TeliaSonera, Telenor take differing approaches to LTE

OSLO, Norway–When it comes to 4G LTE rollouts, Scandinavia is right at the leading edge, but that doesn’t mean all Nordic operators take the same view of how it will all pan out, or what business models will work.
Speaking at the MBB Global Forum hosted by Huawei Technologies Inc. in association with the GSMA, Tommy Ljunggren, VP of system development for TeliaSonera Stockholm, could barely contain his optimism for the new technology, while head of strategy and architecture at Norway’s Telenor, Sigurd Thunem, appeared rather more cautious – with each operator taking a materially different approach to rolling out LTE.
“Faster is better,” declared Ljunggren, whose firm launched its first 4G network nine months ago, with dongles already commercially available in shops, with 25 Swedish cities already kitted out with 4G before the end of 2010, and 228 Swedish cities to be sporting LTE by the end of 2011.
“It makes one wonder, are there even 228 cities in Sweden,” Ljunggren joked, adding: “The last ones are quite small actually.”
TeliaSonera has also started rolling out LTE in Norway, with additional soft launches in Finland, Denmark and Uzbekistan, along with trial connections in the Baltics.
TeliaSonera’s stand-alone LTE network was launched within a year of the operator’s decision to be first to market, something Ljunggren credits to the collaboration between his firm and network manufacturer partners like Huawei.
Ljunggren enthused that while launching 2G and 3G services back in the day had been a hassle, “it was really quite boring to launch 4G; it was too easy.” He urged other global operators not to waste any more time before launching the next-generation mobile services themselves, admitting that TeliaSonera knew it was “pushing the industry a bit.”
Developments in the U.S., said Ljunggren, would continue to push the market further forward by bringing consumers in, repeating “Why don’t the rest of you hurry up and launch already?”
The advantages, explained Ljunggren, were clear. Average downlink speeds of 40 megabits per second and 35 Mbps uplink, with the VP noting “we’re not picking good spots or anything, that really is what we’re seeing.”
“No one is really talking about the great uplink speeds or the low latency, but they should be,” Ljunggren declared, telling the audience how both these factors had enabled the Swedish media to cover the recent royal wedding in near real time.
Indeed, multiple mobile cameras were used with laptops and LTE dongles to stream live pictures from on-location reporters directly to the TV center.
“It means a lot to photographers,” Ljunggren said, denoting video and picture upload for media purposes “one of the killer apps people are looking for on 4G.”
And while Ljunggren admits there has not been any extreme take-up of the technology just yet, this has not discouraged TeliaSonera one bit, with the firm claiming much of the reason lay with the original single mode terminals, which had now been switched for multi-mode terminals.
“Teliasonera believes this is good business and a good place to be,” he evangelized, noting that while more and more data was coming from smartphones, the operator was also seeing machine-to-machine (M2M) communications really start to take off in a big way too. “4G, yes it’s for the users, but it’s also for corporate uses too,” he said.
So can one actually make money out of it? Ljunggren says it’s very possible, but that operators must be very careful about the business and pricing models they choose to implement.
“You have to have a cap, a monthly usage fee and a defined speed, but you should be able to add things, additional usage, additional speed, fee for VoIP, or for gaming,” he said comparing potential future pricing to “Lego blocks.” Operators should use these add-on pricing models or see their business ruined, he cautioned.
While pricing models had to be carefully looked into, however, Ljunggren said he didn’t believe either capex or opex were a problem, especially with plummeting software costs and the degree to which network infrastructure could be re-used – quoting that number to be as high as 70%.
“The electronics are not expensive anymore,” he declared, putting forward TeliaSonera’s relatively stress-free model of adding 4G capability over an existing 3G network for almost no extra cost – especially in a Single RAN environment.
“It’s not like HSPA, which required costly hardware/software upgrades all the time. For 4G, you can get a lot for less if you upgrade your network at the same time,” he argued. “If you adjust your pricing you can get a lot of money out of this mobile broadband business. It’s really promising, it’s really working, don’t wait, launch.”
In fact, so convinced is Ljunggren of TeliaSonera’s model he even believes that operators “who don’t get 4G spectrum will have to cooperate with those who do or leave the market.”
Meanwhile, Sigurd Thunem of Norway’s TeleNor, speaking just after Ljunggren, said that unlike TeliaSonera, he did worry about capex and opex.
“Of course, launching LTE 2.6 GHz is no big deal, we could have done that months ago too and gone head to head with our Swedish friends, but then we decided to think things through longer,” he explained noting that TeleNor wanted to change out every single baystation in Norway from 2G/3G to LTE, rather than layer the 4G on top.
“No doubt, we are later than our Swedish friends, but we want to do things properly. We don’t want to just build another store, we want to build the proper foundations, from scratch,” he said, going on to say that Norway was a very big country with a smaller, more dispersed population.
While Thunem doesn’t dispute that infrastructure costs are falling, he said it was still “very expensive,” to swap out all current infrastructure to a single RAN network.
The ultimate goal for Telenor is to create a multi-layered network, with 2600 MHz LTE hotspots in traffic-heavy city centers, UMTS 2100 MHz and LTE at 1800 MHz for urban and semi-urban areas and a national network at 900 MHz GSM and 800 MHz LTE for underlying coverage and service in rural areas.
This will require the whopping task of switching around 6,500 sites at the rate of 160 sites per week from Q211.
Around 200 sites throughout Norway have already been swapped and are now live, with Thurnem tentatively noting that the “initial experience is good,” having gone without any major problems and with engineers noting that the hardware is very stable.
The biggest challenges, he said, were still time on site – and the worry about bad customer experience due to loss of coverage during a site swap – quality of field work and the ability to secure enough trained professionals. Coordination was also a concern, with Thurnem noting everything had to mesh together and run smoothly from the get-go to prevent backlog building up and crashing the network.
Network management, he said, was also going to prove remarkably costly and difficult. “In a multi-layered network, it is excellence in traffic management that will separate the good operator from the bad,” he warned.
Interestingly, while Thurnem said there would still be a market for 2G in the future, he didn’t see much of one for 3G explaining “It would not surprise me if a strong 4G network would result in 3G being phased out before 2G.”