August 9, 2010
By Maisie Ramsay
When Reliance Industries paid $1 billion for control of Indian broadband company Infotel hours after it became the only company to win a slice of 4G spectrum covering the entire country, shock waves ran through the industry – and not just because of the improbability of the deal. Reliance announced it was going with LTE in a country many believed would be dominated by WiMAX.
Nearly two months later, the state of 4G deployments in India has become murkier, not clearer. Unconfirmed reports surfaced that Reliance was leaning toward WiMAX, not LTE, and had even begun trials because technology was mature enough for immediate deployment.
But several companies working directly with Indian operators to land deals for their wireless broadband deployments told Wireless Week on condition of anonymity that several key carriers, including Reliance, were leaning toward LTE, refuting earlier reports about the company’s flirtation with WiMAX.
Operators are keeping their thoughts on the subject under wraps, and depending on who you ask, the country is either leaning entirely toward WiMAX, LTE or a combination of both.
Current Analysis researcher Peter Jarich says it’s impossible to tell which way Indian operators will swing without insider knowledge, but he says that the decision of Reliance Industries, the only private company with pan-India BWA spectrum, will be hugely influential for other operators.
“If Reliance moves in one direction, there may be an incentive for other operators to follow,” he says.
Reliance did not reply to requests for comment on the issue but there are few reasons its motivation for picking one technology over another would be substantially different from other carriers.
Just like every other Indian company with BWA spectrum, Reliance must choose between the head-start advantage of WiMAX and the immense global scale LTE will have in the years ahead.
“Reliance could go with LTE for the sheer fact that it comes down to scale for devices and roaming,” Jarich says. “There’s this expectation of scale, which means cost benefits and more [variety] in devices. I think that’s what is really pushing people toward LTE.”
Altair Semiconductor co-founder Eran Eshed, who has participated in talks with Indian BWA spectrum holders about their 4G deployment plans, says the recent momentum of TD-LTE has shaken their conviction about WiMAX.
“Some are trying to figure out how the world changed in a few months,” Eshed says. “They were in the comfort zone with WiMAX, assuming that TD-LTE was far behind.”
Eshed is currently in India, brokering meetings between OEMs and Indian operators with 4G spectrum. Though he declined to have the pending decisions of specific companies published on the record, Eshed says he is “confident” that Tier 1 operators in India will go with LTE.
Like Jarich, Eshed believes the scale advantage of LTE will trump the time-to-market advantage of WiMAX. “You don’t make a 10-year decision based on a six-month tactical advantage,” he says. “These are huge strategic decisions that have major implications beyond CPE [customer premise equipment] costs.”
WiMAX has seen its influence weaken significantly in recent months despite new deployments and the launch of Sprint’s first 4G handset, the HTC Evo.
Alvarion, a key player in the development of the standard and a long-time pure-play WiMAX equipment vendor, recently said it was adding TD-LTE to its portfolio. Russian operator Yota decided to build out the rest of its 4G network with TD-LTE instead of WiMAX. Clearwire announced it was testing LTE and Cisco decided to stop making WiMAX base stations.
“In three years, when devices are generally in volume parity, my prediction is we won’t have too many more greenfield WiMAX customers,” says Fred Gabbard, vice president of product management for Motorola Networks. “LTE is going to drive volume that WiMAX can’t compete with.”
Between a Rock and a Hard Place
The difficulties of choosing between the head start offered by WiMAX and the growing global support for the LTE ecosystem has resulted in a proliferation of theories about potential 4G deployment scenarios in India, but most of these theories have major logistical problems.
One popular theory espoused by analysts and industry players alike is that India may adopt WiMAX as an interim measure to LTE. On the face of it, it sounds simple: Deploy WiMAX now and switch to TD-LTE at a later date.
The two technologies are so similar that some infrastructure companies say the switch is as easy as a software upgrade. But Eshed and others believe transitioning from WiMAX to TD-LTE is far from trivial, despite the similarities between the two technologies.
Motorola estimates that up to 80 percent of the hardware in a WiMAX network can be reused for a transition to LTE. That’s all well and good, but there’s a catch: Switching from one technology to another renders all of the legacy devices running on the network ineffective.
“The issue is not whether I can do a software upgrade from WiMAX to LTE, but that I break all the devices underneath that footprint the night I switch over,” Gabbard says. “Until we have devices that can do both LTE and WiMAX, there’s no way to not disrupt the customer base.”
Gabbard, who is working with Indian companies as they weigh the pros and cons of WiMAX and LTE, says the near-term importance of a quick deployment with WiMAX and the long-term implications of the scale of LTE presents a conundrum for the Indian market. “They’re really struggling because they’re weighing the headache of a migration against an early start,” he says.
Indian operators could also choose to deploy WiMAX in key markets and then overlay it with LTE, as Yota planned to do before Russian regulators put a kibosh on the plan. Clearwire has also hinted it may pursue such a strategy depending on how its tests in Phoenix, Ariz., pan out.
An overlay deployment could work in India if more BWA spectrum opened up, but current spectrum allocations aren’t generous enough to make such a strategy viable, says Kunal Bajaj, Analysys Mason’s director for the Indian market. “In BWA we don’t have 20 MHz of spectrum, so unless they are willing to run two 10 MHz networks separately, it’s not practical,” he says.
From a logistical standpoint, deploying one technology and sticking with it could prove the easiest way forward. Bajaj believes that if the ecosystem can meet certain deadlines and price points, it will be the best choice for Indian operators, specifically Reliance.
The variety of LTE that could be used in India’s unpaired BWA spectrum band, TD-LTE, is somewhat behind its more common FDD brethren, which is itself behind WiMAX. The lag might not be as severe as it sounds, however. A commercial TD-LTE network deployed by Motorola has been operating since spring at the Shanghai Expo, chipsets for the technology are already available and some of the industry’s biggest infrastructure players are touting their TD-LTE solutions.
Ken Wirth, president of LTE/4G solutions for Alcatel-Lucent, says Indian operators have substantial reservations about the lag time between WiMAX and LTE. Wirth, who recently met with seven “key customers” in India, says he had to dispel a number of rumors about LTE in India.
“There was a lot of fear, uncertainty and doubt cast about the lead WiMAX has over LTE,” he says. “The preconceived notion was that LTE was two to three years away from commercial. I told them we’re commercial now in preparation for Verizon’s launch, and that platform does FDD as well as TDD… A couple customers were thinking of going with WiMAX and now they’re reconsidering.”
Wirth says the time-division variety of LTE that will be used in India is between three and six months from commercial viability. Alcatel-Lucent is working with four OEMs to develop devices for the TD-LTE standard and will have another four coming on board by the end of this year, he says.
By the end of his discussions with Indian operators, Wirth felt more optimistic about TD-LTE’s chances in India. “I was really surprised at the receptivity of the Indian carriers once they understood the facts around the specific deliverables from our LTE program,” he says.
As it stands now, Qualcomm is the only company with BWA spectrum with concrete plans to deploy TD-LTE. Reliance has been silent on the subject since voicing its support for the technology in June. Reliance’s decision could have an influence on some of the other BWA spectrum winners, although state-owned operators BSNL and MTNL are sure bets for WiMAX, Bajaj says.
The Ripple Effect of India’s Choice
India is not just any market. It presents a massive growth opportunity to not only infrastructure vendors, OEMs and operators, but to the technology standards as well.
India’s population is almost as large as China’s despite the disparity between the countries’ land mass. The most recent estimates from the World Bank put India’s population at 1.14 billion and China’s population at 1.32 billion. India has just 635.5 million mobile subscribers and the country’s government has a comparatively friendly attitude toward foreign companies, presenting a prime opportunity for investment and growth.
India is to the wireless industry what veal is to top chefs, and its decision either way on LTE or WiMAX could have a major influence on the future of each technology, especially the single-band variety of LTE.
TD-LTE’s major backer is China Mobile. Despite the carrier’s enthusiastic support for the technology – significant because China Mobile is the largest operator in the world based on subscribers, with 554 million of them – it’s essentially ham-strung by the Chinese government when it comes to its 4G deployment plans. It’s not something the industry likes to admit, but nobody really knows when China Mobile will be able to move ahead with its 4G plans.
The ambiguity over the timing of China Mobile’s mobile broadband deployments makes India the most likely country to have a game-changing effect for the time division variety of LTE. Still, deployment plans in India aren’t much clearer than the timing of 4G in China. Mobile broadband deployments in India could have a major effect on the near-term success of TD-LTE.
Of course, India isn’t the only market likely to deploy TD-LTE. Key operators in countries such as Germany, Denmark and Russia all own unpaired spectrum they could use to deploy LTE, though their plans are far from concrete. The size and scale of the Indian market is second only to China, however, making its importance to the future of both WiMAX and LTE undeniable.