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 Analysis: Analysis: Spectrum refarming at 1800 MHz key toSpectrum refarming at 1800 MHz key to

LTE device adoptionLTE device adoption

Refarmed spectrum accounting for 40% of global LTE market Refarmed spectrum accounting for 40% of global LTE market 

 A new study by Wireless Intelligence highlights the need for device manufacturers to prioritise the

development of 4G LTE devices compatible with the 1800 MHz spectrum band. Refarmed

spectrum, mainly in the 1800 MHz band, currently accounts for almost 40 percent of the global

LTE market and will continue to do so over the next four years, the study says.

Wireless Intelligence estimates that global LTE connections stand at 39 million as of Q3 2012,

comprising 93 live networks, including both the FDD and TDD variants. By 2016, the global LTE

market is forecast to increase to over 500 million connections via more than 200 networks.

However, LTE adoption is dependent on how much new spectrum mobile operators can acquire in

the digital dividend and IMT-extension bands as well as how much existing 2G/3G spectrum they

can refarm to use for 4G services.

Regulators and governments play a critical role in the adoption of LTE networks as they make

these network capacity solutions available. However, the uncertainty surrounding regulatory

decisions and the complex fragmentation of LTE frequencies at national and regional levels

continue to negatively impact the development of LTE-compatible consumer devices.

The digital dividend band (700-800 MHz) currently accounts for 57 percent of global LTE

connections, mainly due to the aggressive rollouts underway in North America. In contrast, the

IMT-extension band (2500-2600 MHz) only supports 5 percent of global LTE connections with

most deployments in this band located in Western and Northern Europe. Meanwhile, the spectrum

refarming scenario accounts for 38 percent of the current global LTE market, of which over half (53

percent) relates to the 1800 MHz band. This refarming trend is allowing operators to introduce LTE

prior to the allocation of additional spectrum by regulators.

There are 27 live LTE networks worldwide supporting the 1800 MHz band to date. Last month, UK

regulator Ofcom gave permission for the country's market leader Everything Everywhere to deploy

LTE using its existing 1800 MHz band currently used for 2G services. This decision effectively

gives the operator a 12-month head start over its rivals, which will have to wait for fresh 800/2600

MHz auctions later this year. Ofcom said its decision was partly motivated by the availability of

1800 MHz-compatible LTE consumer devices, a band not usually supported in HSPA equipment in

the UK.

Wireless Intelligence expects that the share of global LTE connections using refarmed spectrum

today (38 percent) will remain relatively stable over the next four years - despite regulatory moves

to enable more operator LTE deployments in the IMT-extension and digital dividend bands. By

2016, Wireless Intelligence forecasts that all three spectrum scenarios will account for roughly

similar shares of the global LTE market (one third each - see graph).

Joss Gillet, Senior Analyst, Wireless Intelligence:

LTE spectrum fragmentation is a major hurdle for hardware vendors that are eager to rationalise

frequency capabilities to take advantage of economies of scale. The availability of handsets hasbeen limited so far by the lack of spectrum harmonisation which makes it difficult for handset

and chipset manufacturers to deliver LTE-capable devices at a mass market price point. A 

typical example concerns Apple’s latest iPad, which only supports LTE connectivity in the

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700/2100 MHz bands therefore mainly addressing demand in North America and ignoring

frequency requirements in other regions. However, considering the long-term prevalence of the

1800 MHz band in global LTE deployments and its combination with deployments in the digital

dividend and IMT-extension bands, device vendors such as Apple have an interest in covering

all three bands in upcoming LTE device launches – in Apple's case via the ‘iPhone 5’ due to

launch next week. Huawei has already unveiled LTE smartphones capable of covering the

800/1800/2300/2600 MHz frequency combination, supporting 60 percent of the forecast global

LTE market in 2016.

 4G LTE spectrum solutions as a % of global LTE connections

Source: Wireless Intelligence

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