LTE potential for rural deployments in Slovenia

Abstract:
In the recent years we have seen an explosion in the mobile data traffic driven by significant improvements in the user experience and the flat-rate data plans. Although this has increased operators' data revenue, it has also led to the decoupling of usage and revenue. As the usage increases, costs can now rise faster than revenues, leading to lower margins. This shift in the network economics management means that cost control has now become the primary strategic focus of many operators. This issue becomes even more important when deployment of the LTE network on its way. Mobile operators are currently upgrading their existing infrastructure to meet the traffic demands and to ensure a high quality of experience for all mobile broadband users but under current economic conditions this is challenging and costly. Is LTE a must for operator’s investments plans already this year? What is a driving factor for LTE deployments on 800 MHz - improved capacity or better signal propagation - and how are these issues considered when LTE is a planned technology for the digital divide bridging in the rural areas? Sparsely populated remote areas in Slovenia by themselves do not have the potential for achieving acceptable return on investment (ROI). The business case must be combined with the potential of the urban areas. This is proved with a data traffic analysis of classified base stations (e. g. rural, urban, suburban). Total cost of ownership (TCO) is assumed for Mobitel's network and calculated per base station. TCO per data traffic unit for a certain type of base station is estimated as the final result of this paper. The results clearly show a much higher TCO per traffic unit for the rural areas, which has to be combined with urban and suburban revenues if operators want to achieve satisfying ROI level. Deploying LTE is not economically viable when existing sites can be effectively upgraded to cater for the capacity demands. However, it is possible that drastic changes in the mobile user behaviour may trigger even further traffic generation, which will congest networks quicker, forcing operators to upgrade to LTE faster.