SWOT Analysis of Vodafone – World’s second largest mobile network operator

Britain-based Vodafone is the second largest mobile service provider on the planet after China Mobile. The company has about 435 million subscribers in 26 countries around the world. Recently, Vodafone reported group revenue of £10.2 billion ($17.3 billion) after the quarter that ended in June 2014. While this was up 6.2% on an absolute basis year-on-year given the strong pound currency, it was down 4.4% on organic basis. Organic revenue measures comparable performance, therefore excludes any M&A activity and fluctuation in foreign exchange rates. The company did not disclose profit figures in its most recent financial report but it had a net profit of £4.6 billion ($7.8 billion) at the end of financial year 2013-14. This excluded the money it made from selling the Verizon Wireless stake in US. Vodafone provides cellular network voice and data services in the following countries – Germany, Italy, United Kingdom, Spain, Netherlands, Ireland, Portugal, Romania, Greece, Czech Republic, Hungary, Albania, Malta, India, Turkey, Australia, Egypt, New Zealand, Qatar, Ghana, South Africa, Tanzania, Congo, Mozambique, Lesotho and Kenya. Some of their operations in these countries are through joint ventures. Vodafone also runs fixed home, enterprise and cable networks in a few regions and these operations form about 15% of the group’s revenue. Despite having big presence across various regions, Vodafone has faced multiple challenges in the past few years. Let us do a brief Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis for this telecom giant –

Strengths –

• World’s second largest mobile service provider by subscribers – Vodafone’s customer base of 435 million in various parts of world is its biggest asset. It is either the market leader or is among the top 3 service providers in every country. Such strong position often implies financial leverage, larger capacity to absorb risks and greater capability to steer the market direction.
• Geographically diversified business – Looking closely at the countries listed above, it is easy to conclude that Vodafone has a presence in all kinds of mobile markets. Developed markets like Germany and UK bring bulk of revenue. Then there are markets like India that have immense growth potential both in voice and data. So declining business in one region can be compensated by growth in another.
• Developed and advanced network – While not necessarily the trailblazer of LTE network launch in its areas of operation, Vodafone deployed LTE and high-speed wireless networks in most of its markets within a few years of spectrum allocation or ecosystem stabilization. In 2010, Vodafone had LTE running in Germany for the first time. Within the next 2 years, they followed it up by launching LTE in Portugal, Romania, Spain, UK, Australia, South Africa and many other nations. Networks in India, Egypt and Turkey are also in the process of upgradation. Similarly, in the first half of the last decade, the operator was aggressive in providing 3G services. The overall perception of Vodafone’s wireless network is positive in most countries.
• Strong brand recognition – Aggressive strategy, creative advertising, decent customer service and employee-friendly policies have helped Vodafone in cementing its place among the better brands of the world. This makes it easy for them to win new customers and retain the existing base.

Weaknesses –

• Sluggish economic conditions in Europe – The continent brings in about two-thirds of the revenue for Vodafone. Consequently, the operator suffered when the European economy was weak over the past few years. Some of the worst hit nations were Greece, Spain, Portugal, Ireland and Italy. Incidentally, Vodafone has huge presence in all these countries. Lower disposable income and high unemployment prompted customers to cut down on their mobile phone bills. The region is now showing signs of revival but the road to recovery is long.
• Cut throat competition everywhere – In its homeland, Vodafone is pitched against EE (Orange and Deutsche Telekom), Telefonica’s O2 and Hutchison’s 3 (Three) network. In Spain, it is up against Telefonica owned Movistar and Orange. Telecom New Zealand and 2degrees are rivals in New Zealand. Apart from Vodacom, South Africa also has MTN, Cell C and Telkom. The scenario for Vodafone is similar in other developed and emerging markets. High competition has hit the bottom line/ARPU and on this end, no respite is expected in the short term.
• Absence from the profitable US market – Vodafone does not provide wireless telecom services in the United States although it does have a small enterprise business in the country. It sold the 45% stake in Verizon for $130 billion last year. Despite the argument that Sprint and T-Mobile are weaker, higher tariffs have made sure that all major telcos in America are overall strong financially. Unfortunately, lack of presence in USA is a drawback about which Vodafone cannot do much.

Opportunities –

• Project Spring – After returning money to shareholders and paying taxes, Vodafone still made a net profit of about $40 billion from selling its Verizon share. The telco plans to spend the bulk of that windfall or about £19 billion ($32.3 billion) on upgrading its European networks to 4G and LTE and enhance its networks in developing markets to 3G or faster speeds. The LTE coverage has been achieved in more than half of Europe. This investment is a tremendous long term opportunity for Vodafone to position itself as the leader of high speed and reliable wireless services.
• Emerging markets like India – Regions where people still either don’t have mobile phones or use 2G feature phones offer a lot of potential for business development. Vodafone has about 170 million voice subscribers in India and less than 10% of those use 3G data. The company’s India service revenue grew 10% in the latest quarter. Turkey still hasn’t reached 100% mobile phone penetration and more than one-third of its population has not used 3G. Likewise, Africa has a lot of untapped market.
• Fixed telecom and cable services – Vodafone has been aggressively looking to expand towards non-mobile services in order to diversify its portfolio and generate new sources of income. It acquired Cable & Wireless in 2012 and thus became unified enterprise communications provider in UK. Last year, it bought Germany’s largest cable operator, Kabel Deutschland for $10.4 billion and followed that up with a takeover of the Spanish cable provider Ono for about the same price. Vodafone already provides fixed phone services in a few regions. Clearly, it intends to evolve into a fully integrated telecom service provider in the long term.

Threats –

• Market saturation in Europe – Europe’s share of subscribers is 30%, but it brings in more than two-thirds of the revenue for Vodafone. This demonstrates the extent of its dependence on the continent. Since the mobile phone penetration in most of its European markets is about 100%, the scope of growth, apart from services like LTE, is limited. Not surprisingly, its service revenue from the region declined by 7.9% in the recent quarter. The trend has been downwards for a few years now. If a company’s profits are decreasing in its most important region, it is a big threat.
• Uncertain regulatory climate – Telecom policy and regulation has been a challenge for the industry in many parts of the world. In Europe, the big issues are falling mobile termination rates and reduced roaming charges. Remember, what is good for the customer is not necessarily great for the service provider. A friendly M&A policy would be a big boost for established players like Vodafone. EU has been looking at consolidation norms and may allow 3 operators in its member countries. Regulatory framework looks better in India too, but is still far from being industry-friendly.
• Over-the-top (OTT) services – An increasing menace for the wireless telecom service providers has been the rise and rise of OTT. Its simple, if I can talk and see my family halfway across the world by using WiFi, then why would I use my phone minutes? Skype, WhatsApp, iMessage and many similar mobile applications have reduced the need to be dependent on the cellular network. Going forward, this scenario is only going to get worse. Vodafone has introduced bundled plans and partnered with OTT services to do some damage control.
• India tax case – Litigation is common in telecom industry, but the notorious Vodafone tax case has kept the operator worried. The dispute arose from Vodafone’s buyout of Hutchison’s India operations in 2007, a transaction not subject to tax in India. But the nation’s government thinks otherwise. Despite India’s top court ruling in Vodafone’s favor, the government changed the laws and the matter is still out for international arbitration. Vodafone’s liability could be as much as $3.3 billion if it loses.

Irrespective of weaknesses and threats, Vodafone’s business is in no imminent danger. It is a well-managed company that will survive the headwinds. The Verizon stake sale has immensely helped in strengthening the operator’s finances and that money is being invested efficiently in other ventures. There have been rumors of AT&T’s potential interest in Vodafone. Unless such an unlikely deal happens, the Vodafone brand is here to stay and it will remain one of the superior telecommunication companies of the world.

Why USA is the leader of advanced wireless services and Europe has fallen behind?

Europe had been a pioneer of innovation and deployment in wireless communications for a dominant period in the history of this technology. From the first GSM standard to the first LTE network in Scandinavia, Europe led all the way. Till about 6 years ago, the European wireless market was at par or even better than the American market in certain aspects. But the scenario is changing now with the United States taking over as the leader of next-generation wireless services. Here are a couple of quick statistics to support this view. The GSM Association’s recent report estimated that 19% wireless connections in US would be on LTE by year end compared with 2% in the European Union. Wireless capital expenditure (CAPEX) has declined slightly in Europe over the past 6 years but has shot up more than 70% in US over the same period of time. While it is somewhat unfair to compare the whole continent with a single country, most of Europe has moved together when it comes to telecommunications. Many nations have common wireless operators who face similar challenges.

Let us first look at how USA became the frontrunner of the global mobile telecom industry. Avid telecom followers would remember that US was considered late to the 3G party. Till about 2007, 3G adoption in US was slow and only a few business users were tempted by the need to access data on their phones. Blackberry was considered the best in the industry. Mass market tablets were non-existent. All that started to change with the launch of the first Apple iPhone in mid-2007. Data usage exploded. With AT&T being the sole carrier of the device till early 2011, its data uptake shot up 8000% in 4 years. Accessing Facebook, GPS, sports scores, news, travel websites, restaurant reviews etc. while on the move became the cool thing. Google followed Apple with its open source Android operating system. By 2009, the market was flooded with Android powered phones from Samsung, HTC and Motorola. Apart from AT&T, Verizon, Sprint and T-Mobile jumped aboard the Android bandwagon and also started noticing a sharp rise in data hungry customers. To attract more subscribers initially, all of them offered unlimited data plans. Although data brought in additional revenue, the cost of offering data per bit was going up because of the additional capital and operational expenditure. The initial reaction was to boost network speeds in existing 3G networks. Thus, HSPA and HSPA+ (also referred to as 3.5G) technologies were deployed by AT&T and T-Mobile. Verizon Wireless had a different predicament. Their 3G version, EVDO Rev. A, topped out between download speeds of 3 and 4 Mbps in normal traffic conditions. This was slower than the WCDMA and HSPA data speeds provided by other operators. Given this constraint and the exploding smartphone market, Verizon’s best option was to embrace the next generation LTE technology. Timely auction of the 700 MHz spectrum in 2008 acted as a booster. After launching their first LTE network in December 2010, the operator rapidly deployed the technology all over US and now covers most areas of the country. Sprint put its money on WiMAX initially, but realized in a few years that LTE is the future and finally launched LTE last year. Despite being hammered by data demand from millions of iPhones, AT&T Wireless took its time to jump on to LTE. Their first LTE network came into operation 2 years ago. T-Mobile decided to squeeze the most juice out of its HSPA+ networks and launched LTE in March this year. All 4 carriers have LTE-Advanced on their roadmap in 2-3 years. Telcos have essentially learned the importance of both ‘first to market’ and ‘best to market.’ Subsidized handset availability served as another catalyst for the smartphone revolution in US. Personally, I am not a fan of 2 year service agreement with the provider, but it does make that latest phone more affordable. Increasing smartphone usage pushed the service providers towards LTE. The traditionally expensive cellphone service in US (with ARPUs among the highest in the world) played a major role in keeping the industry booming. And while customers want lower bills, they want faster speeds and increased capacity too. A direct implication of this approach is the quality of service in US that is widely considered to be among the best in the world.

A healthy, stable and encouraging regulatory environment goes a long way in deciding the quality of telecommunication services. The US regulator FCC and the government prioritized opening of more spectrum in order to promote advanced wireless services deployment all over the country. Mergers and acquisitions have also acted as shot in the arm for the industry. Japanese operator, Softbank acquired 80% of Sprint and Sprint completely acquired Clearwire. T-Mobile merged with MetroPCS and AT&T bought Leap Wireless. While smaller and local service providers still remain in operation, the recent M&A activity has made sure that 4 well-financed, stable and competitive service providers remain in the US industry.

Europe’s lackluster performance in the field of cutting-edge wireless technologies can be attributed to various factors. The recent financial meltdown across the continent gets part of the blame. While the American economy has substantially recovered, Europe has seen a prolonged economic struggle. Sovereign debt crisis and lack of faith in Euro have affected the growth and competitiveness across the continent in the past few years. Needless to say, the telecom sector has been adversely affected. Telcos have become risk averse and CAPEX in fresh wireless infrastructure like LTE has been sluggish. Bitter experiences of the past have also prevented large scale investments from the European telecom firms. Around the turn of the century at the height of tech bubble, many of them spent billions of dollars in buying 3G spectrum and in developing infrastructure for the technology. It left them with huge debts and telcos are still milking their 3G assets to recover that investment. Vodafone CEO Vittorio Colao called the 3G auctions in UK (in the year 2000) an aberration, that was not going to repeat itself. That auction raised about $35 billion for the government, while the 4G auction earlier this year in UK fetched only 10% of that, an amount much more reasonable and affordable for the bidders. Similarly, Germany raised a staggering $67 billion from their 3G auction, but the 4G airwaves fetched only $5.5 billion in 2010. The lesson had been learned and repeating the same mistake with LTE and 4G would have been suicidal. In fact, the Czech regulator canceled fourth generation spectrum auction earlier this year, since the high bids would have hampered the operator’s finances with the costs being passed on to the customer. The auction will be held again later this year and the idea is to encourage new players to enter the market.

Higher competition and lack of consolidation is another impediment. Europe has more than 100 mobile service providers spread across various regions but the European Commission’s antitrust policies have kept the market fragmented. Direct consequence of high competition is the lower ARPU. The GSMA report estimated the 2012 ARPU in Europe to be $38 as compared to $69 in US. The more money a service provider makes, the more it will invest in the latest technology. Consolidation brings in economies of scale. It must also be noted that many European governments have awarded airwaves for LTE services, but the telcos are taking their own time in bringing up LTE since the data market is still developing. This brings us to the discussion on consumer appetite. In my personal experience and I am sure many would agree, the mobile subscribers in US are hooked to their smartphones more than people from any other country. According to various estimates, they use five times more voice minutes and twice as much data compared to their European counterparts. This ties into the ARPU numbers mentioned earlier in this post. The telecom crash of early-2000s has surely taught the industry that if the demand is rising only slowly, where is the need to hurry on the infrastructure? Fragmented spectrum across various nations has exacerbated the operator’s troubles too. Telecom companies like Vodafone, Orange, T-Mobile and Telefonica provide mobile services in many areas and they would very much like a harmonized spectrum approach. The European Commission’s attempt to make 800 MHz the digital dividend spectrum across all EU member nations by this year is good in theory but difficult in implementation. It has been met with only limited success with many countries expressing inability to meet that policy requirement.

According to a Cisco report, wireless data speeds in US are on an average 75% faster than the corresponding speeds in the EU. In my recent travels across Europe, speed tests showed download speeds ranging anywhere from 1 to 5 Mbps depending on the country. These were essentially 3G and HSPA network speeds. Due to lack of LTE roaming, I could not experience the LTE speeds in Europe. Interacting with fellow telecom professionals in the continent, I was convinced that Europe has been slow to embrace LTE, although LTE deployment is now picking up pace in some European countries. One could argue that why compare a single country, US with the whole continent? And does it really matter, if consumers are not complaining? There is some logic to these arguments. But Europe can learn from America’s telecom industry. The European Commission has been sending encouraging signals towards introducing industry friendly reforms. If the merger of Telefonica’s O2 with the Dutch company KPN’s E-Plus in Germany is approved, it could set the tone for further M&As across Europe. Earlier this year, the continent’s telecom commission expressed willingness to create a unified telecoms market across Europe in order to foster cross border harmonization of the industry’s policies and spectrum. Any such move could face stiff resistance from different quarters with operators having diverse viewpoints especially on issues like free roaming. But where they do agree is that investing in LTE will keep the European economy globally competitive. Only time will tell how fast they can catch up with not just US, but also with other LTE leaders like South Korea and Japan. Maybe they will lead again once 5G comes along?

Should wireless operators be concerned about Over-the-top (OTT) services?

Skype, Facetime, Google Voice, Facebook Messenger, Rebtel. WhatsApp, iMessage, BlackBerry Messenger. While the former set of services is generally used for voice or video calling and the latter for messaging, the common factor among all these services is that they have been designed to bypass the cellular network. Instead they rely on a home or local Wi-Fi connection. Let us also be clear that they work well on the wireless operator’s network too, but it is preferable to utilize the Wi-Fi network for bandwidth heavy services like Skype and Facetime. Over the top or OTT services are the ones which transport and deliver content in the form of IP packets directly to the user device. As long as the calls are made or the messages are exchanged using these OTT applications between two devices connected to the Internet, the customers do not pay anything on a per call or per message basis. Of course, a broadband Internet connection or a smartphone data plan is required. Thus the concept that the OTT services are free is a partial myth. But general assumption is that the user already has one of these connections and as a result can take advantage of over the top content.

Eventually, OTT could become a source of anxiety for the wireless operator since it implies that customers would no longer pay for voice minutes or messaging. However, at present any such concerns are overblown. In a recent telecom conference at the University of Colorado Boulder, I had a small interaction with AT&T’s CEO, Randall Stephenson. While emphasizing that AT&T will soon deploy Voice over LTE, he said that OTT services were not causing any unease in the company and there is no threat to the revenue stream. He was also of the opinion that there is not much that the company can do about it since that is the way technology is progressing. This is understandable. The best a wireless service provider can do is to steer the customers towards a smartphone with data plan. It can not exercise much control over the content. Unless the device itself does not support or blocks certain apps, the operator will support them, especially if the competitors are doing the same. Also the bigger operators in US like Verizon Wireless and AT&T now offer unlimited voice and messaging plans bundled along with a specific amount of monthly data usage. As a result, operators have a steady but mostly saturated stream of revenue coming from voice and text messaging. And although voice revenues still exceed the data revenue, the future is definitely data. From an operator’s perspective, unlimited data plans are only good to attract new customers since it is well-known that these plans cause a huge strain on the wireless network. As long as the telcos can charge the consumer on tiered data basis, their revenue is secure. Over the top services can also serve as a source of income through data roaming. With global boundaries shrinking, more people are traveling every year. Looking to connect with their friends and family while on the road, they will rely on the high speed data networks if WiFi is not available. In such a scenario, irrespective of whether the phone’s voice roaming plan or an OTT app is used, the customer will be paying the service provider. On the other hand, operators who make most of their revenue from pre-paid or pay as you go services could be adversely affected by the proliferation of over the top apps. Wireless service providers in India fall in that category. But over the top services are mainly limited to messaging in such regions. Video calling is still done using a laptop or PC. When users start making bulk of their calls using Skype or Facetime on their phones, the operators whose business model is based on pre-paid could see a decline in revenue. Again, this is not an immediate concern, since pre-paid customers are usually not very data-hogging.

Telcos have responded to the OTT situation in different ways. Protectionism and blocking services is a near-sighted and consumer unfriendly move, so must be avoided. A better solution for the telcos is to offer attractive pricing in order to directly compete with such services. Some operators are jumping on to the OTT bandwagon themselves, although the jury is still out on the effectiveness of this strategy. A couple of years ago, Sprint joined hands with Google voice and consequently Sprint customers had the opportunity to enjoy all benefits of Google voice. Telefonica’s Tu Me is a smartphone app which offers free calls, messaging and location based services through WiFi or the cellular network. T-Mobile’s Bobsled and Clever Connect are the carriers’ attempt to fend off the OTT challenge. However, all such services or apps launched by operators have met with only limited success. Rich Communication Services (RCS) is another proposed solution. RCS is being marketed by the GSM Association as ‘Joyn’ and will be built into the phones. It will allow voice calling, video calling, instant messaging etc. along with simultaneous capability to transfer files and share videos across multiple networks and devices with anyone in the device contact list. Unfortunately, RCS has not generated much interest so far. The reason for absence of a widely effective response to the OTT conundrum is obvious. Currently the service providers are not intimidated by over the top applications. Telcos have realized that there is benefit in partnering with OTT services rather than competing with them. The business models are being adapted to capitalize on the OTT phenomenon to generate incremental revenue so that operators do not become just dumb pipes and utilities in the future. This revenue may come at the cost of voice and messaging revenue, but it is futuristic and exhibits long term vision. The service provider also must acknowledge that from a users’ perspective, the mechanism of carrying the content does not matter. The quality and the overall experience take the top priority followed by the price of getting the content delivered.

From a long term mindset, OTT cannot always be ignored. The countries which are witnessing a faster penetration of smartphones will have a majority of subscribers on data plans within the next few years. Those circumstances would be different. It is then that the operators should get worried about over the top issue since growth from their native voice, message and data services would become stagnant. But who knows, may be there will be another ‘big’ thing in our wireless telecom industry 5-10 years from now, which would compensate well for any declining bottom lines because of OTT. Twenty years ago, not many foresaw the boom in mobile phone voice business. A decade ago, who would have thought that we would be so addicted to mobile Internet that gazing into our smartphones or tablets would become a daily time consuming habit? So let us wait and watch. As for now, OTT is a secondary concern and not a primary threat.

Progress of LTE in Europe

Europe has been a leader in deployment and adoption of latest mobile communication technologies. Many European countries started providing 3G services much before US in the early part of this century. Surprisingly, same cannot be said about LTE in Europe. Although the technology is in different stages of implementation in most areas of the continent, some service providers do not even have the spectrum for deploying LTE.  The slow acceptance of LTE in Europe can be attributed to various factors. HSPA and HSPA+ are widely available in the continent. These are basically the enhanced versions of 3G, but have the capability of providing much faster data speeds than a typical WCDMA or CDMA2000 network.  Secondly, many operators are still recovering the huge amount of investment that they made in 3G spectrum and infrastructure. Intense competition has hurt the operator’s bottom line. As a result, they do not want to aggressively invest in building LTE networks unless the whole ecosystem reaches a certain maturity level. A tough economy and financial meltdown in Europe has further delayed investments in the next generation wireless networks. Spectrum auction faces different kind of delays in many countries. Also, it is not fair to compare individual countries and LTE front-runners like US, Japan and South Korea with the whole continent of Europe. If looked on a country level, some like Sweden and Germany have taken the lead in deploying LTE. In fact the world’s first LTE commercial launch was accomplished by TeliaSonera in Sweden in December 2009. USA has definitely taken the lead in terms of both implementation and adoption of LTE. However, we have to understand why US jumped so fast on the LTE bandwagon. Much credit for that must go to Verizon Wireless. Verizon’s version of 3G tops out between 3 and 4 Mbps in terms of downlink speed, and if the operator wanted to compete with HSPA and related evolved versions of the WCDMA (and hence the GSM) group, it had no other option but to start deploying a faster technology. And once a big nationwide player offers higher speeds, the others have to follow to keep up with the competition.

It is beyond doubt that LTE in the long term can be a win-win situation for both the service provider and the customer. For more on that, look at one of my earlier blog posts here .  In order to discuss developments surrounding LTE in Europe, I have focused on 10 most populated nations in the continent. As you read through, you will realize that between them, these 10 demonstrate how various areas of Europe are at different stages when it comes to the LTE ecosystem. Assume all networks in these countries use FDD-LTE unless specified otherwise.

Russia – The world’s largest country adopted a novel approach with spectrum distribution last month by selling the LTE licenses for free to four operators – MTS, Vimpelcom, Megafon, and Rostelecom. The Russian government believes that fast LTE network rollout and launch will help in stimulating the economy. The conditions are that the network should be launched by mid-2013 with nationwide coverage by 2019. Each operator was granted airwaves in the 800 MHz band with more frequencies to come later in the 700 MHz, 2.5 GHz and 2.6 GHz band. MTS has been providing LTE services since April this year using TDD in the 2.6 GHz frequency range. Another big Russian operator, Yota also started offering mobile broadband services from early 2012 in the 2.6 GHz band using LTE.

Germany – The Deutschland took early lead in deploying LTE. The operators were granted spectrum in 800 MHz, 1800 MHz and 2.6 GHz band two years ago with the condition that they will rollout service backwards, starting from rural areas and later moving on to big urban centers. Vodafone D2 started offering LTE in late 2010, followed by Deutsche Telekom (T-Mobile) in April 2011 and O2 (Telefonica) in July 2011. All three are using the 800 MHz band. Earlier this year, Deutsche Telekom and O2 launched LTE in some urban areas using the 1800 MHz and 2.6 GHz band respectively. Vodafone Germany also plans to utilize the 800 MHz band for the same purpose later this year.

France – LTE in this beautiful country is still in trial stages. All four major French operators – Orange France, SFR, Bouygues Telecom and Free Mobile won airwaves in the 2.6 GHz band in an auction last year. Except Free Mobile, the other three also bought 800 MHz licenses. Orange France has launched LTE in Marseille in June and all four service providers are expected to commercially launch LTE services on a larger scale in early 2013.

United Kingdom – UK has planned LTE spectrum auction for later this year with commercial services expected to be launched next year. The auction will sell airwaves for the 800 MHz and 2.6 GHz band. Vodafone, Telefonica’s O2 and Everything Everywhere (joint venture between T-Mobile and Orange in UK) are expected to be the top bidders. Recently, the UK regulator approved Everything Everywhere’s plan to refarm the 1800 MHz spectrum for LTE. Another operator, UK Broadband started providing mobile broadband services earlier this year in London. UKB uses TD-LTE in the 3.5 GHz frequency range.

Italy – Italy had auctions last year in which four operators won LTE spectrum. Vodafone Italy and Telecom Italia got airwaves in the 800 MHz, 1800 MHz and 2.6 GHz band. Wind bought frequencies in 800 MHz and 2.6 GHz and 3 Italia (Hutchinson) got licenses in the 1800 MHz and 2.6 GHz band. While 1800 MHz spectrum is already available, the 800 MHz and 2.6 GHz airwaves are expected to be available by early 2013. All four operators have been running tests in various cities and are gearing up for a large scale launch towards the end of 2012 or early 2013.

Spain – Vodafone Spain, Telefonica and Orange Spain won spectrum in the 800 MHz and 2.6 GHz band in an auction held last year. The 800 MHz spectrum will only be made available in January 2014. Telefonica commenced LTE services in Barcelona in the 2.6 GHz band around the time of Mobile World Congress earlier this year. I must point out here that Telefonica is using Alcatel Lucent’s Light Radio technology. This revolutionary technology uses shoebox size base stations and improves both indoor and outdoor data speeds. Vodafone Spain and Orange Spain have announced plans for commercial LTE rollouts later this year.

Ukraine – There is not much clarity on the state of LTE in Ukraine. Kyivstar, MTS-Ukraine and Ukrtelecom are three service providers that are trialling LTE in the country.

Poland – This eastern European nation was also one of the early adopters of LTE in Europe. Two small Polish operators, Centernet and Mobyland launched LTE in September 2010 in the 1800 MHz band. Both operators jumped directly from 2G to LTE. Around the same time, Aero 2 launched mobile broadband services using TD-LTE services in the 2.6 GHz band. Polkomtel started offering LTE late last year in the 1800 MHz frequency range. Three other operators – PTK Centertel (Orange), PTC and P4 are looking to launch LTE after they acquire spectrum in an auction later this year in the 800 MHz and 2.6 GHz band.

Romania – The Romanian regulator is planning to auction LTE spectrum next month in the 800 MHz, 900 MHz, 1800 MHz and 2.6 GHz band. Vodafone Romania and Orange Romania intend to launch LTE by next year. Two other operators, RCS & RDS and Cosmote will also take part in the spectrum auction. All these operators have been running LTE trials.

Netherlands – Five service providers – KPN, Vodafone Netherlands, T-Mobile Netherlands, Ziggo and Tele2 won 2.6 GHz spectrum in Netherlands in an auction held in 2010. All of them launched LTE services in May of this year. More frequencies are expected to be auctioned later this year in the 800 MHz and 1800 MHz band.

Again, since it was not possible to discuss all the European countries in one post, only 10 countries have been covered. Nordic countries of Norway, Sweden and Finland deserve a special mention here since they were among the first adopters of LTE in the world. Western Europe is still lagging in the LTE game, but more activity is anticipated in those countries in the next one year. On the tariff front, many European operators are using a speed based data pricing model. This implies that a subscriber pays more to access a 100 Mbps LTE network as compared to a 14 Mbps HSPA network. Note that these are theoretical speeds and not actual download speeds. It would be interesting to see if other service providers around the world follow this pricing model.