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Roll Out of LTE Progress & Challenges

Roll Out of LTE Progress & Challenges . By DR T.H. CHOWDARY Director: Center for Telecom Management and Studies Fellow: Tata Consultancy Services Chairman: Pragna Bharati (intellect India ) Former: Chairman & Managing Director Videsh Sanchar Nigam Limited &

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Roll Out of LTE Progress & Challenges

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  1. Roll Out of LTEProgress & Challenges By DR T.H. CHOWDARY Director: Center for Telecom Management and Studies Fellow: Tata Consultancy Services Chairman: PragnaBharati (intellect India ) Former: Chairman & Managing Director Videsh Sanchar Nigam Limited & Information Technology Advisor, Government of Andhra Pradesh T: +91(40) 6667-1191(O) 2784-3121® F: +91 (40) 6667-1111 hanuman.chowdary@tcs.com Keynote address @ IETE : 11th Sept 2012

  2. Man in Search of Speed • Running ( Marathon) • Horse • Bicycle • Steam/ diesel /electric locomotives on rails • Automobiles on roads • Aeropelanes in the sky • Rockets into space S673 _Sept'12

  3. Information Transport • Post Office • Telegraph/Telex • Telephone • Radio • TV • Internet • Mobile phones • Communications Satellites • Optical Fiber • Digitization, Packet switching , Routers, Compression, Encryption S673 _Sept'12

  4. Mobile Penetration in the Last Decade Per 100 Inhabitants Source: Voice & Data, Sept 2011 and IT U World Telecoms/ KT Indicators Database * Estimates S673 _Sept'12

  5. Information traffic grows exponentially • Globally the number of mobile internet users will surpass desktop users by 2015 • Smart phones, social networking, video on demand, video streaming, e-education, e-books, mobile video conferencing • BOYD (bring your own device) • Push up information storage & transport S673 _Sept'12

  6. Generations of mobile systems • 1G, 2G,3G, 4G and LTE (long term evolution) • Digitisation • Computer Switching ( Routers), MPLS ( multi protocol label switching ) • Modems (analogue – 4kbps, 16 kbps) • BB (Broadband), 64 k, 256k, 2MBPS, 8 MBPS, 100MBPS ,(N GBPS) S673 _Sept'12

  7. Evolution for Data Access S673 _Sept'12

  8. Spectrum Requirements S673 _Sept'12

  9. Radio Spectrum- Bands & Frequency S673 _Sept'12

  10. Limited Spectrum for Mobile Broadband 1 MHz 10 MHz 100 MHz 1 GHz 10GHz 75 meters 7.5 meters 0.75 meters 7.5 cm 75mm S673 _Sept'12

  11. LTE deployment • Mid 2009 TeliaSonera in Norway and Sweden • Sept 2010 Metro PCS –USA • Dec 2010 Verizon –USA • Nov 2010 Hong Kong: CSL • Dec 2010 DoCoMo –Japan • APril2011-SMART Philippine • July 2011- SK Telecom -Korea, Telestra- Australia, SingTel-Singapore • 3 Jan 12-South Korea -KT • Jan 2012- 40 Networks in operation in 29 countries • 229 commitments for deployment in 79 countries • India augure in1 4 cities in MP and Chattisgarh in Q1-12 • Currently there are 197 LTE enabled devices from 48 manufacturers • MTNL in Delhi & Mumbai in Q1-2011 (MTNL & BSNL allotted 3G spectrum even before auction but they required to pay what the auction determined) S673 _Sept'12

  12. Tower Requirements • India ‘s population density – 150 (Andaman); Delhi -1800 per sq. mile • 1000 subscribers per tower • One tower for 6 sq.miles to 18 towers per sq.mile • MBPS per tower for 2G-40; for 4G-800 • India has 4,50,000 towers • Tenancy ratio required :2 to 3 per tower • To reduce radiation to less than 1 wt per sq. mtr we need at least 25,000 more towers at a cost of Rs. 7,500 cr. • Local bodies and property owners are becoming hungry wolves and clearances are costing huge monies S673 _Sept'12

  13. Back -haul • 1.5 to 2 GBPS from each tower • Terrestrial microwave is less expensive than Optical Fiber systems (digging and resurfacing costs are a source of unearned income for local bodies and highways) • Both TDM and IP traffic require back-haul • Encapsulation : Ethernet is cheaper than MPLS which is superior S673 _Sept'12

  14. Broadband wireless access (BWA) (1) • The spectrum auction in June 2010 netted $ 8.4 bln (Rs. 40,000 Cr) (the 3G netted Rs. 68000 Cr) • Target for broadband subscribers by 2014 – 100 mln • Only Reliance Infotel has nation wide licence (cost $ 2.74 bln ) • Aircel has a spectrum in 8 circles, Airtel and Qualcomm in 4 circles each; BSNL all over India • LTE ready equipment vendors - Nokia Siemens networks, Huawei, Alcatel Lucent & ZTE • WiMax is also LTE technology and some a re deploying it. • FD, LTE & TDLTE S673 _Sept'12

  15. Broadband wireless access (BWA) (2) • 132 operators in 56 countries are now investing in LTE • 45 networks are in operation now • Reliance uses LTE-TTD (time division duplex) • Qualcom (which ha s licence in 4 circles) supplies equipment to every operator promotes TD-LTE in competition with WiMax • Qualcom has multi mode chip sets which enable equal footing for services in 2G, 3G and BWA • Aircel demonstrated high definition video streaming and three way video conferencing using inter-operable TD-LTE dongles • Speed 110 mbps and low latency of 10-20 milli sec . S673 _Sept'12

  16. Monies raised through spectrum auction • 3G – Rs. 68,000 Cr • Broadband – Rs. 40,000 Cr • Reliance Infotel (Mukhesh group) – 4G Spectrum in June 2010 @ Rs. 4,800 Cr Investment to be made Rs. 27,500 Cr • Content creation : 15% to creator; 15% to aggregator; 70% to Telcos but Reliance Infotel will pass on 50% to Telcos and aggregator • Content- video on demand, live video, mobile video conferencing, e-education(bought online tutoring company extra marks education pvt.) , network 18 TV content, triple play ( voice, entertainment and education) • Technology used: (TDD)- time division duplex- LTE will provide voice service through applications like Skype and Viber S673 _Sept'12

  17. Auctioning Spectrum is disastrous • Gamblers instinct • First mobile service licences were auctioned • Fantastic “upfront paid “ bids led to near death of Telcos • Telcso migrated to revenues share in 1999 • Right thing to do - invite bids for revenue share and not for spectrum price • DOT/government has stake in Telcos wellbeing • DOT/gov take equity in Telcos to control • Money made is squandered on “Feed and breed” welfare programs • About 30% of what users pay and tax on profits go to government • Telecom R&D, and indigenous manufacturing languishing • Defense, security , infrastructure are starved S673 _Sept'12

  18. Should Spectrum be Priced? • Like air it is an inexhaustible resource , which can be used again and again all the while Infrared, ultra violet, x-ray….. • Solar power • Sun’s light rays spectrum is not sold • The product that is electricity is sold • Devices convert sunlight to electricity are sold and taxed . So only products and services derived from spectrum should be sold . • Take Nitrogen from air and produce fertilizer what do you sell /tax? S673 _Sept'12

  19. Industry Woes (1) • Telco Revenues @ Rs. 1.5/2 Tln. • Telco Investments of = Rs. 3 Tln • Telcos debt Rs.3 Tln • Debt of Telcos to Banks Rs. 1,00,000cr (R-Com = Rs. 35,000 cr) • Profits are declining • ARPUs lowest in the world • Hyper competition • Services customers • Sickness for companies • DOT/TRAI-function? • Raising Revenues for government or • Reaching service uptoaamadmi • Return on capital employed <6.5% S673 _Sept'12

  20. Industry Woes (2) • No company has declared a dividend in the last 18 years • Share prices’ performance below BSE index • Banks not enthused to finance 2G spectrum purchases. • A Kotak Investment Study finds need for “Viability Gap Funding” by government ? S673 _Sept'12

  21. Perverse views of DOT/TRAI • Asking internet service providers (ISPs) for revenue share. • Asking tower companies to pay revenue share and take a licence • Asking cell companies to pay spectrum charge determined by 2012 2G auctions for the remaining period of the licence of P-telcos 2014/15 . (Electricity transmission towers and distribution poles do not require a licence nor do they pay anything to any body.) • Withholding VOIP for the last 10 years an d now saying OK • Not allowing 3 G roaming between different company networks (no single company got 3Glicence for the entire country – Airtel- 13; Idea-11; Vodafone-9; BSNL-everywhere ) • Suggesting reforming of 2 G networks from 800 MHZ to 800/900 MHZ bands S673 _Sept'12

  22. Thank You:Dhanyawad S673 _Sept'12

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