Network launch skips 3G to make Poland fourth global LTE market; competition already looming

Details: James Barton; Category: Wireless Networks; 16 September 2010; 9716 views

Central Europe has witnessed its first LTE network launch – and it has skipped 3G entirely. Two Polish mobile network operators, Mobyland and Centernet, have formed a partnership that has launched a commercial LTE network on the 1800MHz band...

The new network, which has been provided by Huawei, is claimed to be the world’s first commercial LTE network deployed in the 1800MHz spectrum – until now, the 800MHz and 2.6GHz bands have typically been more favoured. Both operators previously offered only 2G services, and so have skipped a network technology generation.

Having acquired 1800MHz spectrum in 2007, both operators began developing their networks using refarmed 2G spectrum, eliminating the expense of bidding for new frequencies. With both operators targeting under-penetrated niches in the market, the reuse of existing spectrum has given them an advantage against the most established operators - PTK Centertel (Orange), Polkomtel (Plus), PTC (Era) and P4 (Play).

The operators are hoping to extend the coverage of the network by deploying 700 base stations by the end of 2010 – which, once in operation, will cover over 7 million people, or 20% of the population. Currently, the network covers several major cities, including Warsaw, Katowice and Lodz.

The operators are able to achieve such a swift rollout due to their infrastructure, which allows for network upgrades via software, rather than hardware updates, which allows for low costs and fast deployment.

In addition, the frequency band used by the network extends the reach of the coverage received by a single base station. As demand for high speed broadband is highest in more remote, rural areas in Poland, this extended coverage will allow LTE to compete with fixed-line broadband, as well as mobile.

Only three other countries have so far witnessed the launch of a commercial LTE network; Norway, Sweden and Uzbekistan. Both Scandinavian networks are operated by TeliaSonera, while in the Central Asia country two networks are operated – one by MTS, and one by Ucell, a subsidiary of TeliaSonera.

Mobyland was recently acquired by Aero2, a Polish operator which has been developing an HSPA+ network and also owns LTE frequencies – theoretically allowing the two firms to offer a full portfolio of network options between them.

Various reports place the 2G-only CenterNet as another Aero2 property, although it has stated that it is a subsidiary of NFI Midas – an investment fund in which Aero2 apparently has a minority stake.

CenterNet President Adam Kurianski represents a link between the management of the two companies, as he is also a serving board member of Mobyland. Both operators are planning on conducting themselves as wholesale operators.

While the two operators have become the first to offer LTE in Poland, they will face competition shortly, as Poland’s telecoms regulator, the Office of Electronic Communications (known by its Polish acronym of UKE), has granted two other operators permission to build a wholesale LTE network through a new joint-venture company.

PTK CenterTel and P4 will now be able to bid jointly in the impending 2.6GHz spectrum auctions. The UKE plans to sell only two blocks of spectrum as a means of encouraging network sharing – the blocks are too large for a single operator to use effectively.

It is likely that this is the reason behind the new joint-venture, which the two operators plan to launch as a new brand, rather than under the aegis of their current operations. First proposed in June this year, P4 has stated that it expects the joint-venture to “reduce…costs and risks through economies of scale”.

PTK CenterTel is a subsidiary of Orange, and is Poland’s largest mobile operator with 14 million subscribers at the end of Q2 2010. P4 meanwhile lags in fourth place, but is one of the largest specialist 3G operators in Eastern Europe, with 3.1 million connections at the end of the same period.