AzQTel: Transitioning from WiMAX to TD-LTE

AzQTel is an Azerbaijan-based telecommunications company founded in 2005. It provides wireless internet, high-speed broadband internet, and other value-added services in Azerbaijan. The company launched its 4G broadband services in October 2010 under the “Sazz” brand name. These services are based on WiMAX technology. At MWC 2015 Shanghai, ZTE TECHNOLOGIES interviewed Jayhun Mollazade, CEO of AzQTel. He discussed AzQTel’s latest developments, the Sazz 4G brand, and the progress of AzQTel’s LTE transition. He also shared his views on the partnership with ZTE.

Q: Could you tell us about AzQTel’s latest developments in Azerbaijan?

A: We have recently expanded our wireless broadband network to provincial cities and towns. In the early stages of our network rollout, we focused on building the network in the capital city, Baku, which is situated on the Absheron peninsula. After we completed the network build-out in Baku, Sumgayit and Xirdalan in 2011, we expanded the network to more than 13 regional cities and towns to the north, northwest, and south of the country.

At the same time, we started providing wireless internet and fixed broadband services to corporate clients by utilizing backhaul microwave technologies.

At the BakuTel International Exhibition and Conference held in December 2014, AzQTel, in cooperation with ZTE, introduced TD-LTE technology to Azerbaijan for the first time. Visitors to the Sazz booth observed a demonstration of the TD-LTE technology capability of generating speeds of 80–100 Mbps. Dignitaries who visited the Sazz booth included Ilham Aliyev, President of Republic of Azerbaijan and Ali Abbasov, the Minister of Communications and Information Technologies. They visited the opening of the exhibition and stopped by the Sazz booth. More and more, the BakuTel conference has become an international event. Representatives from China, Turkey, the United Kingdom, and many European countries now attend.

AzQTel has been working with ZTE to develop a plan to migrate the network from WiMAX to the more robust TDD-LTE. The company’s shareholders and board has endorsed the strategy to deploy TDD-LTE in the capital city, Baku, and Absheron Peninsula, providing full mobile coverage. The WiMAX technology equipment will be gradually re-deployed in regional cities and towns in the country.

Many government departments, institutions, energy companies, and banks are located on the Absheron peninsula. This is where a lot of Azerbaijan’s commercial and business activities take place. Therefore, the need for mobile broadband is very high in this

region. In general, the demand for mobile services and in particular, mobile broadband services, have grown worldwide, and Azerbaijan is no exception.

In that sense, our plan is to build a high-quality mobile broadband network as soon as possible in Baku city and Absheron peninsula. We will upgrade our network capacity rapidly in the capital city and redeploy WiMAX base stations in the towns and villages of the country. In this way, the company can hit two targets with one bullet. One is to upgrade our network capacity and improve QoS in the capital city and Absheron peninsula, where our customers are not satisfied with the capability of WiMAX technology. The other is to expand our network coverage by redeploying the WiMAX technology to the regions and rural areas of the country where WiMAX technology still performs well. By doing this, we will upgrade our capacity in the capital city and expand our coverage nationwide.

Q: Azerbaijan has been making great progress in developing telecom sector in recent years. How has AzQTel contributed to this?

A: AzQTel is a wireless internet service provider. We provide services in 16 cities and towns across the nation. The financial investment and the construction of the network is a major infrastructure development project for the country.

Even though AzQTel is a private company, we support the government’s policy for the fast development of the country’s ICT infrastructure. We understand that the broadband, telecom, and IT sectors constantly need to be developed, expanded, and upgraded.

We have negotiated with a number of international investment groups (including Chinese), to raise enough capital to implement our seven-year business plan, which involves migrating from WiMAX to TDD-LTE and TDD-LTE Advanced. We will fully utilize 4G and 5G technologies in order to cover all of Azerbaijan with the best wireless mobile broadband technologies and provide QoS to the population who have more and more been attracted to the convenience of utilizing the mobile technology.

Q: Could you introduce Sazz 4G? What is the importance of this brand for your overall strategy? How will it evolve in the future?

A: The Sazz brand was introduced into Azerbaijan’s telecom market by AzQTel in October, 2010 for the first time. AzQTel is the legal name of our company. We entered the telecom market with the brand name Sazz, a new logo-type which is colorful.

Sazz is directed towards young people. Sazz, in Azerbaijani, means something “good quality”. In a way, it’s kind of “cool” internet. We have about 50 brand stores which display our logo colors, and the furniture in each store has been designed specifically for our customer services and sales. The Sazz brand is a recognizable brand name, and the demand for Sazz services is

very high.

However, WiMAX is fast becoming a technology of yesterday. At present, many WiMAX operators are migrating to TDD-LTE and FDD-LTE. In 2016, our plan is to come to the market with “Sazz plus” or “Sazz Advanced” and continue to build up our brand name recognition.

Q: What are your major concerns about TD-LTE?

A: Our main concern is that we need to make our engineers learn more about TDD-LTE. They have visited ZTE’s R&D office in Xi’an. For the last year and a half, we have been trying to understand how TDD-LTE could be rolled out on 3.5 GHz because AzQTel holds 142 MHz frequency capacity in the 3.5 GHz and 3.6 GHz frequency bands, which are now Band 42 and Band 43 and are designated by 3GPP as mobile broadband spectrum. So it is a big spectrum for us for rolling out TDD-LTE technology.

We joined the Global TD-LTE Initiative (GTI) two years ago and it has provided the opportunity to introduce ourselves and the company, to meet with vendors, investors, and other operators in similar situations as us to exchange experiences. We have met with operators that have already made progress in rolling out of TD-LTE technology, such as China Mobile, SoftBank Mobile in Japan, ON Telecom in Brazil, and other bigger and smaller operators that have already succeeded in migrating from 3G to 4G or from WiMAX to TD-LTE.

We have learned about the differences between FDD-LTE and TD-LTE. We believe that TD-LTE is more practical to us as we are a wireless internet services provider, not a GSM voice provider. The download capability of TD-LTE is as strong as that of FDD. The asymmetric nature of TD-LTE technology enables you to design a network in such a way that 70 percent to 80 percent would be dedicated to the downlink, and 20 percent to 30 percent would be dedicated to the uplink. This is in line with our experience today. WiMAX and LTE are both based on OFDM and time-division technology.

We consider TD-LTE in a way as WiMAX 2 (an advanced version of WiMAX standards which was never implemented). As you may know, the plans for WiMAX 2 were abandoned and TD-LTE will be adopted by about 250 WiMAX operators in 140 countries. The TD-LTE technology also has a roadmap for future development, like TD-LTE advanced. I’m sure that TD-LTE technology will be the technology for the path to 5G. In that sense, our senior management team including the COO, CTO and myself (CEO), are constantly engaged to become more and more knowledgeable about the TDD-LTE technology.

We have already accumulated lots of experience in the wireless nomadic and quasi mobile technology like WiMAX. However, TD-LTE gives us experience for a more robust mobile technology, because it has more advantages over WiMAX, such as dual carrier capability, which WiMAX technology failed to deliver. It has better load balancing, better mobility and better data signal propagation. We really recommend many operators, who still are utilizing WiMAX technology, to adopt TD-LTE technology. Once they have intention to get engaged in this mobile broadband business, they will consider TD-LTE technology as one of the best technologies in the marketplace today.

Q: What is your strategy of transitioning from WiMAX to LTE?

A: Our strategy is to overlay TDD-LTE technology over the existing WiMAX network. We will deploy the TD-LTE base stations adjacent to the existing WiMAX sites. Ultimately, we will add more sites for better coverage, and continue to increase mobile coverage in Absheron Peninsula.

For a certain period of time, the WiMAX and TD-LTE networks will continue to provide services simultaneously. Ultimately, we will encourage our existing customers to migrate to TD-LTE services. We will direct new customers to new Sazz Advanced services.

When our migration has been completed, most of our existing customers can enjoy broadband services with more quality, and their needs for data usage can be satisfied better. We will shutdown the WiMAX network in this region and move the WiMAX base stations to 60 provincial city centers across the nation.

After that, customers can roam from the provinces to the capital city or from the capital city to the provinces. We will be able to provide dual modems that can switch between LTE and WiMAX.

However, we understand that in 2017 and 2018, there will be even more advanced antenna technologies and versions with 8 × 8 MIMO technology. At that time, we will move our existing base stations in Baku to the regions in order to get rid of the WiMAX technology, and completely deploy more superior TD-LTE advanced technology in the capital city. Then we will have a full TD-LTE coverage nationwide.

Q: What are your top priorities for the next three years?

A: Our priority is sales. We will build the network, market our services, and reach out to the Azerbaijan community, specifically the young people who are very savvy with internet technologies.

Our target is to acquire more customers and become one of the leading mobile operators in the country. We hope to reach and capture 20 percent to 25 percent of the mobile broadband market in order to increase our customer base.

Q: Do you have any popular services for young people? Could you introduce them to us?

A: Well, at the moment, our company specifically is not utilizing its own applications or services for the customers.

Our existing customers are using the internationally known applications and services, such as Facebook, Skype, and WhatsApp. All of these social networking services are available on the internet. They are using these applications now, but we are learning the experience from China Mobile and other Chinese mobile operators.

With the upgrade of our networks, it is also a part of our plan to introduce some customized and tailored services for our customers.

Q: What is your overseas expansion plan?

A: Azerbaijan’s market lacks penetration in terms of mobile broadband users. There are only 3G and WiMAX services for wireless and mobile customers. Both technologies are lacking in quality because the growing needs for data usage exceeds the capability of existing 3G and WiMAX.

I expect the GSM operators to migrate to FDD-LTE technology after testing. So my forecast is there will be two FDD mobile operators and one TDD mobile operator, which is AzQTel.

In the past three to five years, we saw very high growth rates for the mobile services, and the penetration rate for GSM services has reached over 100%. However, the real mobile broadband is not yet on the marketplace. I can say that opportunity is still ahead of us. I think there will be heated competition between existing mobile operators, including us. Customers will take advantage of this competition where each operator is trying to provide better services for lower possible rates.

I would say that three mobile broadband operators will be able to deliver quality mobile broadband services to customers after maybe 5 to 7 years, or 7 to 10 years. At this moment, Azerbaijan’s telecom market, like many other markets around the world, is still at an early stage for mobile data services. In my opinion, 3G and WiMAX are not at the level that can satisfy the growing needs for mobile data consumption.

Q: What do you think of MWC Shanghai 2015?

A: First of all, the level of the Asian mobile conference was upgraded to level of MWC in Barcelona. I think this is very positive. Now, this forum is becoming more and more reputable every year. All the vendors, operators, chip makers, bankers and investors are attending. They are discussing technologies, the Asian markets and services. It’s a kind of big market channel for Asia.

Q: How would you assess ZTE’s team and solutions, especially 3.5G TD-LTE solutions?

A: I think ZTE has contributed enormously in the R&D of 3.5 GHz. ZTE became one of the biggest vendors and suppliers of SoftBank Mobile in Japan. SoftBank Mobile’s standards are very high, and ZTE has done a great job for the last two years to improve their quality of the 3.5 GHz technology. I’ve been talking to my Japanese colleagues from SoftBank Mobile. They said that ZTE reaches the level that can satisfy the standard requirement of Japanese operators. That’s a demonstration of its high standard.

Q: What will be some of the trends in the global telecom market in 2016?

A: The trend for the global market will be, I guess, still the vendors and technology providers working together on the synchronization of TDD and FDD technologies.

In addition, 5G is becoming more and more effective. We are going to understand what frequency is going to be used for 5G. The market hype around 5G is becoming a reality. I think all of the 4G and 5G debates will continue in 2016.