China's Huawei may be a serious challenger to Sweden's Ericsson for implementing fixed wireless services in remote rural areas of Latvia under Lattelekom's plan for finishing the modernization of the last of its Soviet-era network, this blogger has learned.
Both equipment and solution suppliers have been in touch with Lattelekom about building a cdma 450-based fixed wireless voice and data network to reach the 60 000 or so subcribers still linked to analog rural switches and accessing the network through obsolete wire and cable links.
Cost is apparently an issue, since it appears that Huawei and, possibly, another China-based contender have suggested they can do the job significantly cheaper than Ericsson. If this proves true and Lattelekom – an Ericsson customer for some of its main switches and its DSL network upgrade – chooses the lower cost offer, it would be a repeat in miniature of Ericsson's loss to Huawei on a major contract in Thailand. Huawei is reported to have bid 40 % under some benchmark figure set by the Thais.
The idea is to provide both digital voice and high-speed data (probably wireless SDSL) to these subscribers under a LVL 30 million plan adopted by Lattelekom last year to modernize the last, difficult and potentially expensive subscriber lines. In some cases, the subscribers and potential subscribers in isolated rural homesteads could be given apartments in the nearest town for less than the cost of running or upgrading the wireline to their farms or residences. In other words, there is only a wireless solution
With the Latvian government's adoption of a national frequency plan on April 19, the Public Utilities Regulation Board will be able to decide whether and how to allocate part of the 450 Mhz spectrum for rural fixed telephony. Lattelekom has asked to be given some 450 Mhz spectrum for its rural fixed wireless, but the request has gone unanswered for many months. Now it remains to be seen whether the regulator will wait for new rules on the allocation of "scarce" spectrum that could make it possible to auction or charge a less-than-nominal fee for the rest of the 450 Mhz spectrum. If Lattelekom has to bid against others, this may make cost even more of an issue in the rural modernization project.
Ericsson has the advantage of being a known and established supplier to Lattelekom and probably can offer some cost of ownership advantages with its higher price tag. The support base is just across the Baltic, not in China (unless Huawei has built up a permanent Europe-based support organization, which it might have).
However, but cutting the base price low enough, the Chinese supplier can probably outweigh such factors. In any case, a lot of equipment is probably more or less "generic" and increasingly reliable, so barring new hurricane-strength storms, you will not be flying in technicians from Shenzen very often to deal with a malfunctioning cdma450 base station.
Whatever the choice, cdma 450 is the hot new/old (where NMT used to be) 3G grade technology and Lattelekom has few other currently viable choices for finishing up network modernization. WiMax is another, unproven technology and primarily aimed at data/internet markets (possibly IP TV), not voice. Somehow, I don't see some Latvian rural shack dweller installing Windows Media 10 (or whatever it is now) on his PC so he can get HD TV broadcasts over WiMax.
Other background noise
Triatel, Latvia's only cdma 450 wireless, fixed wireless and internet access provider, is moving ahead rather slowly. Uptake of the "non-standard" service is somewhat disappointing. Huawei is said to have seen them as well.
Business customers may be waiting for Latvian Mobile Telephone and Tele2 to move beyond their token UMTS deployments to see what their coverage and pricing look like. Triatel has positioned itself as serving mainly business customers, who will wait to see what the "big two" and possibly Bite GSM have to offer on the UMTS side. Also lacking (except for internet access) are 3G specific content and services. Mobile TV and entertainment (games, tones, video) will lead the way on the consumer side once 3G handsets start selling.