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Technology Choice: Indian market shows preference for LTE

March 30, 2012

India remains one of the largest underserved broadband markets despite having the second largest telecom subscriber base in the world. While operators in developed and developing countries offer an average broadband speed of around 5.1 Mbps and 1.5 Mbps respectively, Indian service providers are struggling to provide average speeds of 512 kbps or above.

In order to improve the country’s broadband penetration and broadband speed, the government auctioned the broadband wireless access (BWA) spectrum in June 2010. Since this spectrum has the bandwidth capability to support both Wi-Max and long term evolution time division duplex (LTE TDD) technologies, there has been a debate on the adoption of the relevant technology. Wi-Max is an extension of Wi-Fi technology, which is already present in the country, while LTE-TDD needs a new ecosystem for deployment. However, the latter is likely to dominate the telecom landscape in the long run, with most operators in India showing preference for it.

Globally, LTE is gaining an edge over Wi-Max in terms of 4G deployments. According to the 16th issue of Maravedis’s 4GCounts quarterly report, the quarter-on-quarter subscriber increase for LTE was 250 per cent as against only 12 per cent for Wi-Max at end-October 2011. In India, however, the number of Wi-Max rollouts has been higher than LTE. Though most operators have conducted LTE field trials with leading equipment vendors, the country has not witnessed any commercial roll-out so far.

Choice of technology

The decision to opt for a technology depends on factors such as its maturity (capable of a mass market launch and future-proof); the operator strategy (legacy network, capex and opex, and status of global deployments); technology parameters (peak data transmission speeds and latency); the regulatory situation (availability and cost of spectrum, and regulatory compliance with technology standards); and the availability of a robust ecosystem (support from infrastructure and equipment vendors).

In terms of potential, LTE and Wi-Max  have more similarities than differences. Both are all-IP (internet protocol) technologies, offer bandwidth flexibility and support several carrier frequencies. Moreover, both technologies are based on the orthogonal frequency division multiple access (OFDMA) multiplexing technique, and offer higher speeds and capacities as compared to 3G and conventional wireless broadband network standards.

Wi-Max802.16e, when migrated to 802.16m, shares performance capabilities with LTE as both the technologies use similar wireless and IP design techniques to attain maximum spectral efficiencies (defined by Shannon’s Law [approximately 6 bits per Hz]). While 802.16e operators can deliver speeds of over 3.5 bits per Hz (35 Mbps per sector for a 10 MHz channel), 802.16m and LTE will increase this to over 5.0 bits per Hz (over 100 Mbps per sector for a 20 MHz channel). Moreover, both Wi-Max and LTE are suitable for deployment in developing countries like India, where last mile broadband connectivity is a challenge due to inadequate fixed line infrastructure.

There are, however, some major differences. A key distinction is the fact that Wi-Max has been developed by the Institute of Electrical and Electronics Engineers (IEEE), the custodians of Wi-Fi technology, while LTE is based on the 3rd Generation Partnership Project (3GPP). IEEE has a proven history of being more supportive of open standards than 3GPP. Also, with the equipment and infrastructure in place, Wi-Max gives operators an edge in terms of time-to-market. While service providers have installed and initiated the testing of LTE equipment in trial deployments, these networks are not yet open to the public. The technology is still at a nascent stage and will take time to mature. It is not likely to be available for large-scale commercial roll-out in India before end- 2012. Another drawback is the lack of clarity on and standards for voice over LTE technology. LTE is most suitable for data-specific services, but has limitations on the voice front due to the absence of a common global standard. Also, the high price of LTE-TDD-enabled devices, especially in emerging economies with a low per capita income, is a key deterrent to their uptake. On the other hand, maturity of available solutions and a vibrant ecosystem (including devices) and low intellectual property right costs associated with Wi-Max makes it the preferred choice.

That said, the latter requires the establishment of a separate network while some LTE-TDD chipsets, like those from Qualcomm support 2G/3G/4G in a single integrated chipset. Thus, the technology can be deployed on the installed networks of existing 3GPP technologies. This is relevant for India, where BWA licences have been recently awarded and a large-scale network roll-out is under way. Further, LTE-TDD’s compatibility with 3GPP technologies will facilitate refarming of spectrum and network upgradation. Indian BWA licence winners like Bharti Airtel and Aircel, which offer 2G/3G services, will find it easy to upgrade their existing networks to make them LTE compatible.

Also, Wi-Max requires 30 MHz of bandwidth to work effectively. However, at present, India offers only 20 MHz of BWA spectrum for mobile broadband roll-outs. LTE promoters like Nokia Siemens Networks and Ericsson say that the available spectrum is not suitable for Wi-Max as it may lead to severe interference issues, which could result in significant capacity and performance losses.

Migration from the Wi-Max standard to LTE-TDD will continue to be an option for service providers. Operators such as Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), which were awarded BWA spectrum prior to private operators, initially deployed Wi-Max. However, given that most private players have shown a preference for LTE, the state-owned operators are now planning to adopt LTE-TDD.

Depending on the business model, applications and the timeline for deployment, service providers would show a tendency to prefer one TDD option over another. However, it is important to note that the LTE vs Wi-Max scenario is in no way similar to the technology battle between CDMA and GSM. The two technologies are not entirely incompatible. While LTE-TDD is a standard for TDD spectrum, Wi-Max is also based on TDD.

Going forward, both the Wi-Max and LTE standards will evolve to International Mobile Telecommunications-Advanced (IMT-Advanced) requirements, which will increase the similarities between these technologies. The increasing demand for broadband connectivity will continue to be addressed by both these technologies, among others. In fact, service providers expect that in the future it would be easier and cheaper to design devices that can incorporate both these technologies.

Having crossed the crucial 100 million internet user mark, India is set to enter a critical period of internet growth with the possibility of becoming the largest internet user globally. To cater to the increasing broadband demand, operators need to select a relevant technology that will play an important role in establishing an attractive broadband model for the country. Though most Indian operators have selected LTE-TDD as the technology platform for BWA, the actual uptake of these services would ultimately depend on the mass deployment of the technology.


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