Korean wireless service operator, SK Telecom Co. Ltd. (SKM - Analyst Report) has received the permission to use additional frequencies that puts it closer to realizing Long Term Evolution-Advanced or LTE-A tri-band carrier aggregation (CA) technology in its LTE-A network. The company is targeting speed of up to 300 Mbps across its network, representing an Advanced LTE network infrastructure.
The carrier wants to mix 10 MHz of 800-MHz spectrum along with 20MHz of 1,800-MHz spectrum and 10 MHz of 2.1 GHz spectrum. This would allow the company to realize its target of 300 Mbps speed. Notably, SK Telecom secured 30 MHz bandwidth in the 2.1 GHZ band through a frequency option in 2010.
The company has already built a LTE-A network using 10 MHz of 1800-MHz spectrum and 10 MHz of 800-MHz spectrum. In Nov 2013, it got the permission to combine both sets of spectrum (1,800 MHz and 800 MHz) that can offer up to 225 Mbps of speed.
The company is preparing to install base stations for LTE in the 1,800 MHz band to secure nationwide coverage and expects to start building the same in 2.1 GHz band by the second quarter of 2014. The new network will be available as soon as the supporting handsets are available in the market.
LTE, the most sought after next-generation super-fast wireless communications technology is rapidly gaining momentum globally owing to demand for high-speed wireless data services and mobile video. Unprecedented progress of smartphones has only fuelled the demand.
As per GMSA Intelligence, currently there are approximately 176 million LTE connections worldwide and more than 1 billion LTE connections are expected globally by 2017.
SK Telecom is not a laggard in this regard having unveiled the world’s first LTE-A network that renders speed of up to 150 Mbps or twice as fast as LTE and 10 times swifter than the 3G network. At the end of 2013 the company had 13.5 million subscribers.
We believe that the plan for ramping up LTE speed would help SK Telecom in providing better services to its customers, making it more popular among wireless users and improving its market share.
SK Telecom currently carries a Zacks Rank #1 (Strong Buy). Another stock worth considering is China Unicom Hong Kong Limited which has the same Zacks Rank as well as BT Group Plc. (BT - Snapshot Report) and Telecom Italia S.p.A (TI - Snapshot Report) which carry a Zacks Rank #2 (Buy).