Telcommunication operators target $100bn new wireless market

ABUJA; Telecommunications operators in Nigeria’s highly competitive market are making significant investments in broadband network testing and upgrades for migration to Long Term Evolution – a new wireless platform which offers better broadband speeds and efficiency, as they look to drive up data revenues.

Global service revenues generated by LTE mobile networks are forecast to reach $100 billion by next year, and mobile operators in Nigeria are all gunning for a piece of the market. This move is coming on the heels of the recent declaration by the Nigerian Communications Commission (NCC) that new frequency spectrum specifically for LTE/4G would be made available to operators in 2015.

Telcommunication operators target $100bn new wireless marketA new report also suggests that mobile network operators in the country have ploughed in $2.24 billion (N347 billion) into network and infrastructure expansion projects in the preceding year.

Industry sources told BusinessDay that a substantial size of the figure has gone into network preparedness for migration to the new platform. Kamar Abass, country manager, Ericsson Nigeria, told BusinessDay that, “As the demand for data and broadband grows, migrating to LTE will become a necessary step for operators, in order to enable more users access high speed data services within the limited spectrum available. LTE technology enables more efficient use of spectrum.”

Globacom and Airtel Nigeria have already announced that they have completed LTE testing. Only recently, MTN deployed the latest wireless packet core network technology which allows operators to introduce newer, smarter functions and capabilities to enhance the mobile broadband experience for end users. The router will support the current 2G, 3G networks of MTN, and will also be able to support future upgrades to LTE.

With about 113 million active telecoms subscriptions in the country, network operators are optimistic that the market holds immense potentials waiting to be tapped. Industry analysts said yesterday that this new wireless platform provides them with the capability to offer innovative solutions, well beyond mundane voice and data services.

This is indeed critical, in view of the steady decline in voice revenues and as operators look earnestly to data services as the next revenue generating stream. Usen Udoh, director, high communications, Accenture Nigeria told BusinessDay that with LTE technology there is every likelihood that telecoms operators would be ready to deploy LTE services by 2015.

“LTE is completely unlike GSM and CDMA technology. Operators will be required to make significant investments in new base stations and equipment. They cannot use existing infrastructure to do LTE.”

Abass agrees with Udoh, further adding that government should speedily make spectrum available to telecoms operators to roll out innovative broadband services.

“If you are offering some 100 megabits per second (Mbps) or 150 mbps as only LTE can offer, you need to build the backhaul for that first. Today, it is hard enough trying to backhaul 3G services. “I think you can just forget about backhauling LTE with this current infrastructure”, he said.

Eugene Juwah, executive vice chairman of the NCC had earlier promised that the commission would this year auction 2.6GHz and the remainder of 2.3GHz spectrum to increase broadband access and make internet pervasive in the country. “The world has decided to adopt LTE as the next generation of technology after 3G. What I have said on several occasions and I think the NCC understands this, is that they have to get that spectrum ready.

“They need to clean it up, and remove people who are there, who are running maybe microwave or whatever. Take them into a different spectrum so that they can free up that spectrum, ready to award it to the four large telcos who can engineer that spectrum in order to support the growth and the demand for mobile broadband because what is critical for Nigeria is to have a world class mobile broadband network”, Steve Evans, chief executive officer, Etisalat Nigeria was quoted in a report.

Speaking in the same vein, Neil Mawston, executive director, Strategy Analytics, said it was clear that 2013 would be the year of 4G/LTE. “LTE has quickly become a high-growth, high-value market that no operator, service deployer, component maker or device vendor can afford to ignore.”

Analysts believe broadband service will truly take-off in 2015 as the Nigerian Communications Commission (NCC) plans to issue new spectrum frequency, especially for LTE by 2015 after the broadcast industry has completely migrated to digital broadcasting, freeing up existing spectrum resources that would be re-farmed by the telecoms regulator and made available to telecoms networks.

LTE is a mobile network technology that can be deployed by telecoms operators on both the GSM and the CDMA technology path. Depending on the spectrum available, live LTE networks can deliver very fast data speeds of up to 100Mbps in the downlink and 50Mbps in the uplink.

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