1. Prin. L. N.

Welingkar Institute of Management Development and Research, Bangalore Report on TD-LTE and India By Kaushik Maitra (PGDM eBusiness-I) and Rohit Singh (PGDM eBusiness-II) Reviewed by Prof. Shriram KothapalliTD-LTE and India | 1 2. IntroductionOurs is a country where people are obsessed with mileage, good food, and not to mention,also ultra-low call rates. 3G was launched in India in late 2008 by MTNL in Delhi and withinone year a lot of hype was created, especially on the internet, about 3G. This resulted in theentry of quite a number of players in the 3G market within the next two years. They wereproviding a plethora of services, which were heard about before but remained unseen, e.g.,video calling, mobile broadband, live TV, etc. Since, India still could not banish License Rajeven after 17 years of commencement of economic reforms, the prospective players wereasked to pay a heavy price, which was eventually passed to the end-consumer to bear. Thus,the reception of 3G was rather reluctant.The 4th generation telephony services were introduced in India by Airtel (in Kolkata) in Aprilearlier this year. About two years before the launch, another license was auctioned theBWA spectrum license. Only one player got the pan-India license HFCL Infotel. Withinhours after the conclusion of the aution, Reliance Industries Limited, the conglomeratespearheaded by Mukesh Ambani, bought 95% stake in HFCL Infotel, and thus, a newcompany, Reliance Infotel, was formed. Airtel, Aircel, Augere, Tikona and Qualcomm alsowon 4G licenses. But another fundamental error was made in the process auctioning of theband of 2300 MHz instead of the 1800 MHz band. In most parts of the world, the frequencybands of 700 MHz, 1800 MHz and 2600 MHz are in use.What is 4G-LTE?LTE is the initialism of Long Term Evolution or 4G LTE, is a standardfor wireless communication of high-speed data for mobile phones and data terminals. It isbased on the GSM/EDGE and UMTS/HSPA network technologies, increasing the capacityand speed using a different radio interface together with core network improvements. Theworlds first publicly available LTE service was launched by TeliaSonera inOslo and Stockholm on 14 December 2009. LTE is the natural upgrade path for carriers withGSM/UMTS networks, but even CDMA holdouts such as Verizon Wireless, who launchedthe first large-scale LTE network in North America in 2010.Although marketed as a 4G wireless service, LTE as specified in the 3GPP Release 8 and 9document series does not satisfy the technical requirements the 3GPP consortium has adoptedfor its new standard generation, and which were originally set forth by the ITU-R organization in its IMT-Advanced specification. However due to marketing pressures andthe significant advancements that WIMAX, HSPA+ and LTE bring to the original 3Gtechnologies, ITU later decided that LTE together with the aforementioned technologies canbe called 4G technologies. The LTE Advanced standard formally satisfies the ITU-R requirements to be considered IMT-Advanced and to differentiate LTE-Advanced and WiMax-Advanced from current 4G technologies, ITU has defined them as"True 4G".TD-LTE and India | 2 3. LTE has two variants TDD-LTE and FDD-LTE. TDD and FDD stand for time divisionduplexing and frequency division duplexing, respectively. Following is a brief comparisonbetween the two: -Parameters TDD-LTE FDD-LTEDefinition The communication is done The communication is using one frequency, but the done using two frequencies time for transmitting and and the transmitting and receiving is different. This receiving of data is method emulates full duplex simultaneous. communication using

a half duplex link.Frequencies Communication happens Two frequencies are used only on one frequency, but simultaneously, one for the time of sending and transmitting and the other for receiving are different. receiving.Interferences More LessFrame Structure Different subframes are used Every downlink subframe for downlink and uplink. can be associated with uplink subframe.Spectrum Efficiency Low High Table 1: LTE-TDD vs LTE-FDDDeployment of 4G-LTEDespite the huge success of HSPA, LTE is the fastest developing mobile communicationssystem ever. The primary drive towards LTE by operators comes from the need for networkcapacity, performance management and efficiency. Deploying LTE is critical to maintain theuser experience of mobile broadband, and for business growth. LTE enables operators tosupport future mobile data demand and is essential to address the mass market and achievethe potential of a fully connected world. GSAs Evolution to LTE report (October 1, 2012)confirmed 351 operators are investing in LTE, 41% more than a year ago. 105 operators havelaunched commercial LTE networks in 48 countries. Another 194 network deployments arein progress. 52 additional operators in 11 more countries are at a pre-commitment stage,engaged in technology trials, tests or studies, etc. GSA forecasts that 159 networks will becommercially launched in 68 countries by end 2012. This figure should rise to at least 195live networks in 72 countries by end 2013. The ecosystem of LTE user devices is rapidlydeveloping; over 400 products confirmed by GSA on July 3, 2012.TD-LTE and India | 3 4. Fig. 1 Growth of LTE around the worldFocus On TD-LTE11 operators have launched commercial service using the TDD mode in unpaired spectrum,which is also part of the LTE standard, with 16 more commercial network deployments inprogress, and several more operators engaged in trials and studies. The LTE TDD mode is theperfect choice for providing high speed mobile broadband access in unpaired spectrum. Thelargest contiguous bands are at 2.3 GHz (100 MHz) and within the 2.6 GHz band (50 MHz)and these are the main bands for LTE TDD deployments in most regions. LTE TDD andFDD are complementary and may help with international roaming as some devices willsupport both LTE FDD and TDD. While some operators in Latin America and the Caribbeanhave already commercially launched LTE services, many more are preparing for itsintroduction in the coming weeks and months.With the support from Asian telecom operators including China Mobile, Softbank, BhartiAirtel, Reliance Infotel, as well as major equipment and chipset vendors such as Huawei,Samsung, ZTE and Qualcomm, TD-LTE addressable market should reach 40% of the globalpopulation (~ 2.5 bn people) in next five year and its subscriber base will touch 70.7 millionby 2016.Substantial Scope of BWA in SME SegmentAccording to a survey conducted by Google, less than two million of SMEs are online. Of the800 SMEs surveyed by Google, 57% used internet as a sales channel to grow their business.Around 70 percent of them use internet for vendor and supplier search and 40% use internetTD-LTE and India | 4 5. to advertise online. Currently the segment is largely unpenetrated. BWA has a substantialpotential to tap into this segment.There are around 27 million SMEs geographically dispersed across India. Moreover, mostofthese SMEs are located outside of Metros in Tier II cities and rural areas. With the lack ofleased line infrastructure in these areas, BWA has a substantial potential to provideconnectivity in a cost effective and timely manner. Moreover, the leased line operators mightnot find it feasible to provide services to SMEs that are both geographically disbursed andpresent in remote

areas. Fig. - SME Geographic Distribution in India Source : United Nations Industrial Development Organization, March 2012 Table 2: Forecast of TD-LTE Network Deployment Operator 2012 2013 2014 Reliance Infotel 5,000 15,000 20,000 Bharti Airtel 2000 3000 5,000 Others (Aircel, Tikona, Augere) 500 3000 5,000TD-LTE and India | 5 6. Table 3: TD-LTE Market OpportunityCountry Operator Current Launch Total Tota Penetration TD-LTE Plan Addressable Subs by 2016 Subscribers Population (mn) (mn) (mn)China China Phase 1&2 in 1340 800 7% 56 Mobile 2012, nationwide by 2013India Reliance Trial in 2012, 1200 10 Infotel nationwide launch in 2013India Bharti 4 cities in 2012 237 (in 4 circles) 200 1% 2.0 AirtelJapan Softbank launch in Q1 125 30 5% 1.5 2012, nationwide 2012Saudi Saudi 2012 60 24 5% 1.2Arabia TeleComTotal 40 % of Global 2725 70.7 PopulationTD-LTE saw rapid evolution, strong international support, and increasing maturity of theecosystem. The following timeline (Fig. 2) below explains how TD-LTE achieved this feat: - Fig. 2: Evolution of LTE-TDDTD-LTE and India | 6 7. Impact of LTE in IndiaThere could be three main reasons for operators to adopt TDLTE technologies: The availability of TDD spectrum The cheaper licence fees for TDD spectrum compared with FDD spectrum, and Indian operators (Reliance Infotel, Airtel, Tikona Digital) commitment to supporting the development of the TD-LTE ecosystem.Following is the operator-wise analysis of the telecom environment that will be evolved by2016, that is, after the launch of 4G-TD-LTE: - 1. Reliance InfotelThe expectation from Reliance Infotel is that the 3-5 year growth story will be driven by theBWA business. The 4G technology which is TD-LTE is currently in the very early stages ofevolution of the ecosystem handsets/devices, network infrastructure, etc. During that time,development of the ecosystem, infrastructure rollout and subsequent off-take will be seen.Reliance may undertake some city (possibly a metro) deployment similar to Airtel. The fullimpact of this will likely be felt on the market only over 3 years.It is also expected that the immediate impact of BWA in 2013 will be felt on the databusiness in limited cities (Possibly top 10 cities). Dongles and hotspots are likely to adaptquickly. Tablets are expected to follow next. The handset environment is likely to howevertake longer. Neither the technology nor the development and off-take of handsets are in astage where this will threaten the incumbent GSM/ CDMA and WCDMA business from a 2year perspective.In an analyst meeting on July 12 2010, Reliance Infotel highlighted the following points: 1. It will invest Rs. 48 bn (US$ 1.1bn) over the next 2-3 years to launch wireless broadband services and does not intend to enter the already crowded 2G-based telecom business. However, the company mentioned that it may enter the voice business through IP enabled voice (like VoIP). 2. Management said the roll-out of services will be made in phases and will initially target urban and semi-urban centres. 3. RIL expects the BWA (Broadband Wireless Access) service to achieve cash profit in three years from launch time 4. As per RIL, a pan-India BWA rollout would require 15,000 towers and the company plans to partner with existing infrastructure providers for most of its rollout requirements.TD-LTE and India | 7 8. Fig. 3: RILs 4G Deployment Status and Plans 2. Bharti AirtelIndia is still in early days of its 2.1GHz 3G launch there are fewer than 15mn 3G subs byDecember 2011. Undoubtedly, take-up rates will pick up as coverage/ ecosystem evolves andas perception and pricing of data improves; but the key battle will be the insufficient 5 MHzof 3G spectrum, which will keep a lid on data penetration rates. Table 4 : 3G Uptake in India Bharti Idea RCOM 3G Active Subs (000s) 2400 2250 2800 % of total Wireless Subs

1.4% 2.1% 1.9% Average 3G usage MB per Month 235 230 220 3G ARPU increments 79 75 72 3G as percentage of Data /Vas Revenues 3% 8% 7% 3G as percentage of wireless Revenues .5% 1.1% 1.3% 3G as percentage of wireless data revenues # 29% 31% 14% Number of 3G BTS deployed for 3G 16000 9000 10000During the Broadband Wireless Access (BWA) auctions last year, six bidders won thisspectrum in select circles, with Reliance Industries (RIL) the only company winning 20MHzin all circles. Other existing operators to win this spectrum include Bharti in four circles andAircel in eight circles. This could further restrict/ delay the rollout as initial focus by Bhartiand Aircel will more likely be on 3G services, where the operators have recently signed theroaming agreements.TD-LTE and India | 8 9. Table 5 : Segment Wise Data Adoption potential based on technology 2G/3G/4GSegment Dominant Remarks Technology Leased line - Amongst large corporates, BWA will have a limitedLarge Corporates impact. - Option of Leased lines or wireline, enhanced QoS and Speed.SMEs BWA ( 4G) - BWA has the potential to expand presence in the SME segment, 3G would be the dominant technology in the high-end retail market before penetrating the corporate and SME segments. On the other hand, 2G is expected to continue to have a significant presence in the low-end retail segment.Affluent Retail 3G followed - the immediate impact of BWA in 2013 will be felt on by 4G the data business. Dongles and hotspots are likely to adapt quickly. Tablet devices will follow next. The handset environment is likely to however take longer. Neither the technology nor the development and off- take of handsets are in a stage where this will threaten the incumbent GSM/ CDMA 2G business from a 2-year perspective.Mass Retail 2G Followed - Price Sensitive by 3GWireless 4G followed - 4G will be prefered if ubiquitous network is available.Dongle/Pocket by 3G or Ev-Router DO4G Deployment StatusAirtel has BWA spectrum in four circles, and there are good reasons to consider that Airtelcan acquire Qualcomms BWA spectrum in further four circles. Airtel is well placed tocapture BWA offtake over the next 3 years, to hold off the threat from RILs growth andwould benefit if regulations shift to favour BWA operators versus incumbents. Airtel hasselected this BWA suppliers and deployment in some cities are underway. Airtel haslaunched TD-LTE service in Kolkata on April 10,2012. Approximately 500 enodeB wereused in Kolkata for the commercial launch. The coverage is mostly in pockets andapproximately 250 kilometers of urban area is covered during initial launch. Airtel hascreated many experience zones for users to test TD-LTE as compared to 3G. Bharti willlaunch 4G serivce in Bangalore and Pune during next quarter.TD-LTE and India | 9 10. Fig. 4: BWA Deployment History & Plans of Bharti Airtel Fig. 5: Airtel 4G Equipment Vendors Table 6: Bharti BTS Deployment Summary 2009 2010 2011 2012 (Estimated)GSM (2G) 95,000 104,000 116,000 124,000WCDMA (3G) - - 15,000 22,000TD-LTE (4G) - - 2,000TD-LTE and India | 10 11. 3. AircelAircel was initially inclined toward using BWA spectrum for WiMax rollout given that itprovided WiMax solutions (even before auctions on unregistered spectrum); but withimproving visibility of the LTE ecosystem it is now focusing on LTE rollout. It is believedthat Aircels strategy will be similar to that of Airtel use LTE to complement its existing3G business by focusing on tablets and/or dongles on LTE, and using LTE as a backbone totransfer the traffic load. 4. TikonaTikona is providing wireless broadband (largest outdoor 4G WiFi network, 42,000 basestations) using 83 MHz (2.400 to 2.483

GHz) in the unlicensed band in 36 top cities, and itsproduct offerings are targeted towards enterprise consumers and household customers. InAugust 2010, the company secured LTE licences in five circles covering about 29% of theurban population of India. Tikona management believes LTE will help Tikona provideoutdoor ubiquitous coverage for mobile internet devices to complement its existing indoorhigh capacity high speed WiFi offerings for Home & SMB and expand its reach further nowto target mobile broadband subs (small-screen).Following are challenges for Tikona; Their WiFi based access network has many challenges in keeping good network quality and greater indoor penetration due to inherent lack of Wi-Fi technology in dealing with a) Large interference issues due to deployment in free band b) Limited allowed radiated power to penetrate deep inside buildings c) Maintaining QoS d) Operational challenges. Tikona subscriber base is not growing aggressively ( less than 200,000 subscribers ) to maintain health cash flow and attract new funding Lack of project funding support from equipment suppliers to build large TD-LTE network as the operators credit rating is not encouraging.Future ProspectsLTE Advanced is the upgraded version of LTE. It can deliver speeds upto 1 Gbps, that is, 10times more than LTE. On 9th October, 2012, the first LTE-A network in the world wascommercially launched by a Russian network operator, Yota. It can be expected that withinthe 6-8 years, LTE-A will be launched in India. LTE-A boasts the capability to even wipe outtechnologies like FTTH/FTTP and DSL.TD-LTE and India | 11 12. ConclusionIndia is a fast-growing economy. The per capita income is increasing and so is the GDP.More and more people are being exposed to new opportunities. 3G is indeed in a very earlystage but it is growing quite fast in India. Bharti Airtel is providing a plethora of 4G serviceson the new 4G phone that it has launched recently in Kolkata. Reliance Infotel will launchultra-low cost 4G tablets and phones once it kickstarts it LTE services in India. Today, thenumber of 4G subscribers is very few compared to 4Gs predecessors but it is expected togrow even faster than 3G and even 2G in the coming years.References www.gsacom.com www.itu.int www.trai.gov.in www.ndtv.com www.timesofindia.com www.telecomtalk.info www.wikipedia.org www.3gpp.orgTDLTE and India | 12