J’son & Partners Consulting presents main results of the research «International and national roaming in LTE networks in Russia and in the world». The number of data roaming users is still less than those who are using voice roaming nowadays. An increase in number of active subscribers is the base for operators' revenues growth. LTE networks are increasing data traffic and creating additional difficulties for operators.
As of December 2013, LTE roaming all over the world is only taking first steps for development. Some factors: 1. LTE roaming covering only one field – mobile data transfer, 2. only around 20 operators in the world concluded agreements for international LTE roaming and most of them are bilateral agreements not multilateral. Example of tripartite agreement is an agreement for international LTE roaming between Swisscom (Switzerland), Rogers (Canada) and SK Telecom (South Korea) operators (subscribers can use LTE services in any of these countries under the coverage of particular operator).
Drivers and constraining factors
Drivers for roaming implementation in LTE networks:
Rapid deployment of LTE networks in the world. According to GSA data (as of December 2013) 244 LTE networks have been deployed in 92 countries (98 networks were deployed in 2013 only).
The continuous demand for roaming services, especially in the mobile data transfer. Informa Telecoms & Media forecasts the data traffic in roaming will increase twice for 2013 – 2016, revenues from mobile data transfer will increase from 36% in 2011 to 47% in 2016 (share of the total operators’ revenues).
The goal to minimize the “disappearing” operators’ revenues while the mobile connection market is saturated. Syniverse estimated that mobile operators lost over 1.2 bln.USD because of “silent” roaming users, who didn’t use roaming (or tried to minimize the use) as they afraid to receive large bill for connection services. Data transfer roaming – 70% of users didn’t use this services vs 50% users of voice roaming services. In 2012, 17 bln USD had been spent by users for alternative ways of communication in roaming – purchase of local SIM-cards, WI-FI access in hotels, aircrafts and other public hot-spots with a paid internet access.
The largest chipset manufacturers are providing more and more amount of LTE-bands in one device. For example, Qualcomm is planning to launch 7-band chip in 2013. The production of multi-band chips and subscribers' devices based on Qualcomm's invention is solving some problems of international roaming in LTE network. Apple iPhone 5c/5s are supporting up to 13 LTE bands, they are the leaders in this field among other smartphones (the previous model iPhone 5 supported up to 5 LTE bands)
Market consolidation. For example, the Competitive Carriers Association (CCA) will allow providing roaming services of mobile data transfer in LTE networks via special roaming hab.
Factors that are limiting the implementation of LTE roaming:
LTE spectrum fragmentation on the global and local levels. Limited support of frequency bands on the level of subscribers’ devices. Around 40 frequency bands are being provided for LTE, around 10 of them are being used (even this limited amount is causing problems). Unfortunately the manufacturers of the “end” equipment are still not providing even the most popular LTE frequencies in their “regional” solutions, despite the fact that chipsets’ manufacturers are able to support the large number of different LTE bands. For example, latest models of Aplle iPhone 5c/5s (US edition) will not work on 2600 MHz frequency and unpaired spectrum (LTE-TDD) as well as same models (European edition – France, Germany and UK) are not supporting “American” bands.
Operators gain not only profit but also potential risks by implementing LTE roaming. For example, operators worried that they may establish the wrong price policy and LTE roaming will facilitate the cannibalization of revenues from traditional services (voice and SMS) by the user of OTT services.
Tariffs for data transfer in roaming will remain high in LTE roaming also. Most travelers are not ready to pay high bills and as a result disable the data transfer option on mobile devices before the trip.
LTE roaming in Russia, current state and perspectives
Russia nowadays provides more LTE frequency bands in comparison with other countries. The most popular among them: band 7, band 20 and band 3 (1800 MHz – the most popular band in the world since December 11, 2013)
Starting November 2013, Russian subscribers of MTS can use LTE roaming abroad: in South Korea via SK Telecom network. MTS subscribers can register in LTE SK Telecom network and use the data transfer services on devices, supporting LTE on 850 MHz and 1800 MHZ frequencies. Despite the fact that relatively small share of subscribers are going to South Korea from Russia, SK Telecom – is one of the most experienced potential roaming-partners. Operator was the first one on testing LTE roaming (in 2011) and Local breakout technology, and positioned itself as a potential main roaming partner in Asia-Pacific region.
LTE roaming is available in Saudi Arabia for MTS subscribers since December 2013, in Mobily networks (Etihad Etisalat Company). This service is planned to be launched in other countries in the nearest future according to operator’s PR department.
Russian “Big 3” operators (MTS, Vympelcom, Megafone) are providing intranet LTE roaming for subscribers. National roaming does not cover the data transfer in 4G networks in Russia.
Russian telecom operator MTT is ready to provide LTE roaming services using Diameter-Proxy technology in order to support the subscribers 4G services in the guests’ mobile networks. The service is providing either directly using IPX МТТ or via additional IPX-provider. In May 2013, MTT announced that the company become an alternative IPX-provider for MTS (MTS has chosen iBasis Global as main provider). MTT is providing LTE roaming for MTS subscribers with SK Telecom.
As of December 2013, Russian LTE operators implemented intranet LTE roaming and chose IPX-providers (suppliers). MTS launched international LTE roaming (bilingual agreement with a Korean operator). According to J’son & Partners Consulting forecasts, not earlier than in 2Q 2014 – 2015, the first multilateral agreement on roaming with international LTE operators will be signed.
The largest amounts of subscribers (about 70%) usually disable data transfer roaming in touristic and business trips, mainly due to the fear to receive a “shocking” check for connection services. Nevertheless, the highest demand is expecting in the segment of mobile data transfer. This trend is the key driver for LTE roaming implementation in the world. According to Informa Telecoms & Media forecasts, revenue share from data transfer in roaming will increase from 36% in 2011 to 47% in 2016. Main trends in the roaming services are the following: to decrease the tariffs and to implement “flat” tariffs with included volume of voice/data-traffic and text messages.
In general the implementation of roaming services in LTE networks will allow operators to save the high margin, increase ARPU and to cut the subscribers churn. Possibly the best solution for solving LTE roaming problems would be the creation of heterogeneous 4G networks (include solutions for “small cells”). For example, operators will be able to provide their clients the managing services on the WI-FI base with a guaranteed quality. Alcatel-Lucent and Qualcomm are planning the common development of “small cells”.
Operators are searching for the ways to increase the consumption of traffic in roaming, the high growth of roaming agreements in LTE is expecting in 2014. Operators are still experimenting with LTE roaming tariffs for subscribers, as this model will influence the traffic consumption.
Detailed results of the research are presented in the full version of the Report: «International and national LTE roaming» (72 p)
1. Roaming services market in the world. Tendencies and market forecast development
1.1. Roaming revenues in the private and corporate segments, number of users
1.2. Revenues from data-roaming and traffic
1.3. Voice and SMS-traffic in roaming
1.4. Tariffs in roaming
2. LTE networks development in Russia and in the world
2.1. LTE networks by frequency bands
2.1.1. In the world
2.1.2. In Russia
2.2. The level of support of frequency LTE bands on subscribers' devices
2.2.1. On the largest LTE markets in the world
2.2.2. In Russia
2.2.3. Chipsets manufacturers’ achievements and plans
3. Roaming in LTE networks
3.1. Roaming architecture in the LTE networks
3.2. Roaming implementation in LTE networks, complications and difficulties in the process and
ways of solution
3.2.1. Fragmentation of frequency band and support on the level of subscribers’ devices
3.2.2. Roaming between networks of different standards
3.2.3. Other complications
3.3. Main drivers for LTE roaming development
3.4. Projects for LTE roaming in the world
3.4.1. Verizon Wireless (USA)
3.4.2. TeliaSonera (Sweden)
3.4.3. Swisscom (Switzerland)
3.4.4. Rogers (Canada)
3.4.5. Etisalat (Saudi Arabia)
3.4.6. SK Telecom (South Korea)
3.4.7. Telstra (Australia)
3.4.8. CSL (Hong Kong)
3.4.9. China Mobile Hong Kong (Hong Kong)
3.4.10. Globe Telecom (Philippines)
3.4.11. Tata Communications (India)
3.4.12. Other operators
3.5. LTE roaming tariffs
3.6. Operators’ strategies for selecting a vendor
3.7. LTE roaming market perspectives in the world
3.7.1. Timing for roaming deployment in LTE networks
3.7.2. Operators’ strategies for LTE roaming implementation
3.7.3. The scale of LTE-roaming
3.8. LTE roaming in Russia, current state and perspectives
4. Conclusions and recommendations
5.1. Vendors and their solutions
5.1.1. Acme Packet
5.1.7. Other vendors
5.2. Commercial LTE networks in Russia
5.3. Planned LTE networks in Russia
5.4. Smartphones supporting Russian LTE networks
5.5. USB-modems supporting LTE in Russia
5.6. Wi-Fi routers supporting LTE in Russia
5.7. Commercial LTE networks in USA, Japan, South Korea and Australia
5.7.1. Commercial LTE networks in USA
5.7.2. Commercial LTE networks in Japan
5.7.3. Commercial LTE networks in South Korea
5.7.4. Commercial LTE networks in Australia
5.8. List of companies mentioned in the report
List of Figures
Fig. 1. Number of roaming users in private and corporate segments, mln. 2010-2015
Fig. 2. Cellular operators' revenues, corporate and private segments, bln USD, 2010-2015
Fig. 3. Cellular operators' revenues from roaming, bln, 2012-2017
Fig. 4. Data traffic in roaming, forecast, bln Mb, 2013-2016
Fig. 5. Revenues structure from roaming in the world: data, voice and SMS, 2011 and 2016
Fig. 6. Voice traffic in roaming, global forecast, bln min, 2013-2016
Fig. 7. SMS-traffic in roaming, forecast, bln SMS, 2013-2016
Fig. 8. The number of LTE networks, launched in commercial use, 2009-2013
Fig. 9. The number of LTE FDD networks, launched in commercial use by bands, 2013
Fig. 10. The number of announced devices supporting LTE in the world, 2011-2013
Fig. 11. The number of certified LTE devices by frequency bands
Fig. 12. The number of certified LTE devices supporting several bands simultaneously, 2011 and 2012
Fig. 13. Frequency LTE bands in different world regions
Fig. 14. Number of devices supporting LTE1800
Fig. 15. The number of certified LTE devices, March – August, 2013
Fig. 16. Subscriber's base forecast of LTE-FDD and LTE-TDD, 2011-2017
Fig. 17. LTE/EPC architecture
Fig. 18. Roaming architecture in LTE networks
Fig. 19. The possible scenarios for organization of handover in different standards in roaming
Fig. 20. Mobile traffic consumption, structure, PB/month, 2007-2013
Fig. 21. Factors influencing the choice of vendor
Fig. 22. Time frame for LTE roaming implementation
Fig. 23. Preferences for national and international roaming
Fig. 24. Number of bilateral agreements in LTE, 2013 – 2015
Fig. 25. Priority regions for LTE agreements implementation in 2013 – 2014
Fig. 26. Launch scheme of LTE roaming via MTT network
List of Tables
Table 1. Price restriction in EU roaming, eurocents
Table 2. Wholesale price restrictions in EU roaming, eurocents
Table 3. Tablet PCs supporting LTE in Russia, 3Q 2013
Table 4. Notebooks supporting LTE in Russia, 3Q 2013
Table 5. Support of LTE frequency bands and various wireless technologies on the level of chipsets
Table 6. Main LTE roaming projects in the world
Table 7. LTE roaming tariffs of some operators
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.
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