Vodafone in talks on LTE network

Carriers discuss possible 4G network

Vodafone has held initial talks with another carrier — either Telecom or 2degrees — that could lead to them building a shared 4G network based on LTE technology. Vodafone networks head Tony Baird says it will be ready to launch a 4G network based on Long Term Evolution (LTE) technology by early 2014, following what he describes as a "really pleasing" decision by the Government to switch off analogue television transmissions by November 2013 and free up the required radio spectrum. "As soon as the spectrum becomes available, I will have kit in the country and I have put it into our budgets." The greater capacity of LTE would let mobile carriers offer faster, cheaper mobile broadband plans with more generous data caps and lower latency. However, Telecommunications Industry Group chief executive Rob Spray has speculated that without spectrum-sharing, the move to 4G could result in the proliferation of another 2500 cellphone towers. Vodafone, Telecom and 2degrees have taken some steps to share cellphone towers, but unless they also share radio spectrum, separate antennas need to be installed two vertical metres apart on towers to avoid interference. This can result in taller towers, and 2degrees has said tower-sharing has been stymied by the fact that telcos with antenna installed lower down on towers provide a smaller coverage area. Vodafone and 2degrees say they will continue to support 2G and 3G connections when they move to LTE, meaning that without spectrum-sharing, shared towers might need to support up to eight separate sets of antennas. Mr Baird says Vodafone is open to sharing spectrum. The discussions that have taken place concern the definitions of what might be shared, from buildings and power "right through to do we share the physical radio infrastructure and the spectrum". "There are stages and I think we all need to have the same definitions of what those stages are. Once we have plans that stack up for both, or multiple parties, going to see the Economic Development Ministry makes a lot of sense." He would not confirm assumptions the talks were with Telecom. Telecom spokeswoman Emma-Kate Greer says there are "several ongoing conversations being led at an industry level that Telecom is involved in". Although all three mobile carriers are converging on LTE using spectrum that will be released by the closure of analogue television, some officials are understood to harbour reservations about what spectrum-sharing could mean for competition. Mr Baird says Vodafone is likely to start rolling out LTE first in rural areas and the central business districts of the main centres. He is due to visit a Vodafone LTE pilot in Germany this year and the company is teeing up a technology demonstration in Wellington with Nokia Siemens. 2degrees chief operating officer Bill McCabe says it is also open to a shared network. One option was a "single tower, a single set of antenna, a single cabinet and single lot of backhaul to the core network and then at that point is where the competition really starts". Mr McCabe says the model "makes sufficient sense for all the British operators to want to do it". "The fewer towers there are, the better from a consumer perspective, but what does it do to competition? That is the big question. Consumers who want to enjoy the services that LTE will be able to provide will want to enjoy them at acceptable prices and they will want choice." Mr McCabe would not say how far advanced 2degrees' plans for LTE are, but says the decision to clear the way for the launch of 4G services after November 2013 is "fantastic". The Government announced in December that it would release 112MHz of radio spectrum freed up by the closure of analogue television for "new cellular technologies". Communications Minister Steven Joyce said this month that he expected the spectrum to sell for $100 million to $120m. Economic Development Ministry radio spectrum manager Brian Miller says it is likely to be late next year before it reports back to Cabinet on how to dispose of the spectrum, and the sale itself will likely be in 2012. "We can't commit to dates, but we will firm up on the timeline next year as well." The delay is because of uncertainty about how large economies in the Asia Pacific region, such as India and Australia, will carve up their digital dividend. "There is no point in New Zealand racing off and doing something on its own if you can't buy handsets and the kit for it. To some extent, our timeline has to be aligned". Mr Miller says that at this stage it is most likely the spectrum will be sold by auction, with the number and size of blocks yet to be determined. "But we will obviously consider the options with industry as part of that process." If the carriers were to advance the idea of spectrum-sharing, that would need to be factored into the options for allocating the spectrum, he says. Ms Greer says Telecom is looking at LTE "in the context of a market that is rapidly evolving and an industry that within a few years may be unrecognisable".

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