KDDI Picks Challengers for LTE Deployment

KDDI Corp. , Japan's No. 2 mobile operator, has issued contracts for LTE radio infrastructure to Motorola Inc. (NYSE: MOT) and NEC Corp. (Tokyo: 6701) and remains on track to launch commercial services in 2012. (See KDDI Picks Moto, NEC for LTE.)

The contracts are most notable because they don't feature any of the Big Four mobile infrastructure vendors -- Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , or Nokia Networks -- that have dominated the LTE (Long-Term Evolution) market so far.

Telia Company doled out the first LTE contracts to Ericsson and Huawei, while Verizon Wireless opted for Alcatel-Lucent and Ericsson as its initial LTE suppliers; and NTT DoCoMo Inc. (NYSE: DCM) is working with Fujitsu Network Communications Inc. and NSN. (See MWC 2009: Verizon Picks LTE Vendors.)

According to Heavy Reading senior analyst Gabriel Brown, the reason for KDDI's choice could lie in the different form factors being developed by the two challengers.

Both Motorola and NEC are producing LTE-only base stations, whereas the Big Four are concentrating more on multimode solutions, he says. This sits well with KDDI which, as a CDMA operator, has no interest in combined GSM, UMTS, and LTE products.

NEC has already developed an eNodeB with a single radio equipment controller, which can be mounted in a single, standardized rack space (1U), that can scale to support 3x20 MHz sectors in a 4x4 MIMO multiple antenna configuration. It also has a relatively advanced small-cell strategy, according to Brown, which could be significant in the built-up, densely populated, and high capacity areas of Japan.

Motorola has developed its LTE solution on the same platform as its WiMax products and claims that this combined orthogonal frequency-division multiplexing (OFDM) experience provides it with a competitive advantage. The U.S. vendor is also claiming to have a 1U device, according to Brown.

(For more on the different LTE strategies being pursued by mobile infrastructure vendors, see LTE Base Station Challengers and Brown's full Heavy Reading report, "LTE Base Stations & the Evolved Radio Access Network.")

KDDI will not be the first in Japan to introduce LTE, as market leader NTT DoCoMo is on schedule for a 2010 launch. (See DoCoMo Shells Out on LTE.)

KDDI has set a target to begin testing in mid-2010 and launch commercially 2012, which is on a similar timetable to SoftBank Mobile Corp. , the country's third operator, which has gently eaten into the market shares of the top two since entering the market by buying Vodafone KK in 2006.

— Catherine Haslam, Asia Editor, Light Reading