Japan accepts cellcos' LTE plans, unleashing potential $11bn of spending
Published: 12 June, 2009
Japan has made a major step towards LTE, with the Communications Ministry approving the business plans submitted by the four mobile operators and set to open up new spectrum by year end. These will involve investment in networks totalling one trillion yen over five years (over $11bn).
The largest cellco, NTT DoCoMo, has repeatedly said it plans to roll out LTE at an early stage, and at one time was even considering some deployments by the end of 2009, possibly using pre-standard equipment derived from its long-running 'Super3G' R&D project. However, it now seems that the company will start work in mid-2010, which makes it likely that it will go with fully standard equipment, rather than repeating its 3G experience, when it adopted its own version of W-CDMA, called FOMA. Such a move will enable DoCoMo to tap into the global LTE ecosystem as that develops, rather than being over-dependent on its Japanese suppliers, as it is in 3G. The market leader recently gave its strongest indication yet that it would come out of its wireless bunker and take advantage of global standards when it formed an alliance with Telefonica for joint handset purchasing and other activities.
But of course, nothing is ever completely standard in Japan and the spectrum that will, initially at least, be opened up for LTE will be different to the bands to be used by most other early adopters. While 2.5GHz-2.6GHz and 700MHz are the main focuses of attention in the US and Europe, the Japanese carriers will get 1.5GHz (DoCoMo and Softbank Mobile), 1.5GHz and 800MHz (KDDI), and 1.8GHz (eMobile).
As the disruptive new entrant, eMobile looks set to move almost as quickly as DoCoMo, though it will also put some HSPA into its new spectrum. As it relies primarily on a data model and on devices, such as netbooks, that have been less heavily adopted in Japan than Europe, it is in a position to move towards LTE without having to worry too much, for now at least, about voice or handset formats. The plan it has submitted indicates a start date of September 2010, and it plans to spend $644m in total.
DoCoMo has not gained the 20MHz of spectrum that it wanted - and that many operators believe is essential, as a minimum, to support the heavy duty new web services that LTE promises. Instead it has 15MHz in 1.5GHz, while the other three get 10MHz each in this band. Some of DoCoMo's allocation will not be freed up by current occupiers until 2014, notably in Tokyo and Osaka. Despite these restrictions, it plans to spend about $3.43bn on its network, going live in July 2010 and with commercial services by the end of that year.
Softbank does not start until the first half of 2011, with a budget of $2.07bn, while KDDI will move last, beginning operations in November 2011 and commercial services up to a year later. However, once it gets moving, the CDMA provider will spend and expand aggressively, with a budget of $5.15bn set aside. This will enable KDDI to weight most of its investment towards a period when, it hopes, the economic climate will have improved and demand for LTE services will be proven - and in the meantime, it can attract early adopters of mobile broadband with the WiMAX services offered by its UQ Communications joint venture, which has a national 2.5GHz licenses and no direct competitors.
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