O2 Kicks Off London LTE Trial

The UK has been sliding further behind its European neighbors in plans for LTE networks, and the delays to its spectrum auctions, as well as holes in its 3G coverage, are attracting rising criticism from companies and politicians. The latest is eBay, which warned on Friday that erratic 3G speeds and coverage are costing the UK economy as much as £1.29bn a year in lost sales, because of the poor experience for mobile commerce. As if to reassure such players that the UK will soon start to catch up with 4G frontrunners like Sweden, O2 has announced the country's latest LTE trial, this time in London.

Focal Points:

• According to eBay, such moves are becoming urgent. The ecommerce giant submitted a 'mobile manifesto' to UK regulator Ofcom, in response to a consultation on the planned auctions, saying: "The reliability of mobile broadband currently significantly inhibits m-commerce sales.
• "At eBay in the UK we now see around 10% of sales by value transacted on mobile devices, but we need the right infrastructure in the UK to match this demand," commented an eBay VP, Miriam Lahage, but according to the firm, Ofcom neglected m-commerce issues during its consultation.
• While it singled out other LTE-enabled services for their potential boost to the economy - including video streaming, social networking, gaming, instant messaging and email - it did not mention the impact of 4G on mobile retail growth. "M-commerce sales are already worth some £1.35bn to the UK economy, and are set to grow 14fold over the next 10 years to £19.26bn," estimates eBay (based on calculations by retail analyst firm Verdict Research. "It is therefore essential for Ofcom to seriously consider the interests of m-commerce when considering what regulatory approach to take towards mobile broadband provision." Verdict found that 64% of consumers saw connection speed as a "significant barrier" to m-commerce, while 63% said the same about network reliability, 62% about cost and 52% about coverage.
• Despite all this negativity, Ofcom CEO Ed Richards said last week that its plans to auction 2.6GHz and 800MHz spectrum in the fourth quarter of 2012 remains "on schedule". And O2 has added a London trial to a handful of LTE pilots being run by other cellcos, mainly in rural areas. O2 says it will use the trial in the capital to assess network behavior, consumer response and to shape its plans for commercial rollout. The pilot will take place over 25 cell sites in the 2.6GHz band, within an area of 40 square kilometers, and will last for nine months. It will be an extension of an existing O2 test network around its home base of Slough, west of London. The cellco will provide participants with Samsung B3730 dongles, supporting speeds of up to 100Mbps, as well as 4G personal hotspots and handsets from a number of other vendors. The O2 Arena, the large venue in east London, which the carrier sponsors, will have its own dedicated 4G internal and external sites.
• "Our work in London will give us a better understanding of the capabilities of 4G technology and will allow us to explore the superfast benefits it will bring to people and industry across the UK," said CEO Ronan Dunne in a statement. "The forthcoming spectrum auction is a watershed moment for the UK mobile industry … We are actively engaged in the auction and are supportive of a fair process that meets the government's and Ofcom's planned timeline." One of the reasons for repeated delays to the auction has been the dispute between the cellcos over how valuable sub-1GHz spectrum is to be allocated, given that O2 and Vodafone already have holdings in the 900MHz GSM band, while Everything Everywhere and 3UK have no low frequency licenses as yet.
• An interesting aspect of the O2 trial is the use of point-to-multipoint (PMP) microwave backhaul - an approach, which has been regarded as a niche option for mobile backhaul, but is entering the limelight as cellcos look to build far denser networks. The technology is supplied by Cambridge Broadband Networks (CBNL), the leader in PMP backhaul, and VP of market strategy, Lance Hiley, told Mobile Europe that this would be well suited to a trial which is geared to a dense urban environment. "Here, literally millions of smartphones battle for their fair share of mobile broadband every day. Being the first trial of its kind to take place in the UK, the successes and challenges that O2 encounters and overcomes will provide the foundation of knowledge for the LTE networks of the future," he said.
• An O2 executive said the CBNL VectaStar system would deliver 150Mbps to the cell site and that the cellco wants to assess the PMP option and how well it will support LTE, especially in terms of enabling flexible planning and the ability to handle huge capacity. The operator will also have point-to-point backhaul systems in the trial, reported to be from NEC and Nokia Siemens, and some fiber, and is particularly interested in evaluating how to balance traditional and small cell patterns for its eventual LTE deployment.

Editor’s Note: If you remember that in 2009, there was some doubt that LTE would survive HSPA+ popularity. As a result, a number of well-established telcos (apparently O2 being one of them) decided to play-it-safe and wait to see what high-speed technologies survived development and competition. As demonstrated in the research last week regarding Canadian Wireless Service Provider Comparisons, by waiting well-established telcos enable competition to gain on them as long as the competition is willing to take risks on developing technology.