Huawei beats Ericsson in Sweden, but LTE won't save the industry

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Huawei beats Ericsson in Sweden, but LTE won't save the industry

By CAROLINE GABRIEL

Published: 21 December, 2009

Huawei continues to snap up LTE trials and early commercial awards, right in the European heartland of market leader Ericsson. Just as the Swedish giant was boasting that it was powering the world's first live LTE network, TeliaSonera's in downtown Stockholm, Huawei claimed its own TeliaSonera system, just about to go live in Norwegian capital Oslo, was faster. And then it followed up with a win at Net4Mobility, in Ericsson's own country.

Net4Mobility is a joint venture between Nordic carriers Tele2 and Telenor, which aim to start rolling out LTE in 2010 and cover 99% of the Swedish population before the end of 2013, starting with densely populated areas. The deployment also includes a provision to increase the number of 2G base stations for voice traffic by 30% to 50%, to improve coverage indoors and in rural areas (and allow the operator to put off the voice-over-LTE decision for a while).

Unusually, Ericsson issued a statement about its failure to get the contract in its homeland, and was keen to suggest that Huawei had won on price rather than superior performance. "We are of course disappointed that we did not manage to reach an agreement with Net4Mobility ... We would very much liked to have delivered this LTE network in our home market. In the negotiation process we went as low as we could in terms of price but it was not enough," said the firm.

Meanwhile, Huawei said its Oslo trial network has reached peak download speeds of 96Mbps, compard to 44Mbps on the Ericsson system in Stockholm. This bit of one-upmanship becomes rather less interesting when you realize that the Oslo network uses 20MHz of spectrum - the channel size usually assumed when LTE performance statistics are quoted, but in reality rarely available to cellcos. By contrast, the Stockholm build-out has only the more common 10MHz.

Not all the vendors are being so bullish about LTE, pointing out that major revenues will not be forthcoming for the first few years - the focus will be on small roll-outs in major cities, and many cellcos will not start any commercial LTE projects until at least 2012. And as LTE does kick in, spending will often be at the expense of investment in 3G - unlike WiMAX, which is more commonly a greenfield technology generating brand new revenues.

Bruce Brda, head of Motorola's wireless networks business, told news agency Reuters that LTE will not be the boost that the struggling telecoms equipment business needs, at least in the short term. "Total dollars being spent ... I don't believe they will increase," he said in the interview. "The increase in demand for mobile broadband is skyrocketing and the ARPU increase is almost insignificant. The economics just do not work. The only way to afford 4G investment is to cut back on 3G."