Feature Article

March 26, 2009

Consider the E in LTE

By Bob Emmerson
LTE is a long term, evolutionary goal. Given the media coverage and a slew of LTE/4G announcements from vendors and carriers, it would seem that the goal is getting close. Maybe we’ll see some commercial services in the 2010/11 timeframe — some — but the majority will come later. However, deployment of multi-standard base stations that are LTE compliant will start this year. They’ll start because most carriers want to evolve to LTE: they’re not in a hurry to get there.
       
The multi-standard path includes 2G, 3G, 3.5G (HSPA or 1xEV-DO) and LTE/4G. Right now, operators want to maximize the current 3.5G revenue streams as well as their investments. Ericsson estimates there are 174 HSPA networks in 76 countries with an estimated 180 million HSPA subscribers.
 
Wireless data worldwide comprises 17% of average revenue per user (ARPU) and, in the United States, wireless data is more than 20% of ARPU for the three largest operators. These Q1 2008 figures come from Chetan Sharma. Stats for 2009 are not available, but the success of smartphones indicates that the data sector is good shape, despite the economic climate.
 
By 2010 most GSM base stations in Western Europe would be over 20 years old, and they are being replaced by the new, energy-efficient, multi-standard systems that are software upgradable from GSM to EDGE, WCDMA to HSPA and HSPA to LTE. The ability to make software upgrades allows operators to boost capacity and make the air interface upgrade to LTE as and when it’s needed. In the meantime, they can continue with HSPA, which is also an evolving technology.
 
Consultant Alan Quayle makes some interesting LTE upgrade points in his blog. LTE will not greatly improve spectral efficiency compared with HSPA+. Within a 5MHz slot you could achieve perhaps 80 Mbps using MIMO (Multiple In Multiple Out) technology, compared to 100 Mbps with LTE. A 20% increase is unlikely to have customers demanding LTE. The only tangible difference will be a slightly lower round-trip delay for LTE perhaps down to 10-20ms compared to perhaps 30-35ms with HSPA+, though with a flat, all-IP core network, 20ms. Moreover, latency is only relevant for real-time communications and, right now, the bulk of traffic is asynchronous data.
 
Alan also points out that LTE is a global standard, with a global frequency plan. Therefore this technology can leverage global volumes, which is one reason behind Verizon’s decision to adopt LTE, rather than pay an average $15 premium for its (CDMA) devices. This is also the fundamental reason why the total cost of ownership of WiMAX networks will remain more expensive than LTE.

Bob Emmerson is TMC's European Editor. To stay abreast of the latest news affecting the European market, check out Bob's columnist page.

Edited by Erik Linask

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