Author Topic: What is the Cost to Upgrade to 4G LTE Network ?  (Read 277 times)


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What is the Cost to Upgrade to 4G LTE Network ?
« on: August 07, 2016, 02:15:27 AM »
The impact of the 4G rollout on capex has been relatively muted in most markets, given the use of 1800MHz spectrum. The density of the network, and therefore the number of BTS, has been or will be less than that required for 3G (with the notable exceptions of China Mobile's 4G network at 2600MHz and RJio's 2300MHz network). Indeed, as mentioned, in some cases, the 3G-to-4G upgrade can be a software only upgrade requiring additional software cards in existing 1800MHz BTS. This helps limit the pull-through of operating costs.

Furthermore, when we consider network costs per MB, the vastly improved throughput of 4G equipment compared with 3G equipment results in dramatically lower 'variable' costs. In simple terms, when we compare the cost per MB of a 2100MHz 3G HSPA network
(sometimes referred to as '3.5G') with that of an 1800MHz 4G network, the cost of production of 1MB of capacity in a fully loaded 1800MHz 4G network could be calculated as 20.0% of that under the 3G HSPA network.

With the use of 1800MHz spectrum in most markets in Asia, geographical coverage is wider, given superior radio propagation. Considering only 25% 'software only' upgrades, saving the construction of additional BTS and tower rentals. Together with faster throughput and wider geographical coverage, our calculation suggests that the cost of generating 1Mbps of capacity using 4G LTE is only 20% of the cost of capacity generation under HSPA 3G.