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Vodafone: No Need for LTE 'Til End of 2011

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan

Vodafone Group plc (NYSE: VOD) CEO Vittorio Colao is in no rush to roll out a brand-new proto-4G LTE network.

Colao, head of the world's largest operator by revenue, revealed today that Vodafone would not need to deploy LTE until the end of 2011 or "possibly 2012," and said that its evolved high-speed packet access (HSPA+) roadmap would meet its needs for the next two to three years. (See Europe's LTE Divide.)

"It makes a lot of financial sense to continue to upgrade our network," said Colao, on Vodafone's half-year results conference call this morning. "I don't see [LTE] as a huge revolution if you have a very good HSPA network... but [not before] back end of 2011, possibly 2012." (See Vodafone Reports Interim Result.)

He even hinted at the possibility that Vodafone may take its 3G network speeds up to 56 Mbit/s. "We're moving our network from 3 [Mbit/s] to 7 [Mbit/s], and from 7 [Mbit/s] to 21 [Mbit/s], then eventually 56 Mbit/s before the need for LTE," he said.

He said Vodafone is "very engaged," with its partners, Verizon Wireless and China Mobile Communications Corp. -- which are aggressively pushing the proto-4G technology -- but his remarks on the operator's timeline show how Vodafone is not yet ready to roll out the mobile broadband technology. (See China Mobile, V'Fone Test LTE, MWC 2009: Verizon Picks LTE Vendors, China Mobile Joins LTE Threesome, China Mobile Flexes LTE Muscle, and Verizon, Vodafone Head for LTE.)

And here's a good reason why Vodafone is happy to sit on the LTE sidelines for now: There is still plenty of capacity in its 3G networks in most areas. In Europe, while data traffic volume is 2.5 times that of voice traffic, network utilization was around 30 percent in the second quarter of the operator's 2009/2010 financial year. And only 5 percent of Vodafone's European sites have more than 90 percent network utilization during busy hours.

The operator claims it gets a 50 percent performance boost from HSPA+ at 21 Mbit/s compared to HSDPA at 7.2 Mbit/s.

Vodafone says about 40 percent of its European 3G network has been upgraded to 7.2 Mbit/s, and it plans to have 21-Mbit/s HSPA+ in hotspots in the region.

Vodafone has been testing LTE in Germany, using so-called "digital dividend" spectrum (790 to 862 MHz), but it is for the specific purpose of providing broadband connections to rural areas where wired technologies like DSL cannot be economically deployed. (See V'fone Germany to Test LTE for Rural Broadband and Vodafone Tests LTE With Huawei.)

— Michelle Donegan, European Editor, Unstrung

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User Rank: Light Beer
12/5/2012 | 3:52:52 PM
re: Vodafone: No Need for LTE 'Til End of 2011

The first introduction of the LTE, the first presentations on LTE, pointed that LTE will offer this traffic performance without changing the HW(and always in opposition with wimax). As the time passed, this "no need for HW change" has start to become a "legend", so obvioulsy... most of the operators will go for the chipest solution : changing the software as long as they can(delaying LTE). And everybody has forget the 3G implementation lesson in Europe - high cost of implementation, low number of end-users.


User Rank: Light Beer
12/5/2012 | 3:52:49 PM
re: Vodafone: No Need for LTE 'Til End of 2011

Overall, the push for LTE commercialisation, mostly by operators instead of by vendors which is different from the story of 3G take-up early this century, comes from the increasing pressure of its peer technology, wimax.

Vodafone Germany LTE800M initiative is also another story, which is in large stimulated by the political programme issued early this year by the German goverment which aims to generalize ~ 1 Mbps broadband access across the country by 2010.

Globally, Vodafone management is quite smart in selecting a right timing to market for LTE, as a pretty unified strategy for all its opcos.

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