TeliaSonera reaches 100,000 LTE users; prepares for upsurge this year

9 Mar 2012

Swedish group TeliaSonera has reached over 100,000 users of its 4G Long Term Evolution (LTE) mobile broadband networks across seven countries in the Scandinavian and Baltic regions and expects a significant explosion in the rate of subscriber take-up this year, according to its head of mobility services, Haakan Dahlstroem, who was quoted by Bloomberg. The TeliaSonera group launched the world’s first commercial LTE networks for wireless modem users simultaneously in Swedish capital Stockholm and Oslo, Norway, in December 2009, but Dahlstroem candidly admitted in an interview that the intention was to gain prestige rather than sign up large quantities of 4G data users initially. Indeed, TeleGeography’s GlobalComms Database notes that factors including an initial lack of popular 4G devices, relatively expensive pricing and limited coverage in the early phases meant that there were no more than 10,000 LTE subscribers shared between three operators in Sweden by June 2011 – 18 months after TeliaSonera’s 4G switch-on and following rival LTE launches by Tele2 and Telenor Sweden over a shared 4G network in November 2010. The rate of LTE take-up in Sweden is now accelerating, however, since the launch of LTE-enabled tablet computers in the run-up to Christmas 2011 and the arrival of LTE smartphones on the networks of Tele2 (February 2012) and TeliaSonera (earlier this month), coupled with ramped-up coverage expansion by these two operators alongside Telenor and a fourth player, Hi3G Access Sweden (3), which launched commercial LTE in December 2011 and announced an expansion project at the beginning of this month.

In the interview, Dahlstroem explained the motivation behind TeliaSonera’s early ‘bragging rights’ launch of LTE, as he says the operator was determined to be a 4G market leader after previously being a late entrant in the Swedish 3G segment. GlobalComms notes that TeliaSonera failed to win any 3G frequencies in a contest in 2000, judged according to criteria including network coverage plans and speed of rollout, gaining the dubious distinction of being the first national incumbent telecoms operator to be unsuccessful in a domestic market tender of this type. TeliaSonera was forced to form a 3G network sharing agreement with Tele2, and eventually launched W-CDMA services in March 2004, having been beaten to the punch by Hi3G Access Sweden’s May 2003 launch. Dahlstroem reveals that the LTE launch strategy was not based on immediate financial returns but asserts that the decision was good for network development in the longer term: ‘When we took the decision to be early with 4G it was based more on image than on network offload. We said we will never be late again and that gives the situation that we have a larger network than if you let the chief financial officer run it.’ He added that its intention in the early stages was to sign up mainly business users on laptops initially, and signal to these high-value corporate customers that TeliaSonera was investing to ensure its services were supported by the most advanced network possible, going forward. He noted that the advent of 4G smartphones would herald accelerated consumer take-up, but would not be drawn on specific figures.

TeliaSonera operates commercial LTE networks in Sweden, Denmark, Norway, Finland, Lithuania, Latvia and Estonia. The ‘majority’ of its 4G customers are in Sweden, Dahlstroem said, with a ‘growing’, but unspecified, amount in Finland, Norway and Denmark – helped by recent improvements to its network in Denmark, where problems with low data throughput, dropped calls and poor coverage have been remedied, he stated. The company’s end-of-year 2011 report noted that TeliaSonera Denmark has now launched ‘nationwide’ 4G services. The mobile head added that there were currently ‘very small’ numbers of 4G users in TeliaSonera’s three Baltic markets. Addressing another issue likely to affect consumer take-up, Voice-over-LTE (VoLTE) calls are scheduled for next year, Dahlstroem said, reiterating earlier statements from TeliaSonera spokespeople. TeleGeography’s CommsUpdate reported last month that both Tele2 and TeliaSonera are initially providing voice support for their 4G handset users via Circuit Switched Fallback, whereby the voice calls are handed over to 3G or 2G networks (with an associated delay or interruption in connection). In Sweden, TeliaSonera plans to cover more than 600 towns/cities/municipalities with 4G by the end of 2012, up from 214 locations in February, according to GlobalComms.

Meanwhile, fellow Swedish group Tele2 has not yet expanded its commercial services beyond its domestic borders, although Tele2 Lithuania plans to launch LTE services this year via 2600MHz licence auctions, while the group already has 4G spectrum to launch in other countries including the Netherlands, and Tele2 Russia is currently exploring opportunities to launch LTE in the 1800MHz band. Tele2 Sweden has accumulated ‘about 40,000’ 4G subscribers to date, spokeswoman Pernilla Oldmark said this week. The company’s most popular 4G device thus far is a home modem with Wi-Fi facilities, she added, although this is expected to quickly change following its handset launch.

Tele2’s 4G network sharing partner Telenor Sweden currently has LTE data subscriptions ‘in five figures’, according to a spokesman, Andreas Hamrin, quoted by the Bloomberg report, who added that 4G wireless modems accounted for more than half of its dongles sold during the Christmas season. Like Tele2, Telenor Group is yet to achieve further commercial LTE launches outside Sweden, although there are several launches imminent across its subsidiaries’ markets. The Norwegian-based group is also yet to follow Tele2 and TeliaSonera in launching a 4G handset, while 3 Sweden is thought likely to wait until mid-summer to launch LTE smartphones, as indicated by a spokesperson for the Hong Kong-backed company, Erik Hornfeldt.