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Deploying LTE in

Europe

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Contents
About the author............................................................................................................... 3
Introduction....................................................................................................................... 4

Market overview...........................................................................................................................................4

LTE in Europe...............................................................................................................................................4

Deploying LTE in Europe................................................................................................... 5


MS-BTS.........................................................................................................................................................6
Overlay..........................................................................................................................................................6

LTE deployment drivers in Europe................................................................................... 7


Conclusion......................................................................................................................... 9
Appendix............................................................................................................................ 9

Industry survey.............................................................................................................................................9

MS-BTS deployments................................................................................................................................................. 9
LTE overlay...............................................................................................................................................................10

Network-economics modeling................................................................................................................... 10

Informa UK Limited 2012. All rights reserved.


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2013 Informa UK Ltd. All rights reserved. www.informatandm.com

About the author

Principal Analyst , Dimitris Mavrakis


Area of expertise: IMS, mobile access network technologies, femtocells, backhaul, network APIs.
As LTE is being deployed throughout the world, mobile operators are finding it hard to strike balance between network
investments, new pricing schemes and increasing traffic. Several initiatives are being deployed, including capacity
upgrades, optimization, offload and policies to tackle all of these challenges.
Dimitris Mavrakis is a principal analyst with Informa Telecoms & Media. He is part of the Networks team where he covers a
range of topics including Next Generation Networks, IMS, LTE, WiMAX, OFDM, core networks, network APIs and identifying
emerging strategies for the mobile business.
Dimitris is also actively involved in Informas consulting business and has led several projects on behalf of Tier-1 operators
and key vendors.
Dimitris has over 12 years experience in the telecommunications market. He has a strong background in mobile and fixed
networks and an in depth understanding of market dynamics in the telecoms business. In the past, Dimitris has worked as
a project leader to perform challenging network measurements and has lead a team of researchers to produce pioneering
research and acclaimed publications.
Dimitris has been working for Informa since 2005. In the past, Dimitris has worked as a project leader to perform mobile
network field tests and has lead a team of researchers to produce pioneering research and acclaimed publications during
his academic career.
Dimitris holds a PhD in Mobile Communications and a MSc in Satellite Communications from the University of Surrey.

Contributor
Phillip Marshall, Tolaga Research
Tolaga delivers actionable research for the mobile broadband industry. This research is anchored with extensive market,
technology and regulatory databases that span 190 countries and its Market Explorer platform. The platform uses a
systems based approach to technology and market modeling. Tolaga was established in 2009 and is headquartered in
Massachusetts, USA.
www.tolaga.com

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Introduction
Market overview

garnering success, and there is rising

availability of LTE smartphones are

demand for mobile data services and

helping the technology expand rapidly.

LTE has seen arguably the fastest

smartphones all influences that

growth of any mobile network

promote the adoption of LTE. Initial

Europes mobile market has several

technology deployed so far. With

end-user feedback indicates that LTE

unique properties that make LTE

more than 74 networks live in more

services have been well received and

deployments in the region stand out.

than 30 counties, covering every

that the higher-speed, lower-latency

Network sharing is widespread

populated continent, LTE is enjoying

network offers serious advantages

in the EU, and several operators

the most successful launch of

compared with previous networks.

now share parts of their network

any mobile technology in history,

in a passive or active mode. There

with the most swiftly deployed

are discussions in certain markets

networks. There is a proliferation

LTE in Europe

of LTE-enabled devices in attractive

about regulating network sharing,


which would force operators to

form factors and at desirable price

Despite the success of LTE in many

share part or all of their networks.

points, and nearly all LTE handsets

Asian markets and the US, its

Although network sharing reduces

are smartphones, which provide

growth has been slower in Europe

costs, the strategy, governance and

operators with more opportunities

due to regulation, license-auction

integration involved often make it a

for profitability. According to

delays and the wide and dense

Informa Telecoms & Medias LTE

deployment of HSPA networks.

forecasts, there were 62 million LTE

TeliaSoneras LTE network in

bands in Europe appear to be

subscribers at end-December, and

Sweden was the worlds first to be

800 and 2600MHz and 1800MHz,

this number is expected to increase

turned on, in December 2009, but as

which seems to be considered a

to 133 million in just a year.

of June 2011 the country had fewer

key global LTE band. Operators

complex task.
LTE spectrum: The key LTE

than 10,000 subscriptions. This

generally prefer lower bands,

However, this kind of success does

slow growth was due largely to the

which have better propagation

not come without challenges: Ninety

fact that only portable LTE devices

characteristics, meaning that

percent of the LTE market is held by

(USB dongles and MiFi units) were

they can offer good coverage with

five operators, and certain regions

available, at higher pricing than 3G.

fewer cell sites. Some operators

are lagging due to reasons including

Nevertheless, TeliaSonera reports

have already been awarded

unclear regulation and spectrum-

that deploying LTE first was the

spectrum, some are waiting

license delays. Nevertheless, certain

most brand value accretive action

for spectrum auctions before

operators are providing learning

we have taken, and other LTE

they begin to deploy LTE, and

experiences for the whole market,

early adopters have made similar

some are attempting to refarm

the leaders being Verizon Wireless,

statements.

existing spectrum, such as the

AT&T and those in South Korea,

1800MHz band, which has been

where operators have already

The European market has its own

used for 2G/3G. Existing unpaired

deployed LTE to cover almost all of

peculiarities, as do most global

spectrum assets might also be

the population.

regions. Densely deployed HSPA

used for TD-LTE networks in the

networks, saturated markets, a

future. Unlike in regions that have

LTE has arrived at an appropriate

fragmented spectrum landscape

clearer conventions for spectrum

stage of the evolution of mobile

and the wide availability of fixed

use such as the US, where LTE

operator business: Users are

networks have made the rollout of

is in the 700MHz band Europe is

becoming more aware of the benefits

LTE throughout the region slower, but

fragmented, and some spectrum

of data services, OTT applications are

rises in the demand for data and the

auctions have yet to take place.

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

3G-network density: Countries in

mobile operators, since spectral

There have been several notable

Western Europe and several in

and network efficiency is a key

LTE-network launches in Europe

Eastern Europe are characterized

concern as the market becomes

(see fig. 1).

by dense HSPA deployments,

more data-centric.

which have provided adequate


capacity for mobile subscribers.

Fig. 1: Notable European LTE-network launches

But deploying LTE has been

Operator (country)

considered a strategic objective,

TeliaSonera (Sweden)

Dec-09

USB dongles and MiFi only

and several operators have started

Vodafone (Germany)

Dec-10

Rural deployment first

Yota (Russia)

Dec-11

Wholesale network

2600MHz

EE (UK)

Oct-12

Only UK LTE network

1800MHz

deploying it without clear visibility


of pricing models and business
opportunities. As of 2013, LTE has
become a major objective of all

Launch date

Details

Band
800/1800/2600MHz
800/2600MHz

Source: Informa Telecoms & Media

Deploying LTE in Europe


Mobile operators have been skeptical

in parallel with modernization efforts,

have taken steps to optimize their

about the value proposition of

especially in cases where aging legacy

infrastructure before deploying LTE

LTE, especially due to the fact that

2G/3G networks were increasing

networks, mainly by consolidating

monetization of 3G came much later

total cost of ownership (TCO) and

existing 2G/3G infrastructure into

than expected and was challenged by

modernization offered an opportunity

a single platform, often referred to

license costs, low technology maturity

for cost savings. Fig. 2 illustrates a

as a Multi-Standard Base Station

and overall slow development of the

decision tree when deploying LTE and

(MS-BTS) platform. But MS-BTS

ecosystem. These factors have since

with different options operators could

platforms deployed for 2G/3G might

been addressed, however, and the

take advantage of to deploy LTE.

require considerable investment

LTE ecosystem is seeing healthy

to upgrade to LTE, which requires

growth across chipsets, devices and

A major factor inhibiting LTE

new antennas, Remote Radio Units

network infrastructure, alleviating

deployments in Europe and other

(RRUs) and manual installations.

operator concerns.

areas, including Japan and South

Costs are even higher when using

Korea is the presence of widely

4G spectrum that does not overlap

Apart from deployments that are

deployed legacy networks. With the

with 2G/3G frequencies. For

driven by regulation, LTE networks in

aim of reducing the cost of running

example, 2.6GHz LTE deployments

Europe have primarily been developed

legacy infrastructure, operators

often require new RRUs, antennas,


baseband units, manual upgrades
and, most likely, new cell sites to

Fig. 2: LTE-deployment options for legacy networks

LTE deployment

satisfy coverage requirements,


boosting the deployment cost

Legacy 2G/3G
network

MS-BTS for
2G/3G

Add LTE payload


in MS-BTS
Add LTE
overlay

an MS-BTS deployment.
This white paper discusses two

MS-BTS for
2G/3G/LTE
Source: Informa Telecoms & Media

considerably despite the existence of

options for deploying LTE: Multi


Standard Base Stations (MS-BTS)
and LTE overlay, which refers to
adding new equipment at cell sites

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

for LTE. An operator choosing to

simultaneously. Assuming that an

share RRUs between 2G, 3G and

deploy LTE with a legacy 2G/3G

MS-BTS is providing service for

LTE for the same frequencies

network has several possible paths

different technologies, the following

after refarming. In most cases,

to choose from.

elements are usually deployed:

new RRUs are necessary to

Integrated baseband unit (BBU):

enable LTE in existing MS-BTS

Although overlay usually refers

The baseband unit is responsible

to specific additional equipment

for processing and converting

used to enable an air interface, the

digital signals. It is usually in the

antennas are band-specific and

infrastructure could be an MS-BTS

form of an upgradable platform,

need to be upgraded if LTE is

with specific functionality enabled,

where new cards (or blades)

deployed in new frequencies.

which can enable modernization of

can be introduced to cater for

the network in later stages while

increased utilization or new

satisfying the current need for a

protocols. Typical MS-BTS BBUs

quick LTE rollout.

may be made compatible with

In overlay deployments, new

LTE through software upgrades,

hardware is installed in existing

though in many cases a hardware

base stations without affecting

upgrade is necessary due to the

the existing infrastructure or

increased functionality required by

network operation. The operator

LTE eNodeBs.

is able to procure equipment from

MS-BTS
MS-BTS platforms are deployed

deployments.
Antennas: Similar to RRUs,

Overlay

Remote Radio Unit: The RRU

any vendor, not just the existing

operate in similar frequencies and

includes RF equipment and

MS-BTS provider. The following

at the same cell sites. For the most

converts digital signals to RF for

figure illustrates a brief comparison

part, vendors have accordingly

transmitting, and vice versa for

of MS-BTS and overlay deployments

chosen names for their technologies

receiving. RRUs are band-specific,

for European networks (see fig. 3).

that reflect the fact that a

meaning that new LTE frequencies

single base station can provide

need new radio units. But there

Both deployment strategies

service for different technologies

are some cases where networks

offer specific advantages and

when several networks have to

disadvantages, and the decision


Fig. 3: Comparison of LTE-deployment strategies
Bevnefits

Challenges

of which to use is affected by

LTE overlay

Single RAN

several parameters, including LTE

Speed of deployment

Lower site rental cost

spectrum, legacy-network age,

No network disruption

Lower power comsumption

whether a modernized network

Lower capex

Cell-site simplification

has been fully depreciated, vendor

Potentially higher opex

Requires existing network renewal


(downtime and potential disruptions,
additional optimization and training)

Multiple platforms to manage

Vendor lock-in

Source: Informa Telecoms & Media

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

relationships and many others. But


the European market is now at a
stage where an overlay is becoming
a valid competitor to MS-BTS
platforms for LTE deployment.

LTE deployment drivers in Europe


Several operators have already

Fig. 4: What is the most important benefit of deploying an MS-BTS platform?

modernized their existing networks,


35

2G and 3G deployments. Many of

30

these modernizations have taken

25
20
15

12

a decommissioning fee, which can be


substantial especially if considering
stand-alone (non-MS-BTS)
platforms. In many cases, mobile

Other
(please specify)

cannot be removed without suffering

alone platforms until they are fully

10

Hardware reuse
for different air
interfaces

5
Lower CAPEX
and/or OPEX

might not be fully depreciated and

operators continue to operate stand-

12

10

Ability to support
future spectrum
refarming

As such, these modernized networks

30

Lower site costs


(including power)

900MHz, 1800MHz and 2.1GHz bands.

31

Network
simplification
one platform
to manage

place over the last five years, in the

Response (%)

with a focus on reducing opex for

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

depreciated, after which they might


be considered for replacement.

Fig. 5: Forecast cumulative gain in net present value of an LTE overlay relative to MS-BTS
800

reductions in capex and opex are the


advantages most frequently cited by
European operators for deploying
LTE through an MS-BTS platform
(see fig. 4).
An overlay decouples modernization

NPV gain (US$ mi.)

Simplification of the network and

700
600
500
400
300
200
100
0

12

18

24

efforts from network deployment,


which results in a faster and less
disruptive network rollout and might
also delay modernization. Operators

30

36

42

48

54

60

66

72

Simulation month
Dominated by the
negative impact of
multi-standard RAN
upgrade

Dominated by the positive impact of reduced power consumption,


OA&M and ground lease costs for multi-standard RAN

with aggressive LTE deployments


have reported that traffic over their

Source: Informa Telecoms & Media, Tolaga Research 2013

3G networks is declining in favor


of LTE, which in turn reduces the

of TCO will come from upgrades,

in many cases lower than that of an

pressure to modernize. A simpler

which applies to both MS-BTS and

MS-BTS (see fig. 5).

network deployment is also a

overlay cases. Moreover, adding

major advantage in markets where

functionality to a platform that is

Another major operator concern

regulations and permissions for

already operating and providing

is vendor lock-in, which is a

work at cell sites are strict.

connectivity to subscribers might

considerable commitment with most

lead to unplanned downtime,

MS-BTS platforms. An operator

Although opex savings can be

which might be considered a risk.

becomes tied to the vendors strategy,

achieved by consolidating 2G/3G

According to Informas financial

including infrastructure upgrades,

and LTE base stations, the majority

modeling, the cost of an overlay is

which usually keep pace with market

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

developments but could fall short due

Network sharing is a major force

sharing pose a considerable

to changes in vendor strategy.

behind network deployments,

challenge for operators. In cases

and its importance is expected

where operators are already

Reliability of the network and vendor

to increase. Active sharing

participating in active-sharing

lock-in are among the top concerns

arrangements provide the most

arrangements, they need to jointly

related to MS-BTS deployments

economic benefits but require

decide to upgrade the platform to

cited by European operator

operators to be in similar market

new technologies, including LTE.

respondents to our industry survey

positions, e.g., using similar

In many cases, an overlay strategy

(see fig. 6). Another major concern

bandwidth and frequencies. Passive

is considered a more effective

linked to vendor lock-in is financial

sharing is expected to be more

option, enabling each operator to

stability, in cases where several

popular, because the integration,

meet its strategic objectives without

vendors are subject to hostile

governance and cultural and

having to wait for its active-sharing

market environments and their

strategic issues linked to active

partners to move in parallel.

future is not clear.


Fig. 6: What is the most important challenge when deploying an MS-BTS platform?

The biggest advantage of a network


overlay is speed of deployment. It is

35

usually much faster than deploying

30

an MS-BTS and replacing legacy

25

19

20
15

12

competitive advantage. A quick

0
Complete
vendor
lock-in

in many cases gives it a major


deployment also gives operators
extra time to consider the strategic
impact of an LTE network, which is
especially useful when considering

Other
(please specify)

10

May require
significant upgrades
for additional air
interface (e.g. new
spectrum)

LTE services the soonest, which

27

Reliability issues

an overlay, the operator can offer

33

Downtime required
for replacing
existing network
infrastructure

networks. By deploying LTE through

Response (%)

the value proposition of LTE


in Europes volatile economic
environment.

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

Conclusion
Our research, modeling and survey

Europe are expected to follow

Other benefits of an overlay include

illustrate that LTE overlay is

similar steps and include overlay

not being locked in to a single

considered a viable alternative to

as an element of LTE-network

vendor, a lack of network disruption,

MS-BTS. Several operators across

deployments.

greater reliability and, in many cases,

the world, especially in the US,

a financial advantage over MS-BTS.

Japan and Korea, have deployed

Many of their counterparts in

LTE by overlaying on existing

Eastern Europe are expected to

Both deployment strategies

infrastructure and, in many

follow, given that LTE adoption

offer specific advantages and

cases, have enjoyed a competitive

in that region is slower than in

disadvantages, and the decision of

advantage by being first to market.

the more developed markets of

which to use is affected by several

Many operators in Western

Western Europe.

parameters.

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Appendix
Industry survey

operators and 43 hybrid operators,

This is somewhat expected, since

with both fixed and mobile assets.

operators in Western Europe expect

To gauge market perception of LTE

Asked if they had an LTE network

faster take-up of LTE services due

launch strategies and understand the

live or pending launch, a staggering

to higher demand for mobile data,

state of European networks, Informa

96.3% of European operators

and they rely on a faster deployment

has launched an industry survey that

answered in the affirmative, with

strategy. The results illustrate that

includes broader questions regarding

only 3.7% stating that they are not

developed markets are more likely to

LTE. Those that are relevant to this

planning to launch LTE. Method of

rely on overlay deployments for LTE.

study are presented here.

deployment was evenly split among

MS-BTS deployments

the three options (see fig. 7).


The survey had 442 respondents,

Questions about MS-BTS platforms

of which 112 were operators

Western European operators were

revealed that cost savings and

based in Europe. Of these operator

biased toward overlay and those in

network simplification are the major

respondents, 68 were mobile

Eastern Europe toward MS-BTS.

incentives for operators to take such


an approach. The ability to reuse
hardware for future technologies

Fig. 7: What is the primary deployment mode for your LTE network?
Only using small cells
1%

was cited by surprisingly few

Other (please specify)


4%

respondents, as was support for

Replacing a legacy 2G/3G


network with a MS-BTS platform
supporting LTE as well
31%

Overlaying LTE in an existing


network deployment
32%

future refarming efforts.


Regarding the challenges of
deploying LTE through a MS-BTS
platform, the most operators
cited vendor lock-in and network

Adding LTE in an existing MS-BTS deployment


32%

downtime. Future upgrades scored


only 12%. The responses about
MS-BTS deployments imply that even

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

though the technology is usually


positioned by vendors as futureproof, meaning it offers cost savings

Fig. 8: What is the biggest benefit of deploying LTE through an overlay?


35
30

not take that into account. And


23

25

they do not appear to consider the


19

20

additional costs of introducing new


15

15

air interfaces a major challenge for


10

10

MS-BTS, indicating that they are

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

Other
(please specify)

consolidate legacy networks rather


Legacy network
is tried and tested

Lower CAPEX
compared to
Single RAN

deploying these base stations only to


Higher
network
reliability

5
No 2G/3G
service
interruption

Response (%)

on future hardware, operators do

32

than to cater for future technologies.

LTE overlay
Respondents cited service interruption
and network reliability as the main
benefits of an LTE overlay (see fig. 8).

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Other answers included the ability to

When asked for the most important

due to specific market and operator

deploy LTE at any time rather than in

technical aspect of an LTE network,

conditions, overlay appears to be

parallel with a modernization effort

an overwhelming 60% chose cell

a viable deployment method for

coupled with MS-BTS.

throughput, and when asked which

LTE despite the trend for network

future capability of the technology is

modernization and platform

The need to manage multiple

the most important, 36.8% answered

consolidation.

platforms and interoperability

LTE-Advanced, followed by VoLTE,

problems with the existing core

with 30.3%.

network were the most frequently

Network-economics
modeling

cited challenges when deploying

The survey results chime with the

an overlay (see fig. 9), with a rise

analysis findings presented above

in opex and the need for multiple

and reflect the market state in

A simulation model was developed

vendor relationships cited by fewer

Europe. Although each deployment

to compare the economics

respondents.

must be considered independently,

of MS-BTS and overlaid LTE


architectures, based on a real
operator in a leading European

Fig. 8: What is the biggest benefit of deploying LTE through an overlay?

market and using the following


35

At the time of the LTE

23

25

implementation, the 2G/3G

19

20

radio equipment had already

15

15

10

10

been modernized and operated


multicarrier RF equipment.

Other
(please specify)

Legacy network
is tried and tested

2013 and assumed that an LTE

Lower CAPEX
compared to
Single RAN

The simulation started in January

Higher
network
reliability

5
No 2G/3G
service
interruption

Response (%)

general assumptions:

32

30

overlay had commenced six


months earlier. The simulation
covers a six-year period.
The network consists of 2G
GSM/EDGE, 3G UMTS/HSPA
and 4G/LTE. The 2G GSM/EDGE

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

network uses 24.8MHz of 900MHz


and 10MHz of 1800MHz radio

Fig. 9: What is the biggest challenge when deploying LTE through an overlay?
30

spectrum. UMTS/HSPA operates


in the 2.1GHz 3G band with 20MHz

30

bandwidth. LTE operates in the

24

25
Response (%)

800MHz band with 20MHz, the

19

20

1800MHz band with 30MHz and


15

15

12

10

the 2600MHz band with 40MHz.


The LTE network is deployed
initially to maximize coverage and

expanded into higher frequency

Note: Responses from survey of 112 European operators.


Source: Informa Telecoms & Media

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

Other
(please specify)

Legacy network is
tried and tested

Lower CAPEX compared


to Single RAN

Higher network
reliability

0
No 2G/3G service
interruption

10

bands according to capacity


demands.
Mobile traffic is estimated on
a per-device basis for nonsmartphones and smartphones,
and connected tablet, laptop
and e-reader devices. A general
category is used to estimate

11

Fig. 10: Forecast subscriber and network traffic over six years
Downlink network bandwidth
HSPA(+)

Downlink network bandwidth


UMTS

Downlink network bandwidth


GSM/EDGE

600

1800

500

1500

400

1200

300

900

200

600

100

300

12

18

24

30

36

42

48

56

60

66

Average data traffic


per user (Mbps/mo.)

Downlink network bandwidth


(Gbits/second)

Downlink network bandwidth


LTE

72

Simulation month
Source: Informa Telecoms & Media, Tolaga Research 2013

the average traffic generated

Fig. 11: Forecast base-station requirements over six years

by M2M devices. Data and voice


35

the differing population densities

30

area. Bandwidth usage caps are


assumed across the forecast
period and form the basis for
determining the upper limits
of per-device traffic. Network

Total base stations (000S)

lognormal distribution to reflect


across the network-coverage

UMTS/HSPA

GSM/EDGE

traffic is skewed using a modified

LTE

25
20
15
10
5
0

12

18

24

dimensioning is based on peak


traffic demands.
An Okumura-Hata radio-

30

36

42

48

54

60

66

72

Simulation month
Source: Informa Telecoms & Media, Tolaga Research 2013

propagation model is used to


predict network coverage and

of 258MB a month to 1.5GB per

to be required after six months.

combined with a radio-capacity

month over the six years, covering

The demand for LTE base stations

model to predict the number of

both mobile devices and connected

increases throughout the forecast,

base stations needed and their

computing. Average voice-service

reaching 30,300 after six years.

associated output powers. Four

use per user is assumed to remain

categories of base stations are

constant at 130 minutes a month.

used, including high-power,

The network-deployment scenario


studied in this report reflects

medium-power and low-power

The forecast traffic was applied

that of many mobile operators, by

macrocells and microcells. Each

to a network model to predict

incorporating three radio-technology

base-station category is defined

radio-base-station requirements

generations GSM/EDGE, UMTS/

in terms of antenna height, output

(see fig. 11). Two scenarios where

HSPA and LTE spanning five

power, receiver sensitivity and

analyzed, one in which GSM/EDGE

frequency bands. Because the

average number of sectors. Small-

base stations were decommissioned

majority of network costs are due

cell and Wi-Fi offload is used to

after three years and on in which

to radio-base-station operations,

moderate large-cell demand.

the GSM/EDGE cell sites remain in

mobile operators are eager to

place. Data traffic is assumed to be

optimize their radio-infrastructure

Fig. 10 shows forecast subscriber

aggressively migrated to LTE over

costs. Many operators have replaced

usage and downlink data traffic on

the first 8-12 months of the forecast.

obsolete infrastructure and are

the network. Data traffic per user is

As a result, no additional UMTS/

carefully evaluating LTE-deployment

forecast to increase from an average

HSPA(+) base stations are assumed

strategies.

2013 Informa UK Ltd. All rights reserved. www.informatandm.com

12

The financial impact of an LTE

implementation. At its peak,

ground leases by 7%. The gains

overlay is compared with an

the cumulative NPV benefit for

begin to be reflected after 19

equivalent MS-BTS implementation

LTE overlay is forecast to reach

months.

using a marginal discounted-

US$601 million.

cash-flow analysis, to forecast the

As the MS-BTS is implemented,

The results indicate that for a

cumulative benefit in net present

it offers cost savings through

modernized 2G/3G network, an

value (NPV) of an LTE overlay

reductions in power consumption;

MS-BTS implementation does not

relative to a MS-BTS deployment.

lower operations, administration

achieve a positive return relative to

The results demonstrate the

and maintenance costs; and

an LTE overlay architecture even

following:

slightly reduced site-lease

after seven years, and they illustrate

For the first 19 months of

costs. The MS-BTS base stations

that mobile operators must carefully

the simulation, the MS-BTS

are assumed to use up to 50%

evaluate the total cost of ownership

architecture is more costly

less power, incur 60% lower

for alternative network architectures

because it requires 2G and 3G

operations and maintenance

before pursuing LTE-network

upgrades in addition to LTE

costs and bring down the cost of

upgrades.

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