BARCELONA -- Mobile World Congress 2011 -- Hutchison 3G Austria GmbH plans to rip out its existing mobile network, built using radio access network (RAN) infrastructure from Nokia Networks , and replace it with new RAN, backhaul and core network technology from ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

The move comes as the operator prepares to launch LTE services later this year following the award of spectrum in the 2.6GHz band in September 2010. (See Euronews: Sept. 21.) The network, covering 4,000 sites across Austria, is due to be upgraded with ZTE RAN equipment by the third quarter of this year. The RAN is multimode, and includes the dual-carrier HSPA+ capabilities that will initially enable downlink speeds of up to 42 Mbit/s. The same RAN will then be used for the launch of LTE services -- first FDD Long Term Evolution (LTE), followed by Long Term Evolution Time Division Duplex (LTE TDD) services.

Hutchison 3G Austria had already switched on HSPA+ using its current NSN infrastructure, so why the rip-and-replace strategy? CEO Jan Trionow said that "rather than undertake the incremental expansion of the existing network, the time was right for a radical shift with a new network." (See Hutch 3G Austria Deploys HSPA+.)

So ZTE will be the operator's only supplier for its network infrastructure. Could that decision have anything to do with the fact that ZTE is also providing vendor financing, using its credit lines with major Chinese banks, to pay for the new network rollout? "Finance was one of a number of factors," said Trionow. (See ZTE Bags Another $10B in Credit.)

The CEO needed to add extra capacity to the carrier's network to manage the rapid increase in data traffic that Hutchison 3G Austria's 1 million customers are generating. Trionow noted that since the introduction of a new smartphone-based marketing plan in June 2010, the average monthly volume of data consumed per user had risen from 62 Mbytes (May 2010) to 428 Mbytes (December 2010). As a result, Hutchison 3G Austria's network is now carrying more than 1 Petabyte (1,000 Terabytes) of data per month.

And that figure is only likely to grow, especially as the operator introduces LTE services. Trionow said the plan is to switch on LTE FDD capabilities first, and add capacity using LTE TDD later. "[LTE TDD] is a cheaper way to introduce greater capacity and higher speeds," with both flavors of LTE utilizing the 2.6GHz band.

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— Ray Le Maistre, International Managing Editor, Light Reading