Thursday, September 13, 2012

How could EU lose out on LTE for iPhone5?

When Apple launched the new iPhone5 yesterday, most observers, including myself, were convinced that the new phone would launch with global LTE silicon inside. I became even more certain of this when Nokia Lumia 920 launched just a week before with a chipset compatible with most LTE bands globally.

Somehow Apple, and so far for unknown reasons, managed to miss out on LTE for a large portion of the world, again.

While the iPhone5 is compatible with LTE in the US, some Asian markets as well as a handful of carriers in Europe which had access to old, refarmed, 2G spectrum, it does not support the most common, standard LTE bands at 800Mhz and 2600Mhz.

It is definitely true that most existing LTE coverage is today present in the US and some Asian markets and if you take a snapshot of how things look today, the iPhone5 hardware configuration may make sense. But because of Apples 12 month renewal cycle for the iPhone, a lot of things will change, and quickly, during the iPhone5 cycle.

If we take Sweden as an example, Telia launched LTE as the first operator in the world about three years ago using the globally standardized 2600Mhz band and later the 800Mhz band. These bands are common throughout EU, large parts of Asia and other continents, but are today mainly in use in Scandinavia. But almost daily there are announcements from other countries in Europe and elsewhere were new LTE networks have been launched using this spectrum.

You may ask yourself why consumers in markets like Sweden can not use the iPhone5 on the 1800Mhz spectrum that also is a global standard (outside the US). The main reason is that this spectrum is still used for GSM (2G) and have yet to be refarmed for LTE. In the case of Sweden, this is unlikely to happen anytime soon for various reasons.

First of all, the new frequency plan awarded to Telia, Telenor and Tele2 by the regulator PTS will not take effect until January 1st, 2013. When that happens, even if the operators have planned ahead, a long and work-intensive process takes place before we can see any live LTE coverage on the 1800Mhz band supported by the iPhone5.

First of all, this band is in heavy use for voice calls today and the carriers need to find a way to juggle that traffic onto some other band before rolling out LTE (which probably will not support VoLTE at roll-out).

Second, they also need to conduct new frequency and network planning due to that the spectrum holdings have changed somewhat after the latest auction and the regulator has shifted around the holdings somewhat to achieve as coherent spectrum bands as possible.

Third, LTE roll-out needs to be done with new hardware and backhaul. I think it is therefore very unlikely that Sweden, and many other markets, will see any live LTE traffic on the 1800Mhz band before mid to late next year, in a best case scenario. In Sweden the motivation to fast-track this roll-out should be insignificant since most operators have sufficient spectrum in the 800/2600Mhz bands.

The exception to this are countries like the UK and Germany that refarmed their 1800Mhz band much earlier.

In effect, the iPhone5 LTE capabilities will be limited to the US and a few Asian markets and a handful of carriers in Europe. Maybe an opportunity for the competition?

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