Does LTE really stack up?
It would seem an almost certainty that the major operators will be bidding for the 800Mhz spectrum, to the point where the economics of it all have not been questioned. Whilst it certainly seems like a positive step to take, it won’t be without risk. So far, five countries in Europe have held auctions for this spectrum, with prices ranging from €233 million in Sweden, all the way up to €3.6 billion in Germany. Dan Warren, Senior Director of Technology at the GSMA says “you can’t not make the move” because in the long term it’s cheaper for operators in terms of cost per bit and opex. However, the costs associated with LTE are far from small and it is still a big risk. “You go bust if you get it wrong” warns Kevin Baughan, Director of Metro at Virgin Media.
There will certainly be first mover advantage for the operator that deploys LTE. In the UK that looks like it will be Everything Everywhere, but there will still be issues to be overcome. Aside from the potentially massive cost of implementation, there is the issue of fragmentation of the LTE spectrum which causes issues at device level, for example, the “4G” iPad 3 that has just been released is not actually compatible with the 1800Mhz spectrum that Ofcom has intimated will be approved for use by Everything Everywhere. The iPad’s 4G capability is only in the 700Mhz and 2100Mhz bands, which means it will work on AT&T and Verizon’s networks in the US and not on Everything Everywhere’s planned LTE1800 network.