LTE growth is being driven by consumer demand for data, the absence of fixed line infrastructure in many parts of emerging APAC (EMAP), and the need to provide the network capacity to enable next-generation mobile and services.
Operators are desperately looking to efficiently scale network capacity; wireless technology holds the key to delivering the performance and profits operators require as the mobile landscape changes dramatically.
Consumers all over the world want the fastest network, with the highest quality of experience. This is no more evident than in the Asia-Pacific (APAC) region where LTE is now out of the experimental stage and being deployed widely across most of the developed markets in the region. According to a new report by Allied Market Research, APAC is forecast to surpass other geographical markets by 2020 with approximately 40 per cent of the global LTE market. Analysys Mason is also forecasting that APAC and Latin America will account for the majority of the networks that are planned for launch by 2018. A recent report from the Global Mobile Suppliers Association confirms the demand for LTE networks, estimating an approximate 200 million LTE subscribers globally with the APAC region boasting 77.8 million, a 38.8 per cent share of the overall subscribers.
LTE growth drivers
LTE growth is being driven by consumer demand for data, the absence of fixed line infrastructure in many parts of emerging APAC (EMAP), and the need to provide the network capacity to enable next-generation mobile and services. Rapid economic development, which has increased the region’s prosperity, has also been a factor in making mobile services more affordable and helped seed the LTE ambitions of operators.
In addition, access to high-speed LTE is facilitating a wide variety of socio-economic benefits across APAC, encouraging governments to incentivise operators to deploy next generation networks. LTE is helping people lead more productive lives and, for example, enabling businesses to become more efficient in delivering goods and services. The onset of widespread broadband connectivity across the region is sustaining this economic development with improved networks in some of the countries in the EMAP region, empowering education, increasing trade and driving innovation.
Growth in LTE, and the subsequent rise in mobile data traffic, is leading to an increase in infrastructure investment. Operators have the challenge of efficiently scaling infrastructure which delivers the capacity to satisfy consumer appetite for mobile connectivity and support the array of new services being deployed across the region.
This challenge is evident in the diversity of development across APAC’s mobile market which has led to a multitude of LTE network adoption scenarios. The variety is evident in the 47 countries and 3.7 billon people in the region which contain many intricacies and complexities due to economic, political and geographic factors. South Asia, for instance, reflects a diverse mix of mobile and internet diffusion patterns. Malaysia and Singapore have a mature network infrastructure and mobile penetration exceeding 100 per cent, whilst countries like the Philippines and Indonesia are still considered to have a developing infrastructure.
It is expected that these EMAP regions will be able to take most advantage of the demand for LTE networks rather than the developed APAC (DVAP) regions that have more mature offerings. However, managing and constructing an LTE network has many factors to consider, not least the technical requirements needed for mobile backhaul. As always, the cost of backhaul is a paramount consideration in running and launching new networks.
The Philippines is a good example of the complexities of managing LTE networks. A recent report by OpenSignal Inc. has concluded that the Philippines have the slowest LTE connection among the 16 countries surveyed, with 5.3 Mbps (megabits per second). Operators in EMAP regions have increasing pressure to provide the capacity needed to handle the huge data demands from smartphones, tablets and new technologies such as M2M. Operators are in danger of failing to provide consumers and business with the fast, high quality network that is demanded of LTE.
Operators have known for some time that they need to drive innovation in their business processes and run networks at a much lower cost per bit to achieve success. However, the extensive capital expenditures (CAPEX) and operating expenditure (OPEX) challenge in setting up new infrastructure is seeing operators struggle to make a successful business case. For example, putting vast amounts of fibre networks into the ground can encounter huge costs and lengthy time to the market as well as a geopolitical minefield of regulation which can reduce an operator’s return on investment (ROI). Even worse, fibre can suffer from poor reliability and high maintenance costs due to either deliberate or accidental damage. Increasingly, operators are turning to a new wave of efficient, flexible and high capacity wireless technologies, including point-to-multipoint (PMP) microwave.
Traditionally, the low ARPU in the APAC countries puts even more emphasis on operators to make efficiencies. This means that, for the overall business case to work, every bit of data must be delivered at the lowest possible cost, and it’s this imperative that makes operators turn to innovative solutions like PMP microwave. Because the hub radio itself, as well as the backhaul spectrum, are shared across a number of LTE sites in the sector; both the hub equipment and spectrum cost are amortised across this number of links. Analyst consultancy Senza Fili recently found this allows PMP microwave to deliver savings of up to 50 per cent over other forms of backhaul, while delivering the same carrier-grade service essential for LTE.
PMP microwave uses area-licensed spectrum to create a sector of backhaul coverage from a single hub site and ensures the guaranteed quality of service LTE demands. Multiple cell sites can be backhauled within this sector, and bandwidth is dynamically shared across all links. Due to this real-time allocation of spectrum, PMP microwave enables the ‘troughs’ of one cell site’s traffic demands to be filled by the ‘peaks’ of another. This aggregation reduces the total bandwidth required for a sector and has been proven to improve spectral efficiency by at least 40 per cent when compared to traditional point-to-point (PTP) technology. By efficiently managing the backhaul spectrum required for LTE, operators can run networks at a much lower cost and achieve a higher ROI – crucial at a time where revenues are under threat. Importantly, PMP microwave (which operates above 6GHz) has the capacity to handle the most demanding LTE networks and is already proven in LTE backhaul deployments in other regions of the world.
Whilst the enormous promise of LTE is clearly evident, operators still need to look at new and innovative ways to unlock the true potential of their backhaul infrastructure and increase ROI. Many operators see the deployment of multiple virtual networks over a common physical network as the answer. Some operators currently choose to build completely new LTE or enterprise access networks to sit alongside legacy infrastructure, however this can create inefficiencies across the different generations of technologies.
The latest backhaul technology now allows for new profitable business models to be created. By creating a converged backhaul network, LTE backhaul can be accommodated whilst also using the virtual networking capability to monetise spare capacity by deploying additional services to businesses. A converged PMP microwave backhaul network, for instance, enables operators to introduce fixed enterprise access services on the same LTE network – serving business with next generation connectivity.
This efficient use of backhaul and spectrum enables operators to invest in fast mobile speeds and carrier grade services, whilst allowing for competitive pricing and increasing profitability. This increase in ROI is particularly beneficial at a time where the fragmentation of spectrum is a particular issue for APAC.
The long term growth prospects for mobile broadband in APAC are enormous as operators are finding consumers and businesses hungry for transformational mobile and internet services. With operators desperately looking to efficiently scale network capacity, wireless technology holds the key to delivering the performance and profits operators require as the mobile landscape changes dramatically.
New business models and innovative wireless backhaul will not only protect investments in LTE but pave the way for new services and revenue opportunities – helping operators reduce churn in what is becoming an increasingly competitive market.
It is an exciting opportunity for operators in APAC to upgrade their technology for LTE and bring new innovative services to the market. With cost savings obtained by increased efficiency and utilisation of resources, quality of service or features need not be sacrificed with wireless technologies. As customer preferences change and mature in the APAC region, there is huge potential in the market to deploy efficient and flexible wireless technologies to build fast successful networks.