4G evolution continues to gain traction worldwide, with Japan and Hong Kong emerging as hotbeds of LTE activity in Asia. Japan is expected to play a leading role in global LTE market development due to its evolved device and user market. Japanese mobile operators have among the world’s most pressing needs to expand capacity, matched with a highly sophisticated user market in which to exploit adoption of LTE capabilities to the fullest. 

The four Japanese mobile phone operators (NTT DoCoMo, KDDI, Softbank Mobile and EMOBILE) are expected to collectively spend one trillion yen (US$10 billion) over the next five years on LTE, and they expect a combined 36 million LTE subscriber base by the end of 2015. The most proactive with regard to LTE in Japan is NTT DoCoMo, which expects to have nearly 18 million LTE subscribers by 2014. KDDI on the other hand expects to reach 9.84 million LTE subscribers by 2014. 

NTT DoCoMo plans to launch LTE using 2.1 GHz in, considering use of existing network facilities. The 1.5 GHz band will be used starting in 2012. The WCDMA technology that NTT DoCoMo has been using for its 3G network may not be introduced by other overseas operators, which could also limit its ability to offer international services to its subscriber base. By migrating to LTE NTT DoCoMo will be able to combat this limitation.

Currently 800 MHz is KDDI’s main operating band, but the operator is pressing ahead with expansion of 2 GHz band coverage, and also is increasing the area coverage for the new 800 MHz band in preparation for full conversion by July 2012. In addition to the current 800 MHz band and the 2 GHz band, KDDI has made tri-band (current 800 MHz, 2 GHz and new 800 MHz) compatible handsets available. It will continue working to provide more tri-brand handsets over the next three years, so that by the July 2012 switch to the new band, all “AU” (3G CDMA 1x mobile service) subscribers will be using tri-band handsets.

KDDI has emerged as a threat through its investment in UQ Communications. The increased bandwidth and support of video services made available on UQ’s WiMAX network has spurred NTT DoCoMo and other Japanese 3G operators to move more swiftly towards LTE. At the end of Q3 2010 UQ had 337,100 WiMAX subscribers, and while this hardly impacts DoCoMo’s market share, it has become a factor in the earlier deployment of the NG LTE network. 

In Japan the new licenses (700 and 900 MHz bands) are currently under study. Once the national regulator makes its decision regarding the new licenses, including the allocation mechanism, we might see all operators in Japan changing their policies.

Hong Kong mobile operators are actively evaluating LTE strategies to address growing capacity requirements driven by continuously expanding data traffic on their networks. Hong Kong CSL and SmarTone-Vodafone remain the most proactive operators on the LTE front. Hong Kong operator CSL has completed the construction of its next-generation dual-cell (DC) HSPA+/LTE network and is now waiting for compatible devices. 

Hong Kong CSL has deployed DC-HSPA+ coverage in the 2100 MHz band across the territory, and 2600 MHz LTE in select heavy-traffic districts. It is also deploying equipment to offer LTE using 1800 MHz spectrum. According to the company, the object of deploying both LTE and DC-HSPA+ simultaneously is to offer a fallback option for LTE that does not result in a noticeable drop in connection quality. SmarTone-Vodafone on the other hand will continue upgrading network speeds to 28 Mbps and 42 Mbps in 2010, paving the way for 80 Mbps and even higher with the implementation of LTE. 

Hong Kong is among the world’s most saturated and data intensive markets. This is likely to lead to early adoption of LTE as capacity on 3G networks becomes constrained and the competitive environment moves operators to shift to the more capable and cost effective network. 

In Hong Kong there were no bidders for the 2.3 GHz band (considered as a prime band for mobile WiMAX). This should not come as a surprise considering that there is more than 90% WCDMA/HSPA network coverage in that country. Hong Kong’s high fixed broadband household penetration rate of more than 95%, coupled with the country’s high Wi-Fi connectivity and growing HSPA+ penetration, makes the business case for WiMAX in Hong Kong weak. 

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Author: Basharat Ashai, Market Analyst, APAC & MEA