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TD-LTE is deployed more often in emerging markets than in developed markets

"The relatively low level of deployment of TD-LTE in developed regions suggests that a 'spectrum crunch' does not exist in those regions, or has been mitigated."

Spectrum

413 commercial LTE networks were launched worldwide by the end of 2Q 2015, according to Analysys Mason's recently updated Wireless networks tracker 3Q 2015. FD-LTE accounts for 348 (or 84%) of them, while TD-LTE accounts for only 55 (or 13%). It is not clear which duplexing technology – FD or TD – has been used for the remaining 10 launches (or 2%).

TD-LTE has been deployed more widely than FD-LTE in emerging markets, compared with its deployment in developed markets. This is partly because TD-LTE is more suitable than FD-LTE for broadband wireless access (BWA), which is in strong demand in emerging regions. The relatively low level of deployment of TD-LTE in developed regions such as Europe suggests that a 'spectrum crunch' either does not exist in these areas or has been mitigated by the release of substantial amounts of paired spectrum by national regulatory authorities (NRAs) to operators, including licences for the use of 700MHz and 800MHz digital dividend licences. In this comment, we focus on the reasons why there is an unequal distribution of TD-LTE network launches worldwide.

TD-LTE has enjoyed wider deployment than FD-LTE in emerging markets, where BWA is an attractive option

TD-LTE networks have commanded a greater share of LTE network launches in emerging regions compared with developed regions (see Figure 1).

Figure 1: LTE network launches by duplex type and region, 2Q 2015

Figure 1: LTE network launches by duplex type and region, 2Q 2015


BWA is an attractive technology option for operators in countries (particularly those in emerging regions) where wired access networks are either unavailable or unreliable. WiMAX technology was often deployed in the 2000s in order to provide BWA in emerging regions, but waning vendor, operator and consumer interest in this technology has prompted operators to reassess the future of their WiMAX networks.1

Operators consider TD-LTE to be an attractive BWA replacement for WiMAX because:

  • most WiMAX deployments use unpaired, TD spectrum in the 2.5GHz and3.5GHz bands, and these bands have since been designated by the 3GPP as being suitable for TD-LTE
  • TD-LTE is 'future-proof' – it has a reasonably long evolution roadmap and should remain a relevant and supported technology throughout the next decade
  • TD-LTE enables operators to reserve paired FD spectrum for mobile services, which mitigates against congestion in the spectrum from fixed–mobile substitution usage profiles.

Low TD-LTE deployment in developed regions suggests that there are no spectrum shortages or they have been eased

TD-LTE has not been widely deployed in developed regions – despite much speculation within the wireless industry during the past decade that a 'spectrum crunch' was inevitable. This seemed likely because mobile network operators' (MNOs') spectrum assignments were not able to adequately meet the increasing consumer demand for mobile broadband data. However, national regulators have addressed these concerns by awarding MNOs with more spectrum licences for the use of both paired and unpaired spectrum.

In particular, there has been a series of spectrum licence auctions in Europe during the past 5 years. NRAs in Europe have awarded unpaired spectrum licences to 21 operators, according to our Spectrum auction tracker. However, none of them has launched a TD-LTE network yet (see Figure 2).

Figure 2: Summary of spectrum licence auctions in Europe in which unpaired spectrum was offered to operators, 2010–2015

Country Auction date Unpaired spectrum offered (GHz) Number of operators awarded unpaired spectrum licences Number of TD-LTE networks launched by unpaired spectrum licence winners
Denmark 2Q 2010 2.6 3 0
Italy 3Q 2011 2.6 1 0
Spain 3Q 2011 2.6 0 0
Belgium 4Q 2011 2.6 1 0
Portugal 4Q 2011 2.6 1 0
Latvia 1Q 2012 2.6 0 0
Switzerland 1Q 2012 2.1, 2.6 1 0
Romania 3Q 2012 2.6 2 0
Netherlands 4Q 2012 2.1, 2.6 4 0
UK 1Q 2013 2.6 2 0
Slovakia 1Q 2014 2.6 1 0
Slovenia 2Q 2014 2.1, 2.6 2 0
Hungary 3Q 2014 2.6 1 0
Greece 4Q 2014 2.6 2 0

Source: Analysys Mason


Operators in Europe and other developed regions have been slow to deploy TD-LTE for several reasons.

  • Operators are focused on securing wide LTE coverage by deploying low-frequency FD-LTE networks. The European telecoms market is fiercely competitive. Much of the paired low-frequency (sub-1GHz) and mid-frequency (sub-2GHz) spectrum has been auctioned and refarmed in Europe in the past 5 years. Operators have focused on deploying FD-LTE networks using that spectrum, which ensures that wide coverage can be achieved quickly. In comparison, the unpaired spectrum available to operators is high frequency (supra-2GHz).
  • Weak wireless data traffic growth in Europe has discouraged investment in TD-LTE networks. Europe recorded the lowest annual mobile data traffic growth rates in 2013 of any region – 48% in Central and Eastern Europe, and 54% in Western Europe – compared with a worldwide average of 78%, as reported in Analysys Mason's Wireless network traffic worldwide: forecasts and analysis 2014–2019. Although TD-LTE deployments can add generous capacity to operators' networks (thanks to the large tracts of spectrum that are typical of high-frequency unpaired spectrum licences), the relatively low number of TD-LTE deployments in the region suggests that networks in Europe are not congested enough to motivate operators to invest in deploying these types of network.
  • Wireless broadband consumers in Europe mainly use mobile broadband rather than BWA. Fixed networks are adequate in most developed countries, and as a result, this weakens demand for BWA. Consequently, operators are focused on optimising their networks for handset users. For example, the iPhone is a popular handset in this region, but it only achieved TD-LTE support in its European variant for its latest iteration (iPhone 6/6+), which was launched in 3Q 2014.

1 See Analysys Mason's Analyst view: TD-LTE is the future for TD-SCDMA and WiMAX operators like China Mobile and Sprint