Plan For LTE

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The UPA is back in action with Indians giving a thumbs up to another round of coalition government. The Congress party will be under pressure to offer the much sought after Ministry of Communications and IT to its allies. Whoever is the telecom minister, he/she should be able to take appropriate decisions involving all stakeholders. Past ministers' performance evoked mixed response from the industry due to lack of transparency in their decision making. The new telecom ministry will face a huge task of maintaining telecom growth at a time when operators are looking for additional spectrum to stay afloat. The main focus areas for the ministry should be solving issues relating to 3G, WiMax, additional spectrum allocation, NGN, VoIP, measures to improve rural telephony, local manufacturing, among other things. In the next two-three years, the Indian telecom market will see too much action. Most of the prominent service providers are looking at entering into 3G and WiMax space. Though 3G may not be the major driving factor for the next level of revenue growth, everyone will be pitching for 3G to further enhance subscriber-base and grab spectrum. Broadband based on WiMax platform will be the much sought after service among enterprises. India has already delayed spectrum auction for 3G and WiMax. Should we wait for LTE?

The LTE buzz is emerging in some of the mature telecom markets, though its commercial launch is expected after one or two years. The new telecom ministry should keep an eye on LTE spectrum when they decide on 3G and WiMax spectrum auction. Our short term policies have forced us to go slow for new technologies. If the telecom regulator and the government can plan spectrum size for LTE, it will help operators plan their financial outlay for future projects. I am suggesting that operators should keep investments for LTE because of a number of compelling factors. The number of global LTE subscriptions will grow at a CAGR of 404% from 2010 to 2014, faster than any previous mobile standards including 3G. LTE user base will touch 136 mn by 2014, according to Pyramid Research. LTE is claimed to be more efficient as it is using cost-effective flat IP architecture. Twenty-seven mobile operators worldwide have already decided to deploy LTE, with twelve expected to rollout commercial services in 2010 and the remainder during 2011 and 2012. While it took nearly six years for UMTS/HSPA to reach 100 mn subscriptions, according to Pyramid, LTE will take just over four years to reach the same milestone. Majority of LTE users in the early stage will come from developed markets, including the US and Japan, where most of the first LTE deployments will occur. India has reasons to cheer, as LTE will grow 30% faster in emerging markets than in developed markets. Subscribers in emerging markets will account for 43% of the LTE total in 2014, up from 5% in 2010. Indian operators must plan now for LTE. The new government should assist stakeholders to achieve better economies of scale and bottom line.

Baburajan K
baburajank@cybermedia.co.in