August 9, 2010
Germany's mobile operators are plotting their first steps towards deploying Long Term Evolution (LTE) now that they have splashed out on new spectrum licenses, selected equipment suppliers, and scheduled pilot networks for the next-generation mobile broadband technology.
While there are hives of LTE activity across the country, the first commercial services are likely to be in rural areas where people do not even have fixed broadband connections, as operators focus on meeting the government's national broadband coverage targets and certain license obligations. (See V'fone Germany to Test LTE for Rural Broadband.)
Widespread, commercial LTE services are still a few years away in Germany, according to Lee Sanders, a partner at Analysys Mason .
"I don't think [the operators] need the [new] spectrum yet for capacity reasons," says Sanders. "It will be a few years before they run out of capacity."
The focus now is on the coverage obligations that the regulator, Bundesnetzagentur (BNetzA) , attached to the licenses for 800MHz spectrum in the country. These apply to Deutsche Telekom AG (NYSE: DT), Telefónica O2 Germany GmbH & Co. OHG , and Vodafone Germany , which each won licenses in this frequency band in the spectrum auction that ended in May. (See German Spectrum Auction Ends, Raises €4.4B.)
These three operators are required to cover 90 percent of the population with LTE mobile broadband at 800MHz in the most rural areas before they can go on to deploy networks and offer services in more populated areas. Only the 800MHz spectrum has such a coverage obligation, even though spectrum in the 1.8GHz, 2GHz, and 2.6GHz bands was also released in the auction.
The deal is that only one operator has to meet this obligation in each specified area, and the regulator has left it to the operators to decide among themselves who will deploy where. So it's possible that there could be a situation where the operators get together and divvy up the under-served broadband regions so that network infrastructure is not duplicated.
But it is too soon for the operators to reveal how they will go about this, according to a spokeswoman at Vodafone Germany and a spokesman from Telefónica 02 Germany.
Technically, the operators don't yet have their new frequencies. The regulators and the operators are still working on the actual spectrum assignments that will be awarded from the recent auction. Deutsche Telekom, Telefónica O2, Vodafone, and E-Plus Service GmbH & Co. KG each won a certain amount of blocks of spectrum in the auction, but now the regulator has to determine exactly where those blocks of spectrum will sit in the frequency bands.
This unfinished auction procedure indicates that it is still early days for LTE rollouts in Germany. But the LTE activity is picking up. Here's what the operators are planning so far:
Deutsche Telekom CTO Olivier Baujard first told Light Reading Mobile in May that it plans to start LTE trials in the 800MHz spectrum by the end of this year. The operator has not yet selected vendors for its LTE project. (See Deutsche Telekom to Trial LTE This Year and MWC 2010: Olivier Baujard, CTO, Deutsche Telekom.)
E-Plus missed out on acquiring valuable 800MHz spectrum in the German auction, but it snapped up spectrum in the 1.8GHz, 2GHz, and 2.6GHz bands. The operator's plans for LTE are not yet clear, and the operator had not answered Light Reading Mobile's questions as this article was published.
Telefónica O2 Germany plans to start building four LTE pilot networks next month, using equipment from Huawei Technologies Co. Ltd. and Nokia Networks . In the cities of Halle and Munich, the operators will test the mobile broadband technology in 2.6GHz spectrum. In two suburbs of these cities, Telefónica O2 will test LTE at 800MHz. The operator says it plans to upgrade existing base station sites for these pilots. (See O2 Germany Preps LTE Pilots and NSN Launches German LTE Pilot.)
Vodafone Germany says it will start upgrading 1,500 base stations to LTE next month, using equipment from Ericsson AB (Nasdaq: ERIC) and Huawei. The operator aims to complete the upgrade within a year and expects to offer broadband speeds of 3 Mbit/s in rural areas. The first devices offered will be LTE modems, and later it will offer USB sticks and laptops with built-in LTE modems. (See Ericsson, Huawei Land Vodafone LTE Gig, VOD Germany Chooses LTE Vendors, and Vodafone Tests LTE With Huawei.)
— Michelle Donegan, European Editor, Light Reading Mobile
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