I'm at Ericsson's Capital Markets & Analyst event in Stockholm today. There's been a huge amount of discussion about mobile broadband, in terms of traffic growth, moves towards HSPA and LTE, and the demand for backhaul capacity.
The CEO of Mobilkom in Austria spoke about that country's huge shift towards HSPA, to the extent that it's starting to catch up with ADSL use in terms of susbcriptions (dongles again...). Austria is a bit of an outlier in adoption of HSPA, with data traffic apparently now 20x outweighing voice on the network, but it's an interesting indicator of what's coming down the line.
In particular, it's indicating that the leading HSPA networks are now having to deploy an extra set of transmitters on the base stations. For those readers who don't follow this area, 3G UMTS networks (including HSPA), use 5MHz spectrum slices. Most operators have allocations of 10, 15, 20MHz or more, but typically haven't been using all of their theoretical capacity thus far.
The interesting thing for me is just how fast this occurs. Now, Austria is unusual, but even if you assume that most countries will take two years from launching flatrate dongle plans, rather than one year, to fill up the first 5MHz, it's an early indicator of demand ramp-up for spectrum (and capacity) over the next few years. This is especially true as end users get used to higher-speed HSPA, as well as increases in the total number of users. Add in some growth in data traffic from phones with decent browsers or video clients, and it starts to look as if the 2.1GHz 3G band is going to fill up very quickly.
This has a number of implications.
Firstly, there's a short term business case for femtocells - if they can work out cheaper than adding a second or third 5MHz carrier on the macro network. On the flipside, some of the calculations I've seen have suggested that femtos substitute for new extra base stations rather than adding extra kit to existing ones. I'm not sure what the comparative costs are, but I guess that bring up a 2nd carrier must be a lot less.
[Not much discussion from Ericsson about femtos for 3G macro-offload (or indeed at all), to be honest. My take is that as well as potentially impacting its overall integrated base station/transmission business model and bringing in new competitors, I get the distinct impression that the Big E is a little skeptical about some of the femto hype on a fundamental basis.]
Secondly, it means that operators will need to get extra spectrum if they're serious about continuing to drive mobile broadband. 2.6GHz is the obvious big chunk, but refarming 900 and 1800MHz GSM starts to take on more urgency ( as well as expediency for coverage reasons).
Lastly, it means that operators are going to be faced with some unpalatable choices in terms of capex for HSPA - having to choose between fulfilling the need for extra 5MHz carriers in high-use areas, versus continuing 3G build out in areas with no coverage at all. I suspect that this is going to drive a lot more emphasis on EDGE - and EDGE Evolved, as an interim coverage solution in marginal areas, as it wring more life out of existing 2G base stations. Interestingly, the GSA has been talking up EDGE today as well.
On the other hand, the company refreshed its overall take on broadband traffic, reiterating what it said this time last year. In a nutshell, even with massive growth in HSPA & LTE, the world's total mobile data traffic will still only be a tiny fraction of fixed-line IP (<5%), even out to 2013. The main driver of fixed-broadband traffic is seen as IPTV, especially on GPON fibre and VDSL access lines.
Dean Bubley's Disruptive Wireless: Thought-leading wireless industry analysis
11 comments:
Isn't this also going to demand more backhaul. I've been getting the message that backhaul might be a bottleneck.
Rick
Absolutely, backhaul is a major bottleneck in many networks, and adding a carrier just exacerbates this.
If you have 3 sectors on a site @ 7.2Mbit/s, and then double up on this with another frequency, then it definitely stretches backhaul beyond that deliverable with E1/T1 lines. Fibre or microwave are likely needed.
Dean
I've followed this blog for some time, and agree with most that has been said.
This time, I have trouble following the logic behind the conclusions.
1) HSPA dongles are used by those who need broadband on the move and by those who for whatever reason do not want to go through the trouble of getting DSL/cable.
Femto cell is not the solution here: it can not be moved around freely, coverage is extremely small (hence the name femto) and it needs DSL for backhaul.
2) Operation with multiple carriers has been designed in right from the start; this is why all 3G operators have at least 2x10MHz allocation, some even 2x20MHz.
Further, all network and user equipment support funtions like interfrequency handovers and load balancing. You say you're surprised how fast this occurs, I'd say it's been long time coming.
3) Refarming 900MHz is only a partial solution, as 900MHz band is 2x35MHz total. Role of 900 is to provide the much needed coverage, both indoors and in rural areas.
4) EDGE Evolved is hardly an interim solution, as it is not commercially available today (unlike e.g. WCDMA900). Even in an optimistic case it will take few years before there is sufficient population of user equipment to make it attractive for the operator, and even then theoretical 1Mbps top speed will fall short of consumer expectations, especially compared to 3.6M (already today) to 10Mbps (very soon) of HSPA.
Anonymous
Thanks for your comments.
1) Yes, I see your point about femtos - if 3G dongles are used instead of fixed broadband, why would you use a fixed broadband line to fit a femto....
Three main reasons I can see for femtos to absorb some of the HSPA traffic demand:
- some observers expect to see FON-type shared femto models, where an operators' subscribers can use *someone else's& femto
- there is a (small) possibility that people start using dongles or built-in 3G as a direct replacemcement for WiFi in their own homes, if the software & user experience is up to it.
- people using non-PC devices like iPhone, tablets etc, probably with integral 3G, or perhaps a bluetooth-enabled dongle acting as a centralised modem
2) I know that multiple carriers were designed-in to 3G. I also know that traffic growth has been much slower than many anticipated - at least until 2006.
What appears to have happened in the last 18 months though is a very sudden hockey-stick: even faster than the original growth expectations.
It's been a long time coming yes... but the recent *acceleration* of growth has been surprising.
3) Yes, I'm in agreement with that about 900MHz
4) Hmmm, I'm not so sure. I think people expect 10Mbit/s in dense areas. I think they feel lucky to get anything at all in remote locations.
The point I was making was that for a fixed amount of Capex, what are the priorities & the relative costs of continued rollout of 3G in sparse areas vs. making do with the ultimate incarnation of 2G.
Dean, I fail to understand why an operator who is seeing pressure on the 3.5G network because of the dongles will not simply bundle hotspot access (into the dongle package) and along with smart client to solve this problem. Why does this need femto at all?
anonymous1
Anonymous1 - there are numerous reasons.
WiFi hotspots have totally different use cases than femtos.
Femtos are for use in homes, WiFi hotspots in public locations like airports or cafes.
Ignore the quadplay hype - in most cases mobile operators won't also supply the customers' home broadband. So they can't use WiFi embedded in a home gateway, unless they want the hassle of customer support & provisioning someone else's AP.
In public locations, femtos have very little role to play - you won't see tham in airports, although there's a few optimists pitching them to cafes etc. Picos, maybe. So yes, in those locations you'd maybe want to try offload onto WiFi, but only *if* the operator is able to exploit it. Most mobile operators (rightly) don't have hotspot networks and are fairly hesitant about partnering.
Cellular and WiFi don't mix.
dean, i am not sure i understand your logic; i have heard first hand from operators in APAC that people are buying these dongles; and canceling their DSL. the young single crowd is doing this. this crowd is most likely to hang out at places where hotspots can be provided. so i would think offload can be done in these places.
as far as home is concerned, i see your point, but then femto is no easier or manage if you don't control the broadband. BTW - didn't VF just acquire a DSL company in Germany.... :)
anonymous1..
Yes, in some places people replace DSL with 3G dongles, in some places its a new group of customers who wouldn't have had it, and in others it's people who want both.
The "young single crowd" will want to use their laptops at home just as much in places with hotspots, probably more for doing things like streaming video, uploading pics to Facebook etc.
For home use, yes, there is certainly a problem with using a femto with non-managed broadband, although much less than with using non-managed home WiFi.
While there may be some WiFi coverage in places where the operator would like to offload, it generally won't be owned by the operator themselves, and perhaps won't be "roamable" either. In any case, mobile operators are generally very poor at managing WiFi connection management in parallel with cellular.
(Arcor has been a part of VF for years, it just bought out the minority shareholders)
AT&T Press Release -- anonymous1...
*******************************
AT&T Launches Free Wi-Fi for LaptopConnect Customers
Customers Can Now Connect in More Places with Addition of Nation's Largest Wi-Fi Network
San Antonio, Texas, May 20, 2008
Want to move your office to the hottest spot in town? Go right ahead. AT&T Inc. (NYSE:T) today announced that qualifying LaptopConnect customers can now access more than 17,000 Wi-Fi hot spots free of charge. Users can access Wi-Fi at nearly 7,000 participating Starbucks locations plus thousands more AT&T Wi-FiSM locations, including restaurants, airports, hotels and other convenient locations across the United States.
AT&T LaptopConnect uses AT&T’s wireless network to keep customers connected to e-mail, the Internet and business applications almost anywhere they can make a phone call. Qualifying LaptopConnect customers will now automatically receive a pop-up message alerting them to Wi-Fi availability when in range of an AT&T hot spot. At that point, customers who have downloaded the latest AT&T Communication Manager software to their laptop PC just need to click Connect to access the Wi-Fi connectivity. The offer is available to customers who subscribe to a DataConnect plan of $59.99 or more.¹ AT&T Communication Manager comes with new LaptopConnect cards and is available for free at www.att.com/laptopconnect.
"The combination of the nation’s largest wireless and Wi-Fi networks is unbeatable," said Michael Woodward, vice president, Business Mobility Products for AT&T’s wireless unit. "It’s the ultimate in mobility for laptops — AT&T’s wireless network plus more than 17,000 Wi-Fi locations."
AT&T also offers free Wi-Fi access to qualifying broadband subscribers. The company plans to expand free Wi-Fi access to additional wireless customers in the future.
When not in a hot spot, AT&T LaptopConnect cards operate on AT&T’s wireless network, which provides DSL-like speeds on the company’s 3G network in more than 275 markets in the U.S., reaching nearly 350 markets by year end. AT&T’s wireless network also offers data connectivity across AT&T’s EDGE network which covers more than 13,000 cities and towns and some 40,000 miles of major highways. Internationally, AT&T can offer customers data access in more than 145 countries and 3G roaming in 60 countries.
For the complete array of AT&T offerings, visit www.att.com. For more information on AT&T LaptopConnect, visit www.att.com/laptopconnect.
¹LaptopConnect users must have AT&T Communication Manager (version 6.8 or higher) installed on their PC. Support for free Wi-Fi through AT&T Communication Manager exists only for laptops running Windows operating systems on May 1.
*************************
not the best technical/user experience, but seems like a right step at least for this application...
Anonymous
I don't follow your earlier logic. If you suggest that subscribers' "HSPA dongles are used by those who need broadband on the move" then a following point "i have heard first hand from operators in APAC that people are buying these dongles; and canceling their DSL" makes nonsense of the earlier point. Suggesting that the dongles will be used statically at home rather than mobile. Which in turn supports the arguement for femto-cells
I work for a mobile phone company and ~80% of UMTS data usage with dongles is static. Supporting the use of femtocels
Post a Comment