European and foreign institutions officials, renowned academics and business leaders (BBC, Bouygues Telecom, Cisco, Eutelsat, France Télévisions, Free Mobile, IBM, M6, NRJ Group, Orange, Qualcomm, Renault, SFR, TDF, TF1…).
We expect these two days to shows us what exciting new developments can be in store in the coming years. The Conference will prove how spectrum can foster innovation, growth and job creation.
Gilles BRÉGANT was born in Chambery in September 1963. He graduated from Ecole Polytechnique (1986) and from Telecom ParisTech (1988). Following an 8-year-career at France Telecom research center, Gilles Brégant was appointed technical adviser to the Minister in charge of Research (1996-1997). He had to coordinate international projects and themes in relation with information technology. He then worked for the department of trade and industry as deputy director in charge of Prospective. He was appointed secretary general of the ministerial task force "Digital Economy" (2001-2005). He was then appointed Technical Director of Conseil supérieur de l'audiovisuel (the French Media Regulator) in 2005. Gilles Brégant is the CEO of ANFR since 2011.
Published in COMMUNICATIONS & STRATEGIES No. 90, 2nd Quarter 2013
- For more information about our activities: www.comstrat.org
COMMUNICATIONS & STRATEGIES
Head of Research, Telecoms Business Unit, IDATE
Deployment costs & access market revenue in Europe
The goals set by the European Commission for ultra-fast broadband (UFB) are ambitious. By 2020, they aim to provide all European households with ubiquitous coverage of 30 Mbps and 50% of households with 100 Mbps access.
Cost of NGN deployment for reaching the goals of the DAE
NGN deployments are underway in all countries of the European Union but are progressing at very different rates from one country to the other. Some governments have created national programs that lay down their own goals to try and accelerate deployments, through both private operators and public players. IDATE has published a report in which NGN deployment costs have been modeled according to various scenarios. We will look closely at three of these: the "Base Case" scenario, which considers a gradual evolution of current NGN access; the "Vectoring" scenario, which anticipates improvements in copper-based technologies to reach the speeds laid out by the DAE; and the "FTTH" scenario, in which FTTH/B would be deployed on a massive scale and would provide the most future-proof performance in terms of speed. This last scenario is itself analyzed according to two different options (90% or 100% FTTH coverage), which lead to significantly different costs. The cumulative costs of these scenarios between 2011 and 2020 range from 71 to 230 billion EUR.
Cost comparison of NGN deployment scenarios en Europe
Revenues tied to the UFB access market
In parallel, IDATE has also conducted a study to evaluate the value of the UFB access market. This study is based on a thorough analysis of UFB services offered by key players in markets that represent different degrees of UFB maturity. This analysis allows us to identify different types of delivery model that may include one or more goals (maintaining positioning, increasing ARPU, reducing churn, unbundling withdrawal, etc.). The commercial positioning of operators will thus match a given delivery type that will depend on the level of competition, in particular. From there, it is possible to determine what the trends will be in terms of UFB ARPU over the coming years and thus assess one of the two key variables of access revenue. The other variable is the number of UFB subscribers, which should continue to grow relatively steadily through 2020 if we take all technologies into account. According to our estimates, the UFB access market is expected to reach 48 billion EUR by 2020.
Costs vs. revenues: Which scenario should we prioritize?
Despite some very interesting revenue potential (combined revenues exceed the cost of the most expensive scenario by 2020), the FTTH scenario is not really feasible (regardless of the coverage option considered) because cable operators—whose infrastructures offer faster speeds, are less expensive to upgrade and offer very good performance—will continue to play a major role in this market. The Base Case scenario seems to be a more feasible option in that it represents a continuation of what currently exists, namely a combination of technologies and accelerating deployment. However, it also presents risks, particularly the possibility of slow migration of broadband subscribers to UFB. Whichever scenario is implemented, operators will still need to invest significantly in deployment while reserving some investment for generating demand, without which their expected revenues cannot be achieved.
Head of the radio technologies & spectrum practice, IDATE
IDATE reveals Latest
World LTE Market research
Sustained growth expected to hit 915 million LTE subscribers worldwide by the end of 2016, and the first billion will be exceeded during 2017.
IDATE, leading analysts and European Internet thinktank, today announced the main trends shaping the world’s mobile markets: networks, devices and services. At the LTE World Summit in Amsterdam (June, 24-26) IDATE provides its latest analyses and forecasts for the world LTE market, and insight into the 700 MHz issue.
World LTE Market forecasts
By the end of 2016, IDATE’s forecast predicts more than 915 million LTE subscriptions worldwide. Asia-Pacific is expected to represent a sizeable 41.6% of the total, North America 21.6%, Africa/Middle East 7.5%, Eastern Europe 4.9% and Western Europe 15.8%.
LTE is now mainstream with major deployments in every geographical area. The TD-LTE ecosystem is still waiting for a decision from China and can anticipate seeing the first LTE Advanced networks during the second half of this year. The 700 MHz band with the APT band plan has already been allocated in countries such as Australia and Japan with intense regulatory activity expected in Europe, Middle East, Africa and Latin America around this new frequency band.
LTE subscribers worldwide (in thousands): Ranking by country at 2016
Source: IDATE, LTE Watch Service, March 2013
The 700 MHz band: A new harmonised frequency band for LTE?
With IDATE’s latest report addressing the 700MHz band issue, this question for future usage of our mobile services must be considered.
The growth of mobile broadband traffic is putting pressure on mobile networks and is driving the need for more spectrum in sub-1 GHz frequency bands for LTE and LTE-Advanced networks. Harmonisation across many geographical areas is crucial as it would enable significant economies of scale for LTE devices and would facilitate international roaming. The first Digital Dividend has already provided new spectrum for the mobile sector. Notably, the 700 MHz band in the USA and the 800 MHz band in Europe are today used for commercial LTE services.
Following the 2012 World Radiocommunication Conference (WRC-12), the 700 MHz now appears the most promising option for a harmonised frequency band across Asia-Pacific, Europe, Middle East, Africa and Latin America. IDATE anticipate further discussions at WRC- 15 and technical conditions have to be defined in Europe before then.
First and second Digital Dividends, worldwide
Asia-Pacific taking th lead in digital dividends
The Asia-Pacific region is taking the lead in this field and has already defined the ‘APT band plan’ which is likely to be adopted in Latin America, Africa, Middle East and Europe. This plan is not compatible with the US plan, which was defined before the 2008 auction and does not allow any compatibility or roaming for future LTE handsets. The 700 MHz band with the APT band plan could become a harmonised frequency band for LTE worldwide.
The 700 MHz band corresponds to the first Digital Dividend in the USA and in Asia-Pacific, whereas it could become the second Digital Dividend in the EMEA region. At WRC-12, African and Middle Eastern countries requested that the 694-790 MHz spectrum be allocated for mobile broadband services.
Europe should not make the same mistake as it did with the 800 MHz band
Many observers insist that Europe should not make the same mistake as it did with the 800 MHz band - where the auctions took place without coordination leading to undesirable early starts in some countries with a limited range of compatible devices. The harmonisation process in Europe should be clear with precise technical parameters and a realistic roadmap taking into account the timetable of existing broadcasting services. 2020 seems to be a realistic target for the launch of LTE services in the 700 MHz band in Europe, but some countries, such as France and perhaps Germany, are already planning to organise auctions as soon as 2015 even though the spectrum will only be available at a later date.
Public safety networks want superior broadband services
Public safety networks, which want to support mobile broadband services, are also starting to use parts of the 700 MHz band in the USA and the UAE have already allocated spectrum for their use earlier this year. Discussions are under way in Europe to address this question.
Innovative auction format in USA
In the USA, the Federal Communications Commission (FCC) has suggested an innovative auction format, called ‘incentive auctions’. The objective is to change the use of UHF band (470-700 MHz) starting with the 600 MHz band and to enable new services on a licensed basis. The process would start with a reorganisation of the UHF band and a re-allocation for licensed mobile services, such as 3G and LTE.
Digiworld by IDATE Related Publications
Digiworld Yearbook 2013 (May 2013)
Innovation searching for the digital gold mines
This latest DigiWorld Yearbook provides you, as always, with reference data and the analyses of IDATE experts of the most vital trends on the markets of telecoms, the Internet and digital media.
The 700 MHz frequency band (June 2013)
This insight focus on the adoption of the APAC plan for the 700 MHz plan. Will this frequency band become an harmonised one? Will Europe adopt this plan and benefit from the device ecosystem? Which timescale?
DigiWorld Economic Journal: C&S No.90, 2nd quarter 2013(June 2013)
The radio spectrum: A shift in paradigms?
Edited by J. Scott MARCUS, Gérard POGOREL & Frédéric PUJOL
two exclusive interviews :
- Gilles BRÉGANT, CEO of ANFR (French national spectrum agency)
- Paul E. JACOBS, Qualcomm's Chairman & CEO Read the interview
Head of the radio technologies & spectrum practice, IDATE
70 million LTE subscribers for Africa and Middle East in 2016
As an official partner of LTE MENA 2013, IDATE delivers its latest insights about the LTE Market in Africa and Middle East.
LTE is gaining momentum: by 2016, there will be a total of 916 million LTE subscriptions worldwide. Our forecasts regarding Africa and Middle East are for 68 million LTE subscriptions at the end of 2016.
World LTE market : LTE deployments stepping up
• We expect that, by the end of 2013, a significant portion of LTE devices will support both FDD and TDD duplex modes. TD-LTE deployments in India, China and many other countries in the Asia-Pacific, Latin American, and Middle East regions and, to a lesser extent, Europe will fuel this growth.
• We anticipate that more than 80% of LTE devices will also support 3G and, in most cases, 2G in 2014.
• A limited number of LTE devices will support Mobile WiMAX in order to facilitate smooth transition for operators switching to TD-LTE.
Middle East & Africa : 70 million LTE suscribers by 2016
• The first LTE commercial services were launched in South Africa, Tanzania and Namibia in 2H 2012.
• Saudi Arabia: the three MNOs – Etisalat-Mobily, Zain Saudi Arabia and Saudi Telecom Company (STC) – launched LTE services in 2011. They were slowed down by the lack of compatible smartphones.
• Our forecasts are for 68 million LTE subscriptions at the end of 2016 in the countries of the Middle East and Africa for a revenue of 20 billion Euro.
Africa Middle East LTE Subscribers forecasts (thousand)
Head of Mobile & Spectrum Practice at IDATE
Global telecom services market to reach over €1,200 billion in 2015
“We have observed that, overall, telecom services are recovering more slowly than the economy as a whole,” reports Carole Manero, head of IDATE’s Telecom Players & Markets report.
Montpellier, 7 May 2013 - IDATE reveals the findings of its world telecom services watch. After a setback in 2009 and very slight growth in 2010, the global market has been inching back to a more solid recovery since 2011, growing by a modest 2.7% in 2012. This translates into telecom services revenue of €1,115 billion for the year.
Now in a recovery phase, telecom markets in advanced countries are proving somewhat resilient, whereas in fast developing markets the increase in volume is so steady that the ripple effect far outweighs any structural obstacles. This phenomenon is telling of a mature industry now driven more by demographics than economics. In Africa/the Middle East, for instance, the drop in regional GDP in 2009 (-6%) and its rebound in 2010 (+16%) had very little impact on telecom services growth rates which remained very high both years: 8% and 9%, respectively.
World telecom services market - 2012
Source : Digiworld by IDATE
Majority mobile access
According to IDATE, the number of mobile customers worldwide should top the 8 billion mark in 2017 (+28.0% in 5 years).
• The number of Internet subscribers will grow more strongly (+37.3 % between 2012 and 2017, +6.5% per year on average), reaching 1 billion by the end of 2017.
• Traditional landlines continue to loose ground in the face of VoIP and mobile.
The spread of broadband
According to IDATE, the number of fixed broadband subscribers is expected to reach 957 million worldwide by 2017, for a penetration rate of 14% of the population. The number of 4G mobile subscribers should experience strong growth.
Two major factors will play in favour of the spread of broadband:
• The success of bundled offers (fixed telephony, VoIP, TV, mobile telephony) and the appetite for video applications.
• The investment of telecom operators in the migration of their infrastructures to mobile or fixed broadband.
Revenues from telecom services
According to IDATE, the global revenues from telecom services will grow from 1,115 billion in 2012 to 1,286 billion in 2017, representing an average annual growth of 2.9% in 5 years.
• Revenues from mobile services will grow by 18.7% between 2012 and 2017 (+3.5 % per year on average), reaching 779 billion EUR in 2017.
• Revenues associated with data transmission and Internet will grow more strongly (+32.8% between 2012 and 2017, i.e. +5.8% per year on average), to reach 329 billion EUR in 2017
• The turnover of fixed telephony will continue to decline significantly (-15.9% between 2012 and 2017, i.e. a decline of 3.4% per year on average), to be at 177 billion EUR in 2017.
Scalability of operators in emerging countries, even if the global top three remains unchanged since 2007
• A single change in the ranking of European operators: Telefonica overtook Deutsche Telekom in 2011: now the leading European operator, the Spanish group ranks fourth in the world.
• Chinese operators regularly win places in the world rankings
• Vimpelcom gained fifteen places in 2011 : Owing to the acquisition of a large part of the shares of Orascom Telecom and Wind, VimpelCom moved from 34th place in 2010 to 19th in the world in 2011
• Several operators from industrial countries "drop out": The Dutch KPN and Canadian ECB fell back by five places in two and a half years and drop out of the top 20
Classement des principaux opérateurs télécoms
Source : Digiworld by IDATE
Five operators in the top twenty worldwide for over 50% of their turnover outside their domestic market:
• Among them, three European operators...
- Vodafone: global operator widely present in Europe, Asia and Africa
- Telefónica: with a widespread presence in Latin America and in some European countries (UK, Germany, Czech Republic, Slovakia)
- Deutsche Telekom: present in Central and Eastern Europe and in several Asian countries
•...and two operators from developing countries:
- America Móvil: present mainly in Latin America (plus participation in Europe acquired in 2012)
- Vimpelcom: already present in Central Asia, with a new presence in Africa and Europe (Italy) thanks to the deal with the Naguib Sawiris group
Chef de projet, IDATE
More information about World Telecom Services
Co-Head of Satellite Practice at IDATE
Perspectives for satellite broadband facing residential LTE offerings
Just as they did with 3G, telcos started to propose residential offers based on LTE, how does it compare with satellite broadband offers?
Residential LTE, a direct competitor to satellite broadband
ust as they did with 3G, telcos started to propose residential offers based on LTE. It’s notably the case of Verizon Wireless in the United States who proposes “Home Fusion” since May 2012, a service that allows households to access broadband via an outdoor LTE antenna installed on one of the walls of the building. The antenna is billed 200 USD but the installation is free. How does it compare with satellite broadband offers? Downloading speeds vary between 5 and 12 Mbps in average with a pricing range going from 60USD for 10GB of data to 120 USD Monthly for 120 GB. With similarities in pricing, downloading speeds and data caps, LTE is positioned as a direct competitor to Satellite broadband.
Residential LTE coming to Europe
In Europe, first LTE offers arrive on the market. The first to propose such services was Netcom, a filial of TeliaSonera, who was first to propose LTE in Norway. It offers 100GB of data for a monthly fee of 68 EUR. According to Netcom, it is very likely that this kind of solution could be considered as a substitute to DSL, especially when the monthly data cap exceeds observed traffic on DSL networks (An average of 30 GB per household). In germany, Vodafone proposes a similar offer since 2012, but this time it is differentiated with quality of service through network speed with prices starting from 25 EUR to 40 EUR monthly to have access to 50 Mbps and 30 GB.
Satellite Broadband: no more competitive?
Considering this kind of offers, satellite broadband is no more competitive, neither on network speed nor on monthly data cap offered. Even though these new offerings materializes the LTE threat for satellite broadband we had foreseen, LTE coverage remains very limited. Anyhow, satellite will have to pursue its downloading speeds increase since 2008 if it wants to maintain a competitive advantage on this market.
Positioning of some satellite broadband offers in France, March 2013
Source: Digiworld by IDATE
Head of the radio technologies & spectrum practice, IDATE
LTE Baseband market: Race for second position & Technology standards ahead
Following Mobile World Congress 2013, the main trends regarding LTE chipsets and devices are as follows:
Qualcomm is by far the unchallenged leader on the LTE baseband market with more than 80% of the market; it is followed by Samsung and its home-grown chipset strategy. Behind, the race is rather more toward the second position than the first. Major baseband vendors seem ready to embrace the market with multimode FDD/TDD LTE solutions, showing that the market has been entering a second phase.
A situation of oligopsony due to mobile phone market concentration
The concentration of the market around Apple and Samsung makes it even more difficult for LTE baseband vendors to attain volume production. It will be difficult to reach Number Two position on the market without a device win between those two players.
Entrance of Chinese and Taiwanese vendors splits the market between high and low end
In this context, the entrance of Chinese and Taiwanese vendors on the LTE baseband market is even more striking. It suggests that the market will split between the lower-end LTE baseband and the higher-end supporting the latest features of LTE Release 10.
Lack of baseband certifications discredits promising technology developements
While new players are readying to enter the market, others, such as ST-Ericsson and Renesas, are finding it difficult to survive. Despite promising technology developments, they may well either close down their business or find a new life in competitor portfolios. Such difficulties highlight the dual importance of baseband certification by carriers and of securing a quick ‘device win’ to enter a virtuous circle, where certification is easier. There, because the baseband is certified, it is more easily selected by device manufacturers.
LTE Devices compatibility: new standards emerging
While most vendors will have multimode LTE Cat 3 baseband in store this year, being able to face the challenges of LTE Cat 4 while still reducing power consumption will make the difference among vendors. By the end of the year, thanks to carrier aggregation, VoLTE should be supported by most advanced baseband with Qualcomm still ahead – their MDM9x25 baseband is already being integrated in devices for releases during the second half of this year. World LTE devices capable of roaming on the 40 different LTE bands are not for today despite impressive progress in the RF front end. In this field, antennas are still a bottleneck but RF solutions due for release soon have already significantly reduced the number of models required to cover the whole world.
Future of LTE devices
Source: Digiworld by IDATE
Senior Consultant Telecom Strategies at IDATE