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Opinion Piece LTE ecosystem falling into place for Africa – 3 years to critical mass for the continent?

24 March 2014

By Eckart Zollner, Head of Business Development at Jasco

Long Term Evolution (LTE) technology is taking shape. It’s the next big evolution in communication technology, taking us from 3G to 4G. The experience is, in an all-LTE world, “all IP, all the time” with throughput of up to 100Mbps. The LTE user is always connected wirelessly to fast, responsive, reliable data, broadcast quality video content and services, and now also voice over IP. But that world is three to five years away. There are key challenges in this evolution to LTE for South Africa, Africa and globally. There are also some landmark advances.

According to the Global mobile Suppliers Association (GSA), there are currently 274 commercially launched LTE networks in 101 countries, and 456 LTE network commitments in 135 countries. More than 1240 LTE-ready devices -- smartphones, tablets, modems – have been announced. Yet LTE services today only make up a fraction of mobile services. Of the 5.976 billion mobile subscriptions globally in Q3, 2013, only 157.7 million were LTE subscriptions says Informa Telecoms & Media research. The 65 percent LTE coverage envisioned by 2019 (an Ericsson prediction) seems a long way away.

The greatest challenges in the rollout of LTE reside in bringing together all the components that make up the LTE ecosystem – the LTE-enabled devices, the new hardware that makes up the LTE networks (radio, backhaul and core), the applications, and possibly the most critical part – the operational support systems and services.

Like any emerging technology, the pace of LTE rollouts and adoption is expected to accelerate, however. The signals being sent by large operators globally are good, despite challenges.

The LTE rollout challenges

Key challenges to the rollout of LTE are spectrum allocation delays, capital costs associated with the establishment of LTE networks, the LTE-readiness of devices, user awareness of LTE services, and core network capabilities.

Globally, numerous operators have adopted LTE, aggressively marketing these services. In South Africa, all the major network providers have rolled out LTE commercially, albeit only in key metropolitan areas. The slow rollout is thanks to two key issues: the readiness of handsets and failure of regulators to free up spectrum in the lower frequency bands–800MHz, 2.6GHz and 3.5GHz.

At present only high-end smartphones are LTE enabled, limiting user adoption of LTE. LTE chipsets that are needed for handsets are still expensive but are set to reduce in cost drastically over the next 3-5 years. Failure of regulators to allocate spectrum for LTE is also seeing network providers cannibalise existing networks to launch LTE offerings. In many instances spectrum is just not being freed up. In South Africa, for example, the switch to digital broadcasting is a year late, with analogue broadcasters still occupying the 800Mhz spectrum.

The future role of LTE and the benefits it will offer are undeniable, however, and operators are moving ahead with infrastructure rollouts.

LTE in Africa – partnerships, finance and sharing of core networks

LTE is going to be particularly beneficial in Africa with its low fixed line infrastructure build out and high population densities, offering network operators’ greater reach and affordability. LTE is an ideally suitable technology for last mile broadband connectivity. Governments are putting the right regulatory environment in place to drive LTE rollouts but for network providers partnerships are proving vital to meet entry costs. Many partnering alliances are already in place, with sharing of LTE transmission technologies and fibre backbones occurring as larger operators upgrade to LTE and extend the fibre networks that facilitate access between towers and to international bandwidth via various undersea cables.

In addition, a number of experienced solution providers are now providing LTE solutions and doing system integration, offering a one-stop plan-design-deploy-commission service, and bringing finance to the table. This makes it easy for operators to introduce LTE services.

In fact, LTE lends itself to use by second-tier players.

LTE opens to tier-two players, with core infrastructure by 2016

Where 3G infrastructure required significant investment by network operators, the pricing and nature of LTE infrastructure allows smaller players to get a foot in the door to roll out their own network.

LTE can operates in lower frequency bands. But in higher frequency bands it has less reach. It therefore makes use of more network elements than 3G. However, it can service a higher number of concurrent users (up to 200 per cell), providing them with greater throughput and quality of broadband. As these smaller networks join up, LTE coverage will quickly grow.

By mid-2016, key concerns about core infrastructure - the network intelligence needed for traffic switching, subscriber identification and authentication, management of firewalls, security, billing, and the like - are also likely to be addressed. Concepts for core infrastructure sharing are on the cards. This is a vital piece of the LTE puzzle, especially for smaller players. As the one-stop solution providers and global players with the necessary experience and capability invest in this infrastructure, it becomes accessible to second tier operators, enabling their service offerings and providing the necessary layers of security, reliability and billing capability.

Security a factor to consider with LTE

LTE offers true mobility - there is no hand off as between WiFi hotspots – LTE is made for roaming, with overlap between networks giving users not only high speed, but always-on connectivity. This raises concerns about security for the user as well as network provider. On high capacity all-IP networks where signals are exchanged between numerous LTE towers, huge amounts of data are being exchanges. Data privacy and security, as well as the dangers of hacks or introduction of viruses are being raised. While there is security built into the technology, it is wise for users and network operators deploying LTE solutions to remain vigilant.

LTE to reach tipping point by 2017

LTE will gain momentum with spectrum allocation providing a great boost to rollout of networks. Within three years, a tipping point is expected to have been reached. While operators will continue to maximise return on existing 3G and other networks, the migration to LTE will be in full swing by 2017.