Roll Out of LTEProgress & Challenges

By

DR T.H. CHOWDARY

Director: Center for Telecom Management and StudiesFellow: Tata Consultancy Services

Chairman: Pragna Bharati (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.comKeynote address @ IETE : 11th Sept 2012

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

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

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Mobile Penetration in the Last Decade

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

10

20

30

40

50

60

70

80

67.0

25.9

17.8

9.5

7.1

Mobile cellular telephone subscriptions Internet Users Fixed telephone lines Mobile broadband subscriptions Fixed broadband subscribers

An estimated 4.6 bn subscription globally by the end of 2009

*

Source: Voice & Data, Sept 2011 and IT U World Telecoms/ KT Indicators Database * Estimates

Per 100 Inhabitants

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

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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)

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Evolution for Data AccessYear 1997 2000 2003 2003+ 2006 2008 2012

System GSM GPRS EDGE 3G 3.5G 4G 4G

Data Rate

9.6 115 384 2 MBPS 4MBPS 8MBPS 100 MBPS

GSM Evolution 3G LTE

EDGE - Enhanced Data Rates for Global EvolutionLTE – Long Term evolution; GPRS: General Packet Radio ServiceGSM: Global Service Mobile

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Spectrum Requirements

2G 3G BWA

100MHZ 60MHZ 500MHZ

900 & 1800MHZ bands

2,100 MHZ band 2,300MHZ band

Radio Spectrum- Bands & Frequency

Band Frequency in GHZ

Band Frequency in GHZ

L 1-2 U 40-60

S 2-4 V 50-75

C 4-8 E 60-90

X 8-12 W 75-110

Ku 12-18 E 90-140

Ka 26.5-40 D 110-170

Q 30-50

Infra Red – Light - Ultra Violet

Below 1 GHZ : LW, MW, SW, VHF, UHF, SHF

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Limited Spectrum for Mobile Broadband

Best mobile broadband (300 MHz-3.5 GHz)

Bounces from the sky Bounces inside rooms

Penetrates buildings and terrain Reflects from buildings

Follows Earth’s curvature Travels in a straight line

Fades in the rain

1 MHz 10 MHz 100 MHz 1 GHz 10GHz75 meters 7.5 meters 0.75 meters 7.5 cm 75mm

LTE deployment• Mid 2009 Telia Sonera 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)

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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

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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

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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

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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 .

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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

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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

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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?

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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 upto aam admi• Return on capital employed <6.5%

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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 ?

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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

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Thank You:Dhanyawad