LTE, the succeeding technology for GSM/HSPA networks, provides a number of benefits to operators and consumers alike, including significantly increased peak data rates (of above 100Mb/s), reduced latency, scalable bandwidth, and compatibility with GSM/EDGE/UMTS networks. By mid-2011 there were 64 operator commitments to deploy commercial LTE systems in Europe, in addition to 56 pre-commitment trials. Globally, there are 196 operators in 75 countries investing in LTE.
LTE was initially deployed in Scandinavia by the incumbent operators, leaving the rest of the region in trial phases, or awaiting the release of additional spectrum and the refarming of existing spectrum for LTE/WiMAX networks.
TeliaSonera spearheaded LTE, deploying the world’s first commercial systems in Norway and Sweden in late 2009. In Lithuania, the company’s wholly-owned subsidiary Omnitel has an existing HSPA network covering more than 250 towns. It has now launched the country’s first LTE network, in five of the main cities. Supported by the equipment providers ZTE (for modems) and Huawei (for the network), the deployment is among the first in the world to use the 1800MHz band. The deal is a coup for the Chinese providers, given the sensitivities of regional manufacturers. ZTE and Huawei are also equipment suppliers for H3’s LTE infrastructure in Sweden and Denmark, but TeliaSonera has previously opted (perhaps influenced by economic diplomacy) to side with local manufacturers: having initially contracted Huawei for its LTE networks in Sweden and Norway the company in early 2010 changed its vendors to Ericsson and Nokia Siemens Networks (NSN), leaving Huawei to complete the Oslo network only. TeliaSonera’s LTE footprint now covers Sweden, Norway, Finland, Denmark, Estonia and Lithuania.
For TeliaSonera the upgrade to LTE, ahead of anticipated LTE deployments by the two other Lithuanian MNOS Tele2 and Bité, marks the next stage of its strategy to build up its high-end mobile data capabilities. The company’s subscriber base (at 2.02 million in March 2011) is relatively unchanged since the end of 2007 yet monthly ARPU has more than halved during that time (from LTL34 to LTL16.4). Given the maturity of the mobile voice market, Omnitel is increasingly focussed on mobile broadband. This will help offset the continuing decline in revenue (which fell 17.3% in the first quarter of 2011, year-on-year, partly caused by lower MTRs but also by price competition). The strategy has paid dividends: mobile data now accounts for 26% or total mobile revenue, compared to 22% a year ago. This proportion is far higher than in its other Baltic markets (18% in Latvia, 14% in Estonia), and is on a par with its Scandinavian businesses.
These figures will be keenly watched by Europe’s other MNOs as they settle in with their LTE strategies. The market has changed since the first LTE deployment, when TeliaSonera could not be sure of the extent of customer take-up, or indeed of the effect which mass take-up would have on network capabilities. With the European Commission having set out the rules for using LTE on the 900MHz and 1800MHz bands, operators have many more options to consider.
Senior Analyst, Europe
For more information on these developments, see the separate reports:
Lithuania – Mobile Market – Overview and Statistics;
Lithuania – Key Statistics, Telecom Market and Regulatory Overviews;
Europe – Mobile Market – Mobile Data.