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Current state and Development Perspectives of Time Division LTE Networks (TD-LTE) in Russia and in the World

May 2013

Analytical Report (full version)

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Analytical Report (full version)

Current state and Development Perspectives of Time Division LTE Networks (TD-LTE) in Russia and in the World
Current state and Development Perspectives of Time Division LTE Networks (TD-LTE) in Russia and in the World
May 2013

Current state and Development Perspectives of Time Division LTE Networks (TD-LTE) in Russia and in the World

May 2013

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Popularity of single band LTE networks (TD-LTE) in the world is not as high as dual band networks (FDD-LTE). Nonetheless, TD-LTE ecosystem is actively developing, and this technology gives a good opportunity for companies that do not have mobile connection networks (so called Greenfield operators) to enter mobile broadband access market. In addition, TD-LTE can be successfully used as a backhaul network for ‘small cells’ that are gaining popularity in the face of rapid increase of mobile data traffic. J'son & Partners Consulting presents the main results of the research ‘Current state and development perspectives of Time Division LTE networks (TD-LTE)’.

 

Current state and development perspectives of TD-LTE networks in the world

According to GSA data, by the beginning of May 2013 16 commercial TD-LTE networks were launched in the world including 6 hybrid networks supporting both technologies TD-LTE and FDD-LTE. At the same time total number of commercial LTE networks equaled 175, e.g. share of TD-LTE networks amounted to less than 10%.

 

Operators choose TD-LTE due to the lack of frequency resources, one of the main contenders for this technology are WiMAX-operators, many of which are strategically focused on switch from WiMAX to LTE. But the main driving force of TD-LTE is the largest mobile phone operator China Mobile, which launched large-scale testing of TD-LTE network in China. By the end of 2013 the operator plans to deploy about 200 thousand TD-LTE base stations in 100 cities of the country, covering about 300 million citizens.

 

As at the end of the 1st quarter of 2013 the largest TD-LTE operators¹(¹ Softbank Mobile uses AXGP (Advanced eXtended Global Platform) technology compatible with TD-LTE) were Softbank Mobile (Japan) with 1.25 million subscribers and Mobily (Saudi Arabia) with around 1 million subscribers in January, 2013. With the support of the largest manufacturers of equipment and chipsets (Huawei, Samsung, ZTE, Qualcomm and others), these and other TD-LTE network operators, such as, for example, Bharti Airtel (India), will jointly develop an ecosystem of LTE in single band.

 

According to the forecast of industrial organization TDIA, the number of subscribers of TD-LTE networks in the world will reach 210 – 300 million subscribers by 2016 (Fig.1), which will represent 10-20% of the total subscribers base of LTE network. According to the forecasts of Informa Telecoms & Media, by 2017 this figure will reach almost 250 million or about a quarter of the total number of LTE subscribers. According to more optimistic forecast of ARC Chart, the subscribers base of TD-LTE networks will amount to 500 million subscribers by 2017, and revenues from services will equal $ 91 billion. Number of TD-LTE network users is forecasted to be 10.8 million against 200 million subscribers of FDD-LTE by the end of 2013.

 

 

In future technology will gain popularity due to the possible expansion of the frequency band suitable for its implementation. In particular, according to TDIA, with time, frequencies used for 2G networks, will be fully converted for the use in LTE-band. There are also plans for the development of TD-LTE band at 3.4-3.8 GHz and higher frequencies.

 

One of the possible perspectives of TD-LTE development is its use as a basic eRelay network for small cells or a network of fixed broadband Internet access. It is the principal based UK Broadband network is constructed in the UK.

 

Technologically TD-LTE network can be constructed while using a combination of macro- and small cells. Their main differences include coverage space and the maximum number of subscribers that can be served in the cell. It is forecasted that by 2017 approximately two thirds of small cells will be used to support TD-and FDD-LTE networks.

 

Ecosystem of subscribers devices supporting TD-LTE is also actively developing. Over the last year and a half the number of available consumer TD-LTE devices in the market increased by 14 times, while the total number of LTE devices increased by 4 times. The main trends in this market segment include growing popularity of multi-standard devices used for work in GSM/WCDMA/TD-SCDMA/LTE FDD/TD-LTE networks and models range extension. In the structure of TD-LTE devices dominate routers and USB-modems – these devices occupy ¾ of the market (Fig.2). However, the number of both announced and commercially available user devices supporting TD-LTE fall short of the number of FDD-LTE. For example, according to GSA, as at the beginning of July 2013 200 TD-LTE devices were announced in the world against 948 FDD-LTE devices. The first TD-LTE smartphone was launched in the 2nd quarter of 2012 (ZTE Grand Era LTE, supports both TDD and FDD). In June 2013, Sony launched its first smartphone supporting TD-LTE, which was designed for China Mobile operator.

 

 

 

Drivers and constraints of TD-LTE market

Main drivers of TD-LTE network market in middle-term perspective include the following:

 

       lack of necessity in dual band in the context of its heavy deficit,
       relatively low cost of infrastructure and frequencies,
       support from the part of the largest vendors and operators, industry organizations,
       possibility of FD-LTE network convergence.

 

At the same time market development is restrained by such factors as relatively low spectral efficiency of TD-LTE, the need to use protection intervals in frequency band in order to prevent interference and the need for synchronization of base stations, as well as limited range of user equipment.

 

Perspectives and forecasts of TD-LTE development in Russia

Development of TD-LTE networks in Russia is quite slow. At the beginning of July 2013 the country had two commercial TD-LTE networks launched by the largest operators – MTS and ‘Megaphone’, both covering the territory of Moscow and Moscow region (Table 1). At the same time companies are developing FDD-networks, for which smartphones have already came into the market. Apparently MTS and ‘Megaphone’ do not plan to expand existing TD-LTE networks till a wider range of consumer devices will appear in the market.

 

Other companies that own frequency for TD-LTE cannot start their activities due to administrative barriers. For example, ‘Vainah Telecom’ cannot put network into commercial use due to the lack of equipment, which has Russian status, and ‘Osnova Telecom’ – due to problems with frequencies (the company is trying to return through court frequencies previously assigned to it). Currently ‘VimpelCom’ is only developing FDD-LTE network.

 

 

In general TD-LTE networks are currently used solely for Internet access services. There are no voice technology services in Russian TD-LTE networks yet.

In midterm perspective by 2017 TD-LTE technology may obtain 25% of LTE subscribers. According to J’son & Partners Consulting TD-LTE market size will not exceed 3 -4 mln. subscribers.

Detailed results of the research are presented in the full version (65 pages) of the report Current state and Development Perspectives of Time Division LTE Networks (TD-LTE) in Russia and in the World’

 

Content

Summary
1. Technological characteristics of TD-LTE
       1.1. Advantages and disadvantages of TD-LTE and FD-LTE
       1.2. TD-LTE and TD-SCDMA technologies
       1.3. Hybrid TDD/FDD network
2. TD-LTE ecosystem in the world and in Russia
       2.1. TD-LTE frequency band
       2.2. Commercial and planned TD-LTE networks
       2.3. Subscribers base and revenues of TD-LTE operators
       2.4. TD-LTE infrastructure
              2.4.1. Macrocells: revenues from sales and delivery (units)
              2.4.2. Small cells
       2.5. TD-LTE devices
3. Drivers and constraints of TD-LTE market
       3.1 Drivers
              3.1.1 No need in dual band
              3.1.2 Support from the part of vendors
              3.1.4 Other drivers
       3.2 Constraints
              3.2.1 Lower coverage compared to FD-LTE
              3.2.2 Influence of pretection intervals
              3.2.3 Sinchronization necessity
              3.2.4 Other constraints
4. Perspectives and forecasts of TD-LTE development in the world and in Russia
       4.1. Perspectives of TD-LTE network development in Russia
              4.1.1. MTS
              4.1.2. MegaPhone
              4.1.3. Rostelecom
              4.1.4. Osnova Telecom
              4.1.5. Vainah Telecom
              4.1.6. Antares
              4.1.7. Enforta
              4.1.8. Other operators
       4.1. Forecasts of subscriber base by revenues of TD-LTE and FD-LTE networks
              4.2.1 in the world
              4.2.2 in Russia
5. Conclusions and recommendations
Annex 1. List of networks, which are to be launched within 2013-2015
Annex 2. Profiles of operators of TD-LTE commercial networks
       Softbank Mobile Corp. (Japan)
       Bharti Airtel (India)
       China Mobile HK (CM HK, HongKong)
       NBN Co (Australia)
       Mobily (Saudi Aravia)
       STC, Saudi Telecom Group (Saudi Aravia)
       Omantel (Oman)
       Sky Brazil (Brazilia)
       On Telecomunicacoes (Brazilia)
       UK BroadBand (Great Britain)
       Aero2 (Poland)
       3 (Sweden)
       MTS (Russia)
       Telkom Mobile (South Africa)
Annex 3. List of companies, mentioned in the report
Annex 4. LTE tariffs in Russia

 

List of Figures

Fig.1. Forecast of subscribers base of TD-LTE networks in 2016, mln. people
Fig.2. Market size of small cells for TD-LTE networks in 2013 and 2017, mln. units
Fig.3. Differences in use of bands in FDD and TDD LTE networks
Fig.4. Statistics of peak rate for downloaded and uploaded data in China Mobile network , by the standards of communication, Mbyte / s
Fig.5. Scheme for frequences band division in commercial network TD/FDD-LTE
Fig.6. Frequencies TD-LTE spectrum by groups, % by number of commercial networks TD-LTE
llustration 7. Geographical spread of the running-up TD-LTE networks, May 2013
Fig.8. Geographical spread of the running-up by regions, % by the number of the planing to launch networks
Fig.9. Subscribers’ base forecast LTE-FDD and LTE-TDD, 2011-2017
Fig.10. Comparative characteristics of macro- and small cells
Fig.11. The number of installed base stations for TD-LTE standard, thousand units
Fig.12. Wireless networking technologies, for which development small cell are necessary, in the period from 2012 to 2016
Fig.13. The volume of the market of small cells for TD-LTE networks, in 2013 and 2017, mln.units
Fig.14. The market structure of subscriber devices designed to work in TD-LTE networks, a% of the total (as of April 2013)
Fig.15. The number of devices in the global market, capable of working in TD-LTE standard, by frequency, by April 2013
Fig.16. The scheme of shelterbelt
Fig.17. The structure of mobile subscribers by the standards of communications in 2018, by regions,%
Fig.18. Subscribers’ base of LTE networks forecast for 2013-2016, mln.users (IHS iSuppli Research)
Fig.19. Subscribers’ base of LTE networks forecast for 2013-2017, mln.users (Informa Telecoms&Media)
Fig.20. Subscribers’ base of LTE networks forecast for 2013-2016, mln.users by used technology
Fig.21. Number of subscribers of TD-LTE networks forecast in 2016, mln.people
Fig.22. Covered are of TD-LTE and FDD-LTE networks in 2018, % of the number of population
Fig.23. Mobile network subscribers’ share used the 4G networks and share of the used traffic, %
Fig.24. Mobile operators revenue from the voice services, 2012-2016
Fig.25. LTE operators revenue forecast, 2013-2017, bln.USD
Fig.26. Subscribers’ base dynamic of TD-LTE network of Softbank Mobile operator, thousand users

 

List of Tables

Table 1. Pros and cons of TD-LTE
Table 2. Classification of TD-LTE frequencies by ranges and countries
Table 3. Most popular combinations of frequences by regions, Mhz
Table 4. List of operators launched in use commercial network TD-LTE
Table 5. List of operators launched the hybrid network TDD/FDD LTE
Table 6. Subscribers’ equipment of TD-LTE and TD/FDD LTE in Russia
Table 7. Major manufactures of equipment for creating TD-LTE networks
Table 8. Vendors which equipment had been used to launch commercial TD-LTE networks
Table 9. List of operators planning to launch TD-LTE networks
Table 10. MTS’ tarrifs for services in LTE network
Table 11. Megafon’s tarrifs for services in LTE network

 

 

 

 

This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.

 

 

Popularity of single band LTE networks (TD-LTE) in the world is not as high as dual band networks (FDD-LTE). Nonetheless, TD-LTE ecosystem is actively developing, and this technology gives a good opportunity for companies that do not have mobile connection networks (so called Greenfield operators) to enter mobile broadband access market. In addition, TD-LTE can be successfully used as a backhaul network for ‘small cells’ that are gaining popularity in the face of rapid increase of mobile data traffic. J'son & Partners Consulting presents the main results of the research ‘Current state and development perspectives of Time Division LTE networks (TD-LTE)’.