4G LTE networks could be limited by a lack of spectrum, according to analyst Paul Budde.
Optus completed its acquisition of the Vividwireless Group from Seven Group Holdings today in a $230 million agreement which allows Optus to access 98MHz of spectrum in the 2.3GHz band for its LTE-TDD (LTE division duplex) 4G network.
It will also build two major LTE-TDD testing facilities in Sydney to prepare for the rollout of its 4G network in 2013.
However, Budde, communications analyst at BuddeComm, said LTE networks face limitations in Australia due to spectrum capacity. For example, the more people who use the network, particularly for video-based communication, the more strain will be placed on the networks.
Strain on mobile networks will be helped by the release of spectrum when analog television broadcasts are switched off at the end of 2014, with the auction for spectrum, the Digital Dividend, to occur in April next year, when it will be determined who will receive the 700MHs and 2.5GHz spectrum in Australia.
“Then more spectrum will become available, and that is desperately needed for those 4G networks. As a matter of fact, we already know that the spectrum that becomes available in the net auction is not sufficient … beyond 2015 and we have no idea at this point in time where we’re going to get the spectrum from,” Budde said.
He predicts congestion problems will then arise due to telcos sharing the spectrum.
“What you then see is that because there is limited capacity, there is simply not enough spectrum. Then in order to manage the network the mobile operators will in one way or another limit the amount of activity on the network,” he said.
“One of the ways you can do that is with pricing … [Therefore] it will always be more costly to use a large amount of capacity over a mobile network than it is over a fixed network.”
Optus already has access to up to 98MHz of spectrum in the 2.3GHz band in some areas, claiming it will have the highest capacity 4G network in Australia and offer speeds of 25-87Mbps for users.
However, Budde said those speeds can’t be guaranteed because of the limitations of a shared spectrum and the speeds Optus are quoting have been achieved in a laboratory environment.
“In the real world, we all know … that sometimes even calls are dropping out. We all know if you’re in certain places it becomes tedious to download something from the internet on your mobile phone or your tablet,” he said.
“It’s theoretical, that speed, because it … depends not on the laboratory situation, [which] nobody finds themselves in. In the real world, if you’re in the middle of Sydney, then you will have a problem.”
How long it will take other telcos to get on board will depend on investment and infrastructure, according to Budde. For example, mobile towers need to be updated and equipment also upgraded. However, he believes in the next two years more telcos will increase their LTE coverage.
Optus plans to expand its 4G network to Sydney, Melbourne and Perth by the middle of this year. This rollout will be accelerated by Optus utilising shared mobile sites with Vodafone.
Follow Stephanie McDonald on Twitter: @stephmcdonald0
Follow Computerworld Australia on Twitter: @ComputerworldAU