The 1.8GHz spectrum continues to establish itself as the most attractive one for LTE, as carriers’ attention shifts from their initial obsession with the sub-1GHz ‘beach front’ to a band which balances coverage and capacity, and promises near-global roaming potential in future. It is becoming the dominant band for first-wave roll-outs in Asia-Pacific, either alone or combined with other spectrum, and its importance will grow further as carriers start to implement carrier aggregation.
The GSMA predicts that 1.8GHz will be the dominant LTE band because it is available and relatively harmonized around the world (except in North America), and in many regions, it supports GSM services and can be gradually refarmed for 4G. In the UK, for instance, this allowed the largest cellco, EE, to steal a march on its rivals by deploying in 2G spectrum while the others had to wait for auctions of new licences.
The focus on 1.8GHz was highlighted again this month in the Taiwanese LTE auction, in which bidding for five 1.8GHz units was far more intense than for the four 700MHz and three 900MHz blocks. The total bidding price for the higher frequency assets was twice that for 700MHz as of Monday, at NT$52.405bn versus NT$22.38bn, even though 700MHz is also considered one of the premier LTE bands. This is because it supports broad coverage at cost effective capex with its propagation characteristics, and there is the prospect of harmonized implementation throughout most of Asia-Pacific and Latin America, and possibly also EMEA.
The seven participants in the Taiwan process, which began on September 3, are the 3G incumbents Chunghwa Telecom, Taiwan Mobile, Far EasTone and Asia Pacific Telecom, plus Hon Hai affiliate Ambit Microsystems, and two new telecom companies set up by Taiwanese conglomerates Ting Hsin International Group and Shinkong Group. The last of these has already been eliminated from the bidding however.
Two Asian countries which have been behind the curve in 3G, and so have high growth potential for mobile broadband over LTE, are Thailand and Indonesia. Both are freeing up more 1.8GHz spectrum to address the situation.
There are hopes that the first commercial LTE could appear in Indonesia by year end. Leading cellco Telkomsel says it will deploy up to 400 base stations to run trials in two cities, Medan and Manado, while Indosat is modernizing thousands of its existing base stations to support 4G in its 20MHz of 1.8GHz and 10MHz of 2.1GHz spectrum. Third player XL will also launch its first LTE services in refarmed 1.8GHz after acquiring another operator, Axis, giving it total holdings in this band of 22.5MHz. The government has favored roll-outs in 1.8GHz with bandwidth of 5MHz to 10MHz because of readily available handsets and roaming potential. However, it still needs to permit refarming officially, a move that is expected in November.
In Thailand, the regulator, NBTC, wants to repurpose GSM frequencies in this band, and in 900MHz, in such a way as to encourage LTE-Advanced deployment. It aims to refarm 17.5MHz of 900MHz spectrum currently used by AIS and 25MHz in 1.8GHz previously used by True Move and AIS subsidiary Digital Phone Company. The spectrum will be offered using a ‘package bidding concept’, which allows bidders to make a single bid for a group of licences, which could then be built out in a unified way by harnessing LTE-A’s carrier aggregation capabilities. Thailand, whose 3G market has been held back by political and regulatory disputes, now thinks it could leapfrog straight to LTE-A in some areas. The NBTC is working with the International Telecommunication Union (ITU) to study auction methods, estimate spectrum values and set reserve prices and draft conditions, and could hold the auction in late 2014.
Even though only a few countries, notably South Korea, are yet seeing carrier aggregation used in commercial roll-outs, the combination of 1.8GHz and sub-1GHz spectrum, even without aggregation, is becoming an increasingly common strategy, especially in Asia. According to Tolaga Research, four in 10 LTE roll-outs in Asia-Pacific are in 1.8GHz, and this region accounts for 14% of global LTE deployments. The next most important band is currently 2.6GHz, which also has a high degree of international harmonization, and accounts for 27% of Asian build-outs. In EMEA, a similar percentage, 40%, of commercial LTE networks are running in 1.8GHz, alone or in combination, while 36% are in 2.6GHz.
Around 63% of LTE networks in APAC are single-band while among the multiband deployments, 90% involve 1.8GHz. Meanwhile, refarmed 2.1GHz 3G spectrum is in use in 18% of APAC LTE networks. The most important emerging bands will be TDD options such as 2.5GHz and 2.3GHz, plus 700MHz, which will be auctioned in many countries over the coming year.
Another big market is looking to harness 1.8GHz. Russian regulator SRFC plans to make the band technology neutral during its meeting next week, according to local reports, enabling cellcos to roll out LTE in GSM frequencies. The new rules would include a requirement to launch LTE services in all areas with over 10,000 residents in regions to be covered by licensing agreements. The decision was requested by mobile operators Tele2 Russia and Smarts, which were not allocated LTE spectrum in the recent awards to the big three cellcos and to fixed line incumbent Rostelecom.