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Thursday, May 20, 2010

Thoughts on the LTE conference

So, two days being bombarded by LTE technology and operator trial/deployment presentations.

Some take-aways:

- When it works, LTE apparently works very well in terms of peak speeds etc.

- For a greenfield operator in an uncontested market, with limited current 3G uptake and users without pre-existing expectations, it would likely be a winner in the medium term

- Unfortunately, LTE is going to deployed into a very messy world, with entrenched business models, diverse frequency allocations, existing "good enough" voice and data technologies that have predictable user experience - and capital constraints imposed by the economy and investors.

The frequency thing is a bit of a killer. So far, Verizon is doing 700MHz, one of the Swedish networks is at 900MHz and the other at 2.6GHz. NTT DoCoMo is using 2.1GHz and later 1.7GHz. China is looking at the TD flavour of LTE in 2.6GHz. Some operators were talking about refarming 1.8GHz for LTE, and some of the US operators mentioned their unique AWS band. O2 is trialling 800MHz digital dividend band in the UK. And I think I've seen a reference to 2.3GHz as well somewhere.

In other words, it's a mess - and quite a few early operators were trying to talk up their preferred option, in an attempt to drive scale. Then add in the fact that most of these bands are quite small in terms of outright size - not enough for competing operators with 2x20MHz allocations, for example. And the fact that the largest spare band at 2.6GHz is (a) still be auctioned in many places, and (b) is, according to O2 UK "very disappointing" in terms of propagation in the real world.

One other message that came out quite strongly is that investors do not seem happy about the notion of another big round of radio network capex, especially given the doubts over whether mobile broadband can be monetised beyond connectivity.

(It was notable that my term "happy pipe" seemed to resonate with quite a few people at the event, which was itself, amusingly, held in a part of Amsterdam called Der Pijp).

My conclusion is that in many markets, LTE networks will develop in a patchwork form, either for specific hotspots to use new spectrum to manage high densities of data users, or else perhaps for city-wide deployments. But especially in Europe, the use of 2.6GHz is going to struggle to enable LTE-only networks - they will either need to be dual-band with a sub-1GHz frequency from Day One, or else will have to rely heavily on HSPA as a fallback. (In which case, why bother with the added complexity - why not just use 2.6GHz HSPA instead? or WiFi?)

This means that the concept of an "LTE application" looks pretty weak in the medium term. And I really don't buy the idea of M2M devices (or cars) being ideal for LTE rather than 2G or 3G - coverage is king. Who wants an LTE tablet that doesn't work in at least as many places as their existing dongle, let-alone an LTE healthcare terminal?

One other thing is likely to disappear from the near-term wishlist is roaming - especially because of the likely diversity in LTE voice implementations for the next 10 years. And if voice roaming is ditched in favour of 2G / 3G circuit connections - why is LTE data roaming urgent anyway? Frankly, 21Mbit/s roaming costing $5 per second is quite enough - who really wants 100Mbit/s at $25 per second? Let's wait for the data roaming price to lose a few zeros before worrying too much about cross-border LTE, eh?

The other elephant in the room is that of user expectations. To be honest, the whole concept of "the user" was woefully lacking in the event. I think I only heard the word "battery" mentioned once. Customers have been accustomed to both price and experience for HSPA and will expect that as a baseline for LTE. There is also strong evidence from the fixed broadband world that the feasible premium for (lots of) extra speed is typically only 0-30% on the price, except for a handful of enthusiasts. Once we get to LTE phones, users will also have reasonable expectations that voice quality, reliability, battery life and coverage are at least as good as that achievable with a $20 GSM handset.

Overall, some aspects of LTE technology development sound positive. But I'm still not expecting any sort of miraculous or revolutionary shift in user perception of mobile broadband on a 5-year view, versus what we have today.

It will also be very interesting to see if any of the new Indian 3G licence-holders opt for LTE rather than HSPA. I suspect they will find the business case quite tricky, given market immaturity and an immediate pent-up demand for cheap mobile broadband in a market with little copper or cable.

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1 comment:

Sami Jokinen said...

You probably missed my presentation ;) I tried at least to touch these during the given 20min slot.

>The frequency thing is a bit of a killer.
Frequency is fundamental resource for any wireless technology – little we can change there. Frequencies for mobile communications are fragmented, and even that we must accept as a fact.
With that in mind, it is a huge advantage to the whole industry if one radio technology can be used on any band, in both FDD and TDD modes and in wide range of bandwidths. This is so even if we cannot put all 20+ bands into one device any time soon.
This should be obvious, if you consider the alternative: instead of multiplying the RF parts to cover the fragmented spectrum allocation, one would need to duplicate also the baseband parts, the whole protocol stack towards core network, not to mention interworking functions between all the radio techs.

>2.6GHz is going to struggle to enable LTE-only networks - they will either need to be dual-band with a sub-1GHz frequency from Day One, or else will have to rely heavily on HSPA as a fallback.
You are right here. Greenfield operator with just 2.6GHz has a challenge, especially if he wants to compete with the incumbents with their rules and business models. Having dual-band or HSPA as fall-back is not an issue for most incumbents.
But, the Greenfield operator’s case does not change dramatically, even if he chose another radio tech. My view on HSPA on 2.6GHz has not changed from what I commented earlier. Bear in mind, 2.6GHz HSPA with 4x5MHz carrier + MIMO does not exist even in the spec.

>the whole concept of "the user"
I agree HSPA sets the example for many, but not for all. Many of those using HSPA do not know they are using HSPA – and they do not care to know. Different consumer segments have widely different expectations; early LTE devices will make many advanced users happy, but may not meet the expectations of broad audience.

>users will also have reasonable expectations...battery life at least as good as that achievable with a $20 GSM handset.
I’d love that, especially in a big screen high end smart phone with always on data and active usage pattern ;) Is it then fortunate that also here HSPA sets the example?

As before, I work for Nokia and these opinions are mine.