Telecom news and analysis

There have been a number of interesting announcements in the last few weeks related to LTE.

Firstly, NTT DoCoMo in Japan has announced that the number of subscribers to its LTE Xi service reached two million on March 18 2012 – an increase of one million subscribers since December 24 2011. This growth has been encouraged by the introduction of the first Xi-compatible smartphones in November 2011. NTT DoCoMo launched its LTE service on December 24 2010. It is particularly interesting to see the recent increased pace in subscriber growth. It has taken NTT DoCoMo less than three months to reach its two-millionth customer, compared with about a year for its one-millionth customer. This progress looks very promising.

Following my recent positive review of the LTE-capable iPad 3, I’m pleased to see that iPad 3 sales have got off to a great start. Apple has announced that 3 million iPad 3 units were sold in the first three days after its launch on March 16 2012. However, it has not been all plain sailing for the LTE-equipped iPad. The iPad 3 does not support all frequency bands associated with LTE across the world, restricting its use to North America.  The iPad 3 only supports LTE using 700MHz and 2100MHz frequency bands. Apple’s website now states, “4G LTE is supported only on AT&T and Verizon networks in the U.S. and on Bell, Rogers, and Telus networks in Canada”. In Australia, Apple has been forced to offer refunds to customers who had mistakingly purchased the iPad 3 believing that it would work with Telstra’s LTE network.

The rapid take-up of the iPad 3 will help to drive traffic volumes on LTE networks in the USA. As a sign that US operators are anticipating significant growth in mobile traffic, it has been widely reported that Verizon (in an FCC filing) has predicted a more than 20-fold increase in LTE data traffic from the end of 2011 to the end of 2015.

I’ve written before about how some operators are trying to encourage the substitution of fixed broadband services using LTE. For example, Vodafone Germany has been seeking to migrate its DSL customers to LTE. Up until recently, US operators have preferred to position LTE  services as a complement to fixed broadband services. In March 2012, Verizon made the notable step of unveilling its new HomeFusion antenna product, which is more clearly aimed at customers wanting to displace fixed broadband services. The HomeFusion antenna, which is priced at USD200, has to be installed on the outside of a customer’s home (by Verizon). Verizon hopes to offer HomeFusion in all of its LTE  markets by the end of 2012. The performance of its LTE network, with downlink speeds of 5-12Mbps and uplink speeds of 2-5Mbps, will be attractive to rural customers currently experiencing patchy DSL services. Verizon charges USD60, USD90 and USD120 for its HomeFusion services with monthly data allowances of 10GB, 20GB and 30GB respectively. While these are generally more expensive (and have lower monthly allowances) than many fixed broadband services, they are likely to appeal to customers unable to get decent fixed network speeds.

About the author:

Mark Heath is co-founder of telecom strategy and telecommunication consultancy company Unwired Insight. He provides regular in-depth analysis on LTE and 4G, and has co-authored over 40 research reports on the biggest issues in the telecom industry.