Ericsson and Huawei bicker over Nordic region’s LTE headstart

Late last year, TeliaSonera won the laurels that most thought would go to Verizon or DoCoMo, of the first live LTE network, admittedly a small one, covering the downtown area of Swedish capital Stockholm. Although Telia is working with both Ericsson and Huawei on its trials, this system runs on the local vendor’s kit, but shortly afterwards a row broke out between the suppliers over their various Scandinavian networks.

TeliaSonera customers are being issued with Samsung LTE dongles to test the network. Kenneth Karlberg, president and head of mobility services at Telia, said: “Thanks to the successful cooperation with Ericsson we can offer 4G to our customers in Stockholm earlier than originally planned.” A commercial launch of the trial network in Oslo, Norway, supplied by Huawei, will follow soon.

The carrier plans to expand its LTE reach to Sweden’s 25 largest cities and vacation areas, and Norway’s four largest cities, in 2010. The capital expenditure for this will amount to SEK500m ($70m). It will also kick off a pilot LTE network in Finland in the first quarter, in its 2.6 GHz spectrum acquired in the recent auction. All three of these  Baltic countries have been ahead of the curve in selling 2.6 GHz licenses, enabling the early shift to commercial 4G services, in contrast to the hesitant process towards opening up new frequencies in the major western European economies.

In parallel with the LTE roll-out, TeliaSonera also promises “extensive expansion of our Turbo 3G [HSPA] networks to increase coverage and capacity”. Like most 3G carriers looking to introduce LTE to their networks at an early stage, Telia will go for an overlay approach, with a common IP core integrating 2G, 3G and 4G systems.

It stressed that it has not confirmed which suppliers will provide the networks for the national roll-outs. “Evaluation of suppliers for TeliaSonera’s common 4G core network and radio networks in the Nordic and Baltic countries is in progress and vendors will be selected in the beginning of 2010,” said TeliaSonera’s head of mobility services, Kenneth Karlberg. “Choosing Ericsson and Huawei was a result of what vendors were available at the time for these two cities. The next deal is for a bigger roll-out… and now there are more vendors that can provide LTE equipment - the evaluation should be completed in January.”

To attract users to the Oslo and Stockholm networks, Telia is offering ultralow introductory pricing. In Stockholm, consumers signing up for a 12-month contract pay just SEK4 ($0.56) a month until July 1 2010. They receive the Samsung dongle free, with a free upgrade to Samsung’s multimode 3G/LTE dongle when it is available in the second quarter next year. From July, customers will pay SEK599 ($83) per month for 30 Gb of data, and the modem will be charged as an extra, as yet unspecified, fee. In Oslo, the same procedure applies, except the initial monthly cost until April 1 2010 is NOK1 ($0.17), after which time the monthly tariff is increased to NOK699 ($120).

Mikael Bäckström, Ericsson’s president for the Nordic and Baltic regions, told Total Telecom : “In the Nordic market in general there is a big uptick in users and revenues when it comes to mobile broadband. It is a competitive market also, so being able to offer more bandwidth, more capacity and higher speeds than your competitors is important.” He claims customers will experience speeds of 20 Mbps to 80 Mbps and this will increase as the network is optimized, adding that LTE will enable new revenue streams from enterprise services, and will “enable governments to take services that were only accessible using the fixed line internet, and make them available on the mobile, and offer a more advanced service.”

Huawei may not have grabbed the kudos of providing the first live LTE system, but it quickly claimed that its Oslo trial network had reached peak download speeds of 96 Mbps, compared to 44 Mbps on the Ericsson system in Stockholm. This bit of one-upmanship becomes rather less interesting when you realize that the Oslo network uses 20 MHz of spectrum - the channel size usually assumed when LTE performance statistics are quoted, but in reality rarely available to cellcos. By contrast, the Stockholm build-out has only the more common 10 MHz. The Oslo network goes live this month.

Huawei has also won another LTE deal right in Ericsson’s home country, with Sweden’s Net4Mobility, a joint venture between Nordic carriers Tele2 and Telenor. It aims to start rolling out LTE in 2010 and cover 99% of the Swedish population before the end of 2013, starting with densely populated areas. The deployment also includes a provision to increase the number of 2G base stations for voice traffic by 30% to 50%, to improve coverage indoors and in rural areas (and allow the operator to put off the voice-over-LTE decision for a while).

Unusually, Ericsson issued a statement about its failure to get the contract in its homeland, and was keen to suggest that Huawei had won on price rather than superior performance. “We are of course disappointed that we did not manage to reach an agreement with Net4Mobility … We would very much liked to have delivered this LTE network in our home market. In the negotiation process we went as low as we could in terms of price but it was not enough,” said the firm.