Musings on TeliaSonera’s LTE Rollout (Part 1)

Last week I was in Stockholm, the Swedish capital, attending the LTE Forum 2010 event. I had the privilege to hear first-hand from the world’s first operator going live with LTE –TeliaSonera – and let me tell you, it was exciting.

As you may know, TeliaSonera recently switched on their LTE network in Stockholm and Oslo and this was definitely the talk of the town. Clearly this is a landmark moment for LTE as TeliaSonera goes into the mobile history books forever as the first operator going commercial – beating Verizon, NTT DoCoMo and various others in the bragging rights race for being first.

As the industry celebrates this milestone moment, here are a few observations pertaining to this first rollout and what potentially lies ahead on the LTE road:

  • DevicesSamsung’s LTE dongle is currently the only device being offered – but expect more to come as the offering will expand from the current data-only mode to supporting a full suite of data, voice, SMS and service transparency for a wide range of applications. Support of voice on LTE still remains a major issue. Largely speaking the industry has aligned along the ‘One Voice’ – or Voice over LTE (VoLTE) – initiative which is based on IMS for voice but there is lot more work that needs to be done in 3GPP to have a clear standard for voice support in LTE beyond circuit switched (CS) fallback. Clearly VoLGA (Voice over LTE via Generic Access) has been marginalized with T-Mobile being the only operator supporting this architecture.
  • Customers: TeliaSonera’s initial survey results show that consumers are pleased with higher data rates with more than half saying that they would never go back to 3G – now that’s a strong validation of the quality of experience that these consumers are getting from LTE! And it’s worth noting that 43% of those surveyed were iPhone users – so these are data-savvy subscribers that we are talking about. And what are these folks doing with this new LTE network and higher speeds? They are downloading larger files, watching online videos and streaming and surfing the web more, which clearly validates the latent data demand in the marketplace. But are they willing to pay more?
  • Pricing: Well, TeliaSonera has decided to offer flat rate ‘all-you-can-eat’ data plans with data caps. Consumers can sign up for an SEK599 (approx $80USD) per month plan in Stockholm with data caps at 30GB. Food for thought: if higher data rates are going to increase YouTube-like video consumption, where will additional revenues come from? Over the past couple of years the industry has indulged itself in broad discussions on pricing plans for LTE ranging from device-based to usage-based to speed-based, but clearly the first rollout suggests only a slight premium for higher rates but still basically a flat rate model. The famous Light Reading graph showing the increasing ‘traffic vs. revenue growth’ gap largely remains a challenge, at least for TeliaSonera. It will be very interesting to see what LTE pricing plans other operators offer as they go commercial…

Please check out Part 2 of my thoughts and observations surrounding TeliaSonera’s 4G rollout.

PLUS: Got feedback? Use the comment area below to let me know what you think about TeliaSonera, LTE, Femtocells, or related matters.

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