MTN SA has begun work on a pilot network using long-term evolution (LTE), the next generation mobile broadband technology, and will have 100 base stations active in Gauteng by the end of the year.

At the same time, the company is stepping up the deployment of its own high-speed fibre-optic cables to its base stations, with plans to have as many as 1 600 towers connected to fibre by the end of the year, from 600 now. It has awarded contracts to five new suppliers to extend the network.

However, it will still be a few years before consumers can expect to see big benefits flowing from all this investment, says MTN SA MD Karel Pienaar. LTE-based cellphones and dongles are not ready for mass-market adoption yet, he cautions, and investment in fibre takes time.

First-generation LTE is regarded as a bridging technology from third- to fourth-generation mobile networks. Later versions of the technology, called LTE Advanced, will eventually offer theoretical speeds in excess of 1Gbit/s.

“We are running big trials on the LTE side,” Pienaar says, adding the network may be extended to another metropolitan area during the test phase. “The radio technology has to be LTE, because we can get the next level of capacity and speed and efficiency.”

MTN is building its LTE network using frequency at 1 800MHz, which it’s traditionally used for voice services, while it waits for industry regulator, the Independent Communications Authority of SA, to hold a spectrum auction in the 2,6GHz band. It is also keen to get access to the 800MHz band to offer LTE. This band should be freed up by December 2013, the date at which television broadcasters are meant to stop using the spectrum as they migrate to digital technology.

But, says Pienaar: “It will take five more years until LTE is truly ready for the average consumer”.

That doesn’t mean MTN (or its rivals Vodacom and Cell C) are holding back on investment to deliver next-generation wireless broadband networks. All three companies are investing aggressively in providing their own fibre to their base stations as well as to build national fibre networks. Vodacom is also running a test LTE network, though the company hasn’t disclosed the scale of it.

Over time, prices of mobile data will come down. “People will spend similar amounts, but they will use 10 to 20 times the amount of data,” Pienaar says. “For all operators, the challenge is how to monetise the investment in infrastructure. The jury is still out on how we will make the right returns. We believe the returns are there [but] the economic model here is one of scale.

“I can have a [workable] model if I can get the entire population using many gigabytes of data a month.” — Duncan McLeod, TechCentral