With the first LTE deployments expected in the US within the next 12 months, CommsMEA assesses the merits of fourth generation technologies and how operators stand to benefit.
Fourth generation wireless broadband technology Long Term Evolution (LTE) made massive strides at this year's Mobile World Congress in Barcelona.
Over the past few months WiMAX has been hogging the 4G headlines with some high profile launches around the world, from Saudi Arabia to Pakistan to the US, but US carrier Verizon Wireless' announcement in Barcelona last month that it had chosen Ericsson and Alcatel-Lucent to build its fourth generation LTE wireless broadband network - the first agreement of its kind - was a significant step for the GSMA-backed technology.
LTE is expected to deliver an experience similar to that of fixed-line broadband, with comparable bandwidth and latency. US vendor Motorola claims LTE offers up to four times the capacity for HSPA and EV-DO voice and data standards, and increased speeds will not only mean faster email and internet access, it will also allow new services to be developed and integrated.
Although Verizon Wireless last month claimed that it had recorded download rates of 50mbps to 60mbps during recent trials, the actual speeds that consumers will experience could be considerably lower when LTE services are rolled out, as much will depend on the amount of spectrum regulators decide to allocate to the carriers.
Fred Wright, senior vice president Motorola Home and Networks Mobility, says that the allocation of spectrum is one of the issues surrounding LTE at the moment.
"There are only a few countries that have held auctions - Norway, for example, has just finished up an auction and there are two or three other countries in Western Europe," he says.
"More and more of those auctions will be held in the coming months and as that spectrum gets auctioned off carriers will begin to start making decisions about vendors and who they want to select."
Verizon Wireless' trial used the 700 MHz spectrum which had been used for television signals but was acquired by Verizon, AT&T and others following an auction by US regulator the FCC.
Motorola's first commercial release of LTE solutions is expected to take place later this year, and it is expected to include products for the 700MHz and 2.6GHz spectrum bands which the vendor says will help operators increase coverage and capacity of their networks.
Vendors say that it makes sense for existing operators to switch to LTE as equipment that is already in place can be upgraded to the faster standard. Indeed, a key selling point of Motorola's latest base stations is that they will be compatible with future migration from GSM and Edge to LTE.
"LTE will be a migration play, which means that in every case it will be specific to the customer," says Eric Pradier, vice president MotorolaHome and Networks EMEA and Asia Pacific Services.
"It won't be green field contracts as with WiMAX, it will be migration contracts where the value proposition will be much more than just to deploy the technology. It will be about how the existing infrastructure is migrated, with a very phased approach, offering new services and savings."
Pradier says that he expects to see LTE trials in the Middle East at the start of next year. "I think that we could see some first steps in 2010. There are operators who want to launch wireless broadband services and for who the quick evolution to the first stage of LTE could be the solution."
Pradier adds that "the more sophisticated" markets with "a high level of standards in terms of services" appear likely to be the first in the Middle East to deploy LTE.
As vice president strategy of Alcatel-Lucent's wireless networks product division, André Méchaly has a particularly strong insight into LTE.
Méchaly says that while standardisation for LTE is yet to be finalised, vendors such as Alcatel-Lucent and Motorola are already at advanced stages of testing the technology, and he says that the type of LTE technology Alcatel-Lucent demonstrated at the Mobile World Congress was not a prototype. He says that deployments of the technology could occur as soon as this year.
"Verizon is today probably the operator with the most aggressive plan in terms of its LTE map, as they plan to introduce the technology in the second half of this year or next year," he says.
Japanese operator NTT DoCoMo is also at an advanced stage of LTE testing, and could deploy a network in the next two or three years. European operators seem to be more muted on the subject of LTE, although many operators on the continent are "looking at the technology or trialing it", according to Méchaly.
LTE has numerous advantages over existing wireless networks owing to what Méchaly describes as its "flat architecture". When compared with a 3G network, LTE removes various bottlenecks and simplifies the infrastructure.
For example, it combines the RNC (radio network controller) functions with the Node B, or base station, removing a stage that created additional latency in 3G networks.
"On top of that, in LTE voice is carried by Voice over IP, so we no longer have the circuit switch core which we have in the 3G network. We have simplified the network, reduced bottlenecks, and improved the latency," Méchaly says.
LTE also makes more efficient use of available spectrum and can operate on a larger set of frequencies than the previous technologies, which will be vital in the next decade as demand for wireless broadband proliferates.
"You can have a big pipe of 20 megahertz width while 3G is limited to five. It can carry four times more users on the pipe." Méchaly says. "3G is working well at the moment, but if I look at my son - and if all of the children of my peers are behaving like him - 3G will not be enough."
Méchaly is particularly excited by the type of applications that LTE will enable. Apart from the obvious interactive applications such as instant messaging, gaming for several people in parallel and better quality video conferencing, Méchaly admits that it is almost impossible to predict the type of services and applications that will grow from LTE. "We cannot foresee more that 15% of what will happen in terms of applications," he says.
Despite this, new applications that end users feel they need will be vital to the demand for and take up of LTE networks. "[For the take up of LTE] you need the infrastructure to be ready, and the terminals to be available with the correct price and autonomy. Further, you need operators with at least nice offers or tariffs, and you need to ensure the end-user has an interest in using the service," Méchaly says.
And for this reason, Alcatel-Lucent is focusing on mobile applications as well as the technology behind LTE, by working closely with its partners involved in mobile applications.
The company has established a special group, called NG Connect, to work with companies from other parts of the mobile ecosystem and to allow application providers to test products on its LTE technology.
The objective of the initiative is to help ensure that when operators launche LTE networks, there will be companies ready to provide services for end users.
"The purpose of NG Connect is to create the complete ecosystem of applications, vendors, industry, verticals and utilities to work on utility." Méchaly adds that the initiative will allow companies that may have good ideas about potentially successful applications, but which lack the necessary funding to develop them, to test their products and experiment with new ideas.
"We invite those companies to come to our labs, test software applications, test their terminals, test their car with plug-in LTE module in front of our network. On this initiative we are followed by big names like HP and Samsung but also smaller names, very innovative companies." Méchaly adds that 14 companies are already working with Alcatel-Lucent through NG Connect and this is set to grow.
For Méchaly, the initiative also reflects the changing relationship between vendors, operators and other parts of the telecoms ecosystem torwards greater cooperation.
"The operators used to see the equipment vendors like us as just the people who sell the hardware, base stations and pipes. But if we don't help operators to be successful with technology the operators will not buy it, so it is our duty as a vendor to try with them. It is our duty to help them be successful so that we are also successful."
With a limited supply of credit affecting companies around the world, many networks are looking for ways to reduce capital expenditure. Motorola's Fred Wright says that the vendor has adjusted its targets accordingly.
"What we did is we took our annual sales forecast for WiMAX and we toned it down by about 20%-25% in anticipation."
And With WiMAX targeted at burgeoning operators without an established customer base, it seems that it could be more vulnerable to the economic downturn than LTE.
Joe Cozzolino, Motorola's senior vice president and general manager of its Home and Networks Mobility division says that the economic crisis has not had the same effect on demand for LTE.
In part this is due to LTE not yet being ready for roll out, but it is also because it is targeted at incumbent operators with a steadier supply of cash, and more established -albeit strained - access to credit lines.
"I think we'll see that some customers will reduce their requirements, so that we can reduce the cost of the initial network, or maybe they will start with a smaller network than the plans they had, maybe start with a region instead of an entire country.
"I think you'll still see it moving, but maybe not as aggressively with huge roll outs right up front," Cozzolino says.
WiMAX, which is already operational in many countries around the world, has a considerable headstart over LTE. But Cozzolino estimates that within six years the balance will have shifted to the degree that 70% of the world will use LTE and the remaining 30% will be served by WiMAX.
The technology used in the development of WiMAX has been used by vendors to develop LTE technology. "There's about a 60% cross over of WiMAX technology into LTE, because it's all based around OFDM," Cozzolino says.
"All of that technology development carries forward to LTE. The difference being that LTE for most of the carriers is FDD (frequency division duplex), whereas WiMAX is TDD (time division duplex), except for China Mobile, which will do LTE TDD. A lot of the re-use is not just on the RF side of it, but also on the end-to-end systems and the architecture."
Concerns that a lack of interoperability would result from a split over TDD and FDD were in part allayed in Barcelona, when China Mobile, Vodafone and Verizon announced that as part of their ongoing three-way trials the operators had successfully demonstrated in laboratory conditions that LTE is capable of operating effectively in both unpaired as well as paired spectrum.
With ST-Ericsson and Qualcomm developing equipment capable of supporting both FDD and TDD types of LTE technology it raised the prospect of a single capable of operating on both standards.
Wright says that vendors won't see any revenue recognition from LTE until 2010 or later.
"LTE is a longer cycle. The only customer in the world that has made a decision on a supplier is Verizon, but none of that equipment will be turned up for the beginnings of commercial service until 2010, and no other customer in the world has made any decisions to buy LTE. So decisions on LTE are going to be further out in the future, and the big wave on LTE is going to start to occur probably around 2012."
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