Delegates at last week’s LTE World Summit reported at least one major concern for adoption of the new high speed wireless technology. The wide range of frequencies and options being considered may reduce the benefits of world scale production volumes. There are just too many different spectrum choices being proposed. Is there a simpler way forward?
The problem with standards is that there are so many of them
While there is only one LTE standard, it has been designed to accommodate and adapt to many different needs and requirements. It can be configured to work in almost any mobile frequency band, with a range of different frequency bandwidths and both FDD and TDD modes. This is a nightmare (or a challenge depending on your viewpoint) for equipment designers who need to determine which subset of options to build into their products.
Dean Bubley attended the LTE World Summit and concluded that there are too many spectrum bands for LTE: “At least 8 “core” bands, and another 10-20 also being deployed or considered. Europe will probably get by with three mains ones – 800, 1800 and 2600MHz.”
In my view, this will make it difficult to achieve low prices through high volume mass production and may delay the takeup of the technology.
Cost and quantity of spectrum is difficult to determine
The picture for network operators planning to buy LTE spectrum and rollout new networks isn’t very clear. While the Austrian LTE spectrum auction raised a minimal $39m last year, it did impose stringent conditions on the licensees to roll out service widely by 2013. In contrast, the German LTE auction raised over $5B.
At the same time, some regulators are setting limits. The UK regulator will set constraints on how much spectrum each operator can buy. The French regulator, said to be hoping for to raise $2B, will also cap each operator to 15MHz of spectrum.
It seems to me that lower frequencies, particularly sub 1GHz, are likely to raise substantially more money because they can be used to provide longer range/wider area coverage. The higher frequencies, such as at 2.6GHz would be ideal for femtocell deployments because they match the low power/short range/high capacity profile
This confusion makes it difficult for network operators to evaluate how much spectrum is worth to them. If their spectrum isn’t mainstream, then the choice of supported devices might be reduced. If spectrum is limited, will they be able to reach the full potential of headline LTE datarates?
China Mobile and Apple agree a deal for LTE-TDD iPhone
To add to the mix, China Mobile and Apple have agreed to do an iPhone that supports the Chinese TDD flavour of LTE, although they haven’t decided when. This would knock open a market of hundreds of millions subscribers and significantly help China Mobile in its aim of promoting LTE-TDD technology, both in and out of the country.
Meanwhile, Verizon Wireless strongly suggested that the next lot of iPhones will be LTE/UMTS/GSM/CDMA “world phones” - as long as Qualcomm’s chips are ready in time. They have invested heavily in their LTE network which is now available in the majority of the US.
Spectrum refarming is on the agenda
In Europe, several operators have been planning to rollout 3G at 900MHz, the frequency originally used for 2G GSM. The higher efficiencies and data rates available using 3G, the longer range/in-building penetration of 900MHz combined with the now widely available (and in-use) 3G mobile devices, means that this is more cost effective than 2G. With the range of new “Multi-RAT” (RAT = Radio Access Technology, such as GSM, UMTS or LTE) basestations from the leading vendors, which can operate on 2G, 3G and even 4G from the same cabinet – this is also much easier to deploy.
Service providers will now be looking closely at the cost of buying additional spectrum for LTE, which regulators are of course keen to sell at high prices. I don’t think we’re going to see the astronomically high prices paid for 3G spectrum (some $35Billion in the UK alone) this time. Instead, careful scrutiny is being applied to the investment case and other options are being chosen. Perhaps because there isn’t a common worldwide band of 4G spectrum available, the concern that service providers would lose out and be restricted to 2G services doesn’t apply.
So one option on the table is to refarm the 1800 spectrum for LTE. Telstra was one of the first to promote this frequency (you may recall it pioneered the rollout of 3G at 850MHz), setting up an interest group in March 2010 and testing it with three vendors last year. This would avoid the need to buy any new spectrum and simply make best use of their existing assets. In many countries it would, however, require regulatory approval.
Femtocells may be a cheaper option than more spectrum
Another consensus view across the industry is that large capacity growth won’t come from additional spectrum alone. It is by growing the number of small cells that really drives total capacity up dramatically. The term “HetNet” is becoming more widely used, meaning a combination of wide area and shorter range small cells working together to provide a seamless, high capacity wireless service everywhere.
So the number crunchers making the difficult decisions in service providers today will be calculating the true value of potential new LTE spectrum. They’ll be evaluating whether this is a cost effective solution compared with refarming 1800 alongside an aggressive campaign to deploy femtocells in both public and private areas.
You can also read more detailed summary of what was said at the LTE Summit presentations on the 3G4G blog.