LTE will not be the complete answer to mobile operators’ capacity woes, so they must find ways to off-load traffic from their conventional networks before it is too late. Femtocells could provide an effective solution, but they must compete with other methods.

While many in the femtocell community are initially focusing on the use of femtocells to solve indoor coverage problems, this approach is less applicable in countries with good indoor cellular coverage. However, the use of femtocells to off-load traffic from conventional 3G base stations could become increasingly important, according to a new report from Unwired Insight.

3G network capacity crisis in 2010

The new report, entitled ‘Will 3G Networks Cope?’, shows that the relentless growth of 3G traffic volumes will create a network capacity crisis for some mobile network operators as early as 2010.

According to the new report, 3G traffic volumes are set to increase 20 times by 2014, driven by many factors, including the increased adoption of traffic-intensive services such as mobile broadband and mobile TV, the growing proportion of smartphones and dramatic reductions in mobile data pricing.

For example, pricing of mobile data has changed dramatically since the days that SMS was the dominant service. In an analysis of mobile broadband pricing in different countries, Unwired Insight found that this had fallen as low as USD$2 per gigabyte, which is nearly half a million times smaller than the price per gigabyte of an SMS message.”

Some operators are relying on LTE alone to dig them out of a hole

Some operators are relying on LTE to boost network capacity so as to support future traffic demand. It has been well publicised that LTE network deployments by some operators will start in 2010, with over 30 operators already committed to LTE. LTE network infrastructure vendors are quick to point out that LTE is capable of much higher peak data rates than today’s HSPA networks, achieving in excess of 100Mbps with wider spectrum allocations of up to 20MHz.

LTE will not be a panacea, for a number of reasons

A number of important factors will limit the impact of LTE on network capacity, particularly in the short-term:

• low penetration of LTE handsets and devices
• average throughput per base station increasing by much less than the magnitude suggested by peak data rates
• limited new spectrum, which will constrain LTE’s performance and capacity potential
• restricted geographical deployment of LTE networks.

Lack of LTE handsets and devices

LTE’s ability to relieve the capacity constraints of HSPA networks will be limited until mobile network operators can seed a sufficient number of LTE devices in the market place. Unwired Insight does not expect to see LTE handsets until 2011, and realistically it will take several years for a significant number to build up in the marketplace.

Average throughput significantly lower than peak data rates suggest

A key feature of LTE is a significant improvement in peak data rates compared with HSPA. This enables a base station to maximise the data rate to end users that experience excellent radio conditions (for example, mobile users located very close to a base station). However, even with LTE, mobile users that experience poor signal conditions will continue to achieve relatively poor data rates.

It is only a lucky few within a base station coverage area that will experience data rates anywhere near the peak rates possible. These will increase the average throughput delivered by the base station, although by nowhere near the magnitude suggested by the peak data rates.

Limited additional spectrum

Given that 3G operators will need to dedicate spectrum to support HSPA devices and W-CDMA voice telephony services, there will be a significant challenge to secure additional spectrum for LTE, particularly for incumbent 3G operators will large customer bases.

Don’t confuse initial commercial launch with nationwide rollout

In the current economic environment, many mobile network operators will be reticent to embark on early nationwide roll-outs of LTE. No doubt some operators will be vying to announce early deployment of the technology, but the slow roll-out of basic W-CDMA coverage suggests that it could take many years for ubiquitous LTE coverage to materialise.

Alternative technologies will be required to fill the gap, so step forward femtocells

3G operators will face a constant challenge to provide adequate network capacity to keep ahead of future traffic demand, so they will need to deliver services using alternative means, through a smart combination of femtocells, Wi-Fi, mobile broadcasting solutions (such as DVB-H) and sideloading, as shown in Figure 1.

Figure 1: Complementary mechanisms to deliver content and services to 3G devices
[Source: Unwired Insight, 2009]

Femtocell vendors now have the opportunity to provide operators with one of the best solutions for capacity relief for their conventional 3G networks. However, their marketing must take account of the fact that they are not the only show in town.

About the Author

Dr Mark Heath is co-founder of Unwired Insight, which offers unique insight and new perspectives by bringing together in-depth knowledge of wireless technologies and end-user behaviour. Mark has co-authored over 40 reports on the wireless industry. His reports have been purchased by over 250 companies worldwide.

Latest report available for immediate download

This latest report entitled “Will 3G Networks Cope?” is available for purchase by credit card and immediate download from ThinkFemtocell. Alternatively, you can request an invoice and pay by bank transfer or through your purchasing department.

A 10 page preview of the report including some of the key findings is available for free download from our resources section.

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