Abstract
The fourth generation (4G) mobile cellular networks are being deployed rapidly across both the developed and the developing world. The choice of Long-Term Evolution (LTE) for 4G deployment is driven primarily by its technical superiority in catering to the rising consumer demand for high-speed mobile broadband services. The total cost of ownership (TCO) for deploying 4G LTE services, however, involve massive investments in spectrum acquisition and radio network infrastructure provisioning. Since spectrum bands in different frequencies have different wave propagation characteristics, their individual valuations also differ, leading to varying implications on an operator’s TCO and profitability. To clearly establish these financial and technical implications, this paper performs a comparative evaluation of 4G LTE deployment over sub 1 GHz, 1–2 GHz, and 2–3 GHz cohorts of frequency bands. With the help of a suitable techno-economic model, we forecast the number of 4G LTE subscribers, determine the achievable coverage and capacity, and analyze their comparative profitability through a discounted cash flow approach over a 20-year horizon across 22 telecom circles in India. Our results indicate that sub 1 GHz bands result in lower TCO and higher profitability for operators across all the 22 telecom circles when compared to other two cohorts. Interestingly, we also note that, among the four types of telecom circles, Category C circles, which are crucial to ensure the mandated last-mile coverage for rural Indian villages, come next to only Metro circles in terms of profitability, thereby increasing their attractiveness further in future spectrum auctions in India.
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- 1.
Recommendation I.113 of the ITU Standardization Sector defines broadband as a “transmission capacity that is faster than primary rate Integrated Services Digital Network (ISDN) at 1.5 or 2.0 Megabits per second (Mbits)”.
- 2.
This paper is an extension of work originally reported in Proceedings of the 9 th International Conference on Communication Systems and Networks (COMSNETS).
- 3.
The 700 MHz band was introduced for bidding for the first time, in the 2016 spectrum auctions in India. The 800 MHz band has been auctioned twice in the spectrum auctions of 2013 and 2015.
- 4.
According to the mandates of the last spectrum auction in India, 10% of the total license charges had to be paid upfront at the time of acquiring the spectrum, while the rest were supposed to be paid in 18 equal annual installments in future.
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Acknowledgments
This paper is an extended version of our earlier work presented in the 9th International Conference on Communication Systems and Networks (COMSNETS), Bangalore, India, held during January 4–8, 2017. We sincerely thank the reviewers and the participants of COMSNETS 2017 for their insightful comments and suggestions toward improving the paper.
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Jha, A., Saha, D. (2017). Techno-Economics Behind Provisioning 4G LTE Mobile Services over Sub 1 GHz Frequency Bands. In: Sastry, N., Chakraborty, S. (eds) Communication Systems and Networks. COMSNETS 2017. Lecture Notes in Computer Science(), vol 10340. Springer, Cham. https://doi.org/10.1007/978-3-319-67235-9_17
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DOI: https://doi.org/10.1007/978-3-319-67235-9_17
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