But what about the issue of network capacity? Are the networks going to get bogged down?Lee: Yes, they will. That's why many operators are really trying to do LTE on a phased manner. LTE runs on a higher frequency band -- 1.8GHz, 1.9Ghz, 2.3GHz, 2.5GHz, 2.6GHz. In order to take full advantage of LTE, you need to take advantage of high-capacity bands. A lot of operators have to build more base stations in order to provide the same footprint. You have to be closer.Lee: Precisely, because the high frequencies don't propagate as far. Therefore the radii of the base station would decrease. When that decreases you have to add more base stations. Otherwise you have drops left and right. The existing base station buildout has to be relooked at. It's very expensive. Rental payments are very expensive. Also, with a single base station, there are only so many single concurrent users you can take on. It's not a huge number. So [carriers] have to embrace small cell [base stations that have shorter communication ranges]. Small cells as a physical device is not expensive, but deployment of small cells -- rental payments, opex -- is high. So it'll be several years before there is true high-capacity LTE network. What we have built in Malaysia -- at the high frequency band -- has positioned us very well to compete for the long term.
What do you think about femtocells -- little teeny tiny base stations?Lee: Femto is OK, But femto requires you to have good fixed-line communications, You use someone else's fixed line [DSL or cable broadband, for example] as your blue valentine iphone case backhaul [to link to the Internet], We toyed with femto when I was at Sprint, We used femto as a retention tool, If a customer was complaining about no coverage at home, and we don't have an ability to deploy coverage, we send them a femto, But that's not a sustainable model, because for femto to work, you have to have good broadband, The customer then has to pay two bills: the have to pay a bill to us, a 4G operator, and a hefty bill to getting high-quality backhaul..
What do you think of the European Commission's goal to spread broadband faster and the network operators' reluctance? Who's right?Lee: The EC has the right request. They believe broadband has direct correlation to improving economic conditions of all member countries. The problem is that the carriers haven't sorted out the business model. So the goal is noble, but unless you know how to capitalize on that broadband, you'll have a big sinkhole. This is going to be a long debate. What's the resolution? Some government subsidy where the EC argues if we fund this our economies will improve faster?Lee: My answer will take the form of an example of how we do things in Malaysia. When the government decided to auction 4G licenses five years back, they decided not to grant them to the existing incumbents. They grant them to new entrants like us. We built this network, and now the other guys are hurrying up to build their LTE network and the national incumbent is hurrying to build more fiber-connected homes. So I think introducing competition in the form of a new entrant is good for the ecosystem. It has to be done thoughtfully and given to someone who has the credibility.
Do you think the European market is hobbled by national incumbents?Lee: So it seems, Until people see a business model, they will not jump in and invest, Hopefully with guys like us having success, there will be more people trying more 4G deployment globally, Many operators are still using the model of the legacy, We need to get them to understand the new model and hopefully use that to catalyze other operators to start driving this harder, Piggybacking off a contract to supply 10,000 schools with Net access and 130,000 Chromebooks, a telco upstart gains an blue valentine iphone case emerging market foothold, Hear its CEO's thoughts on the 4G honeymoon, Google Fiber, and dumb pipes..
AMSTERDAM -- How does a national-scale carrier go from nonexistent to profitable in five years?. There's probably no single, simple path. But in the case of YTL Communications in Malaysia, the answer combines aggressive construction of a 4G network, a government boost for new network operators, and a business that embraces the services that many carriers don't like. Be respectful, keep it civil and stay on topic. We delete comments that violate our policy, which we encourage you to read. Discussion threads can be closed at any time at our discretion.