The great broadband race – A US perspective
By Phil Marshall
After several false starts, consumers are now embracing mobile broadband and as a result, service providers in the US are scrambling to economically address market demand. While each service provider has its own approach to delivering mobile broadband, most are touting their solution as 4G. Verizon is aggressively pursuing Long Term Evolution (LTE), AT&T is essentially ’slipstreaming” Verizon’s efforts and plans to enhance its High Speed Packet Access network with (HSPA+). T-Mobile lacks spectrum to deploy LTE and is pursuing a strategy to aggressively pursue HSPA+. We believe that it is also investigating partnership prospects with Clearwire. Clearwire is also supporting Sprint’s mobile broadband initiative, initially with WiMAX which we believe will migrate to FDD-LTE in select markets, and ultimately TDD-LTE once it becomes available.
While there are marginal performance benefits with LTE over that of HSPA+, the major benefit for players like Verizon, AT&T and Clearwire is to leverage new radio spectrum resources. We estimate that Verizon and AT&T will increase the aggregate capacity of each cell site by 40 and 60Mbps for each LTE 10MHz carrier deployed. This contrasts with the 50 to 75 percent performance gain that we estimate between optimized LTE and HSPA+ networks.
As HSPA+ and LTE take hold, the need for multimode and multiband devices and infrastructure will balloon. A player like AT&T will require GSM/EDGE, UMTS/HSPA/HSPA+ and LTE modes traversing 700, 850, PCS and AWS spectrum bands. Verizon will require similar support across the same spectrum bands with CDMA 1X, 1X Advanced, 1xEVDO and LTE support. From an infrastructure standpoint, equipment vendors like Alcatel Lucent, Ericsson, Motorola, Nokia Siemens Networks, Huawei and ZTE have made significant strides with software defined radio (SDR) technologies to support multimodality. Solutions that deliver integrated multiband capabilities remain a challenge.
Since LTE technology has essentially been optimized for data services and leverages an end-to-end IP architecture we do not expect its wide use for voice telephony services any time soon. CDMA based technologies like UMTS and 1X are better suited to voice relative to OFDMA based technologies like LTE. In addition, it will take many years before end-to-end VoIP is capable of achieving comparable performance to traditional circuit switched voice over the air interface. We believe that both UMTS and CDMA 1X will prevail in the absence of viable substitutes for many years.
The race for mobile broadband supremacy amongst service providers will accelerate in 2011. As this occurs, we can expect significant experimentation in terms of service offers. Players will struggle with ballooning traffic and in the face of challenging economics will accelerate efforts to introduce network intelligence and traffic offload solutions. We believe that AT&T is ahead amongst its peers in developing these solutions.
NSN wins first Indian 3G deal, Huawei and ALU lurking
By Caroline Gabriel
Wireless infrastructure vendors have been pinning high hopes on the Indian 3G build-out to fill the gap left by the slowing of Chinese 3G deployments. But actual contracts have been delayed by disputes over government security rules. Now the gates may be opening at last - Nokia Siemens has announced the first 3G deal in the country, with Tata Teleservices.
This comes despite the fact that Tata, along with Reliance Communications, was cleared last week to purchase equipment from Chinese suppliers Huawei and ZTE. Although this ruling signalled the end of the frustrating delays over security rules, some western rivals may be disappointed they have to compete with their price aggressive Chinese rivals on an apparently almost level playing field in terms of clearance requirements.
NSN, which has walked away from certain 2G deals because of the intense price war in India, claiming they would be lossmaking, is leading the way in 3G, where the suppliers hope for a greater services component and slightly higher margins. The joint venture beat Ericsson, Alcatel-Lucent and both Chinese majors for the deal to supply W-CDMA base stations plus implementation support.
The contract highlights two key trends in new 3G deployments, especially in emerging economies - the Flexi base stations will be software programmable, making them upgradeable to LTE relatively easily; and the deal includes managed services, as Indian carriers increasingly outsource the running of their systems. This is where the margins lie in the subcontinent, and all the big vendors have stepped up their services activities in the region in recent years. NSN appointed its former head of services, and an Indian national, Rajeev Suri, as its new CEO a year ago.
“There is huge demand for mobile internet access in India, and that’s what 3G brings - we want to move quickly, which is why we’re the first to secure our key 3G technology and services provider,” said AG Rao, CTO of Tata Teleservices, in a statement. The cellco, which already buys 2G kit from NSN, has 3G licenses in nine of India’s 22 telecoms circles or operating regions. It offers GSM in 17 circles under its Tata DoCoMo joint venture and CDMA offerings under its Tata Indicom brand.
3G services are expected to launch in the country from early 2011, though state-owned BSNL and MTNL are already rolling out the new networks.
NSN may have scored the first points, but the Indian roll-outs will be hard fought battle. For a start, it seems the Chinese suppliers will be able to compete on a level playing field. Earlier this year, it was reported that the Indian government had blocked imports of infrastructure from Chinese majors Huawei and ZTE, or imposed tight approval processes on them, though more recently, it emerged that the authorities were tightening up certification procedures for all suppliers - which has delayed equipment tenders and frustrated the new 3G license holders.
However, progress is being made, with two carriers, Reliance Communications and Tata Teleservices, being cleared to buy telecom equipment from Huawei or ZTE. This could open the floodgates to a wave of purchases through the fourth quarter. Operators have been concerned at the delays to their roll-outs, the confusing rules, and the threat that they might not be able to take advantage of the price leverage that comes from including the Chinese suppliers in bids.
“The approval will definitely help the Indian telecom companies on the costing front. It also signals that security issues related to these imports such as spyware are now being resolved,” an analyst told Dow Jones Newswires. The vendors will be celebrating too - nearly all of them had cited delays in Indian deals as a negative factor in their second quarter results, and ZTE blamed a fall in first half revenue partly on delays to India’s safety inspections of communications equipment.
Meanwhile, Alcatel-Lucent says it is in talks to provide equipment for both 4G platforms in India, and is negotiating with “most of the people who have won the spectrum” in 2.3GHz, recently awarded in India’s broadband wireless auction.
Reports from Reuters and India’s Economic Times quote Munish Seth, Alcatel-Lucent’s new country head for India, indicating the potential customers include Reliance Industries, the only privately held firm to win 2.3GHz spectrum on a national basis (via its acquisition of ISP Infotel). He also mentioned another ISP, Tikona Digital Networks, which has licenses in several telecom circles or operating regions.
The negotiations could lead to orders in early 2011, the reports indicate, though this will depend on the Indian authorities clarifying rules on security checks for telecoms suppliers, which have been holding up deals for 2G expansion, 3G and BWA.
The big debate in India has been whether the 2.3GHz TDD spectrum would be built out with WiMAX, as expected until earlier this year when Qualcomm decided to bid for licenses, in order to promote the newer TDD alternative, TD-LTE. Qualcomm won spectrum in several circles. While the state-owned telcos, BSNL and MTNL, which had early access to BWA frequencies, are already rolling out WiMAX, other players have been less clear about their choices.
Reliance talked about LTE when it first acquired Infotel but is now trialling WiMAX and looks almost certain to use that standard at least for its first phase of deployment. Like operators elsewhere, it may keep its options open for LTE coexistence at a later stage, when TD-LTE becomes commercially viable. Other winners like Ikona and Augere will capitalize on the earlier availability of WiMAX.
This could boost the profile of WiMAX within ALU’s portfolio once again. Unlike Nokia Siemens, the company has never pulled away from the older standard and remains one of its top five suppliers, but it has put far greater emphasis recently on LTE, targeting its traditional cellco user base and FDD bands. However, it will be keen to leverage its expertise in WiMAX to compete for the huge Indian market and wrongfoot Huawei and ZTE, both of which are strongly positioned in the subcontinent and in WiMAX (but bear the brunt of the government’s sensitivities about security issues).
ALU’s president of 4G wireless networks told Wireless Week in a recent interview that he had recently met with seven “key customers” in India to discuss their 4G plans.
Meanwhile, the technology choice for Qualcomm and its two local partners - Global Holding and Tulip Telecom - is clearcut, but the firm still has to cross one hurdle. It needs to get government approval for its investments in three firms that will use the joint venture’s networks to offer services. These are three units of Wireless Broadband Services, focused on Haryana, Delhi and Kerala, the key areas where the Qualcomm JV has licenses.
Although the Department of Telecom allowed foreign companies to bid for spectrum, they can only own 74% of the bidding company (Qualcomm sold 13% apiece to Tulip and GHC) - and can only offer services through locally registered firms. Any foreign company that owns more than 49% in a venture must get separate approval from India’s foreign investment promotion board.
Looking to the horizon - 4G voice solutions
By Andrew Mitchell
Over 70 wireless operators from around the globe have now announced plans to and even begun to deploy 4G networks. For users the promises offered by 4G are most often viewed in the context of the mobile Internet - abundant and cost-effective bandwidth that enables compelling mobile applications and high quality multimedia experiences. Perhaps not always top of mind for users, the need for voice solutions has not diminished and meeting that need is something that a number of members of the 4G wireless ecosystem are aggressively pursuing.
4G Trends contacted Kevin Mitchell Director, Solutions Marketing - Mobile at Acme Packet to gain some insights and his opinions on this critical aspect of 4G wireless. Kevin obliged me with the following brief and informative interview.
Q: Data dongles and devices for LTE networks are with us today yet standards, let alone devices to deliver LTE voice have yet to emerge. What are the approaches currently being considered to deliver voice over an all-IP 4G network?
Until last year, the concern of how voice and messaging service parity would be achieved with LTE was overshadowed by a host of other issues in getting LTE to market. This is not a trivial topic as two-thirds to three-quarters of all mobile service revenue today comes from voice and messaging services. A standard is essential for LTE uptake, drawing from history where as a consistent approach to implementing voice services across service providers helped GSM take-off and become the most widely deployed mobile technology.
The good news is that a standard for voice does exist and it’s been around for a while: IP Multimedia Subsystem (IMS). Now on release 9, it’s a SIP-based next generation core service for not just voice, but multimedia communications as well. The GSM Association’s Voice over LTE (VoLTE) initiative is currently engaged in selecting a sub-set of the IMS standards to deliver end-to-end voice and SMS for LTE devices, including defining roaming and interconnect interfaces.
There are three other alternatives offered up by various industry players. Voice over LTE Generic Access (VoLGA) reuses legacy voice infrastructure and UMA/GAN technology. Today, T-Mobile remains the lone service provider supporter for VoLGA. Other service providers using UMA for FMC are noticeably absent. Circuit-switched fallback (CSFB), which uses some initial signaling over the LTE RAN and then actually “falls back” to the 2G/3G TDM RAN to establish calls, is another solution. The third option is a hybrid of SIP and legacy that leverages existing circuit MSCs, but uses SIP to deliver the voice to devices connected via LTE RANs or any fixed or mobile IP broadband access network.
But back to VoLTE, it’s not merely about service parity with legacy mobile telephony, but also about access convergence and multimedia communications that makes IMS compelling.
Also, a growing number of WiMAX operators offer residential or business voice today - it’s predominately a fixed offering, that is VoIP delivered over a broadband alternative to DSL, FTTx or cable.
Q: What about existing technology solutions such as Skype or Google Talk - are these viable alternatives?
Yes, sure they are alternatives, but with trade-offs, including best-effort “roll of the dice” service quality lacking emergency service support, lawful intercept and fully staffed customer support. Over-the-top communication providers are indeed a competitive threat and increasingly so with the bandwidth increases in 3G technologies and LTE. Today mobile service providers face a new challenge in avoiding becoming a dumb pipe to the richness of the Internet. This is the same challenge that fixed line operators have faced since the advent of broadband. However, I don’t think over-the-top is a mass market replacement for mobile service provider offered voice and messaging services.
As mobile service providers own access infrastructure and the EPC along with IMS/SIP-based services core, they can differentiate themselves from OTP ASPs with the likes of wideband voice codecs for HD voice, interactive video with QoS and Rich Communication Suite services such as integrated presence and diverse messaging.
There is room too for a federated model providing value and revenue all along the chain. The federation is between over-the-top providers and the mobile broadband providers where the strengths of each provider can be leveraged-innovation from the web and quality, security and billability from mobile service providers. There are tentative moves in this direction and peaks at this model with the likes of Verizon and Skype.
Q: With LTE networks already rolling out, what solutions can (or are) operators likely to employ until clear standards emerge?
As outlined earlier, there are 4 approaches available today or near future-VoLTE using IMS as defined by the GSMA IR.92 document is imminent. The limited geographic availability and form factor of LTE doesn’t demand voice at this moment (but soon). But LTE providers can offer voice softclients on laptops at the outset (and I think they should to minimize or prevent subscriber triple/quadruple play revenue loss from over-the-top). They can do this with MSC VoIP, VoLGA or VoLTE.
Q: What are the implications to 3G operators? Is there going to be a clear migration path to 4G voice and what would that look like?
Mobile service providers have not adopted much SIP or IMS today. However, nothing precludes them from doing so, and initiatives like Rich Communication Suite may incent adoption of SIP / IMS ahead prior to LTE deployment. The area with the largest SIP adoption is the core and IP interconnect borders, which does lay nice groundwork for migration to the 3G and 4G access networks. LTE is on the 5-year horizon for some 3G service providers, so they have time to roll-out IMS ahead of their 4G deployment.
VoLGA and VoLTE both offer migration, but only VoLTE offers services beyond voice and messaging of yesteryear. MSC VoIP is an interim step as well, where some investment is preserved for both voice-the MSCs at the outset-and the multimedia-SIP infrastructure for the years ahead.
Q: When can consumers expect to see the first 4G voice capable device?
For basic voice: today as a laptop with a LTE data card is a voice capable device. There will be LTE phones early 2011, but I suspect they will be dual-radio phones with voice from UMTS/CDMA and LTE being the primary data network (with 3G for non-LTE markets for data coverage). For a truly mobile LTE voice and multimedia communications device, I’d venture to say very likely in 2012. Although, once the LTE radio is available on a phone, anyone could make a call using over-the-top clients.
Tablets will come to Verizon LTE soon, and FiOS tablet could be ‘home-changer’
By Caroline Gabriel
While the iPad may be scoring consumer points by supporting almost every imaginable mobile behaviour, many other tablets will gain acceptance by enabling a specific function and delivering an optimized experience. Cisco has showed the way with its videoconferencing and home energy management tablets, and of course, Amazon with its Kindle e-reader. One of the most interesting examples of the trend emerged a couple of weeks ago when reports surfaced of a planned Motorola tablet, co-developed with Verizon to support its FiOS IPTV service, and more details have now come out.
A tablet for the TV could become something truly ‘home changing’. For Motorola the holy grail would have to be DLNA (Digital Living Network Alliance). This is a six-year old, highly labored industry grouping, begun by 18 of the largest constituents in the digital home and now swelled to 26 promoter members, from chipmakers to content producers to consumer electronics vendors to pay-TV operators.
This group has long established use cases for how content can move around a home. Those use cases are quite advanced and consumers are only now just beginning to see the fruits of fairly boring, but necessary, standards work and plugfests, which are the staple diet of this organization. In May, Nokia, Samsung, LG, Motorola and Sony Ericsson all obtained DLNA certification for some of their devices, though curiously this has hardly made it into the news pages at all - probably because those devices are mostly not launched.
Just last week the Alliance said that the number of DLNA certified Blu-ray players had nearly doubled to 105. And before phones, or tablets, can interact with TVs in the home, the core devices - Blu-ray players, TV sets and DVRs - have to make that leap themselves.
DLNA is all about accessing any content, mostly unprotected content, on any device in the home. We say mostly unprotected, because the DLNA has never really got to grips with DRM (digital rights management) and it has no strategy on interoperable DRM.
Until now it has been more interested in defining format types for, say, printers from mobile devices, or defining device classes, or adding support for H.264 video. But there are two ways it can deal with protected content. The first is if a content operator also offers a second device and supplies transparent DRM - this is something that Verizon could easily do, offering DRM keys to portable devices from FiOS, such as to this proposed Motorola tablet.
The other approach, and one we see very clearly on the roadmap of DLNA, is the idea of supporting streaming protocols such as RTP and offering link protection. That way streaming protection such as DCTP can prevent some level of piracy when the content is on the way to another device, and content can simply be streamed to a second device, with no copy being kept.
What DLNA makes possible is the ability to locate content anywhere in the DLNA universe in your home, so on a DVR, a camera, a PC, phone or home server, and shift it to be streamed on ANY of the other devices. This can also work with music and photos.
DLNA breaks all the devices into storage, controllers and rendering devices and makes them plug and play together. So you can watch a TV program on TV, decide to switch it to another portable device, and send the sound to the speakers on your laptop. What the DLNA had to deal with early on was the issue of control and giving control power to other devices. In this way your TV remote can increase the volume on the bedroom TV, where you just sent the rest of your TV program. Now it is embracing the streamed video world, not just one that relies on storing new copies of video files.
So what could a video tablet do? It could flip to the electronic programming guide of a pay-TV service, and then select a channel. It might send the program on that channel to a DVR or just pause it while you go upstairs to another room, and then let you trigger play. You might use the tablet to look up something on the internet, while watching another channel. It might deliver the sound to the channel you’re watching to your earbuds, or to your laptop, which has a better set of earbuds. It might let you control your Blu-ray player, and stream the video to your tablet, notebook or a TV.
All of that you get from DLNA certification. So that’s pretty much without reinventing anything, just putting tried and tested control features, and tried and tested stream and file types, on a new device. Every one of Nokia, Motorola, Samsung, LG and Sony Ericsson has already proved to the DLNA that they have code which can do all that, so it just needs porting to a new device, which will no doubt run Android, the same operating system that Motorola will have probably first delivered it on.
It’s the other features of the Motorola tablet device which are hardest to design. Well for sure it will play Android Market apps, so that’s games, streaming video services over Wi-Fi in your home and at work as well as some VoIP-style voice capabilities. Already this device is sounding cool to take out of the home, despite its core function being one that is attached to the pay-TV operator.
If you add a TV Everywhere service from FiOS, so that its pay-TV programming can be viewed anywhere over the internet for paying subscribers, including on this tablet, then it is a pretty neat device and probably capable of offering a better video serviced than Apple and iTunes. If that happens, Motorola will suddenly have improved leverage in the set-top world and also have a new product to ship to all of its existing IPTV operators. It might even be able to make it work with cable boxes too, though that comes with a different set of problems.
We have for some time talked about iTunes TV and Apple’s desire to offer TV channels on a monthly pay basis, to rival cable and other pay TV operations. Because it has not yet emerged, and potentially this is because Apple cannot get the kinds of content licenses that it needs, it may well put both Apple, as well as Google TV, at a huge disadvantage in home tablets. Tablets without content are just heavy Gameboys or MIDs.
But we know that Verizon FiOS has content galore if Motorola first targets the digital home at Verizon with tablet number one, and then frees up other tablets to work outside the home with cellular services, it could mount a viable challenge to the iPad outside of the AT&T cellular customer base - which is about two-thirds of the US. Of course people can buy an iPad without an AT&T data contract, either cellular or Wi-Fi, but the number that prefer to be sure that their data is paid for, before they start using a tablet is likely to be a lot higher than those who have their own Wi-Fi service.
The first Motorola tablet will be out during 2010, which is likely to make it one of the first that support Adobe Flash, and it will be thinner and lighter than the iPad, and offer two cameras, one to take pics and the other for video conferencing. All in all if Motorola has the same kind of success or better than it had with the Droid and Droid X, then it will seriously be in the tablet game through America’s second largest telco.
Whatever the future shape of the Motorola tablet, its reported plans highlight how important carrier support remains to the success of media devices - and also how intensely Verizon is relying on broadening its range of gadgets to boost its services and customer loyalty. This is true of FiOS, and also of its forthcoming LTE wireless data offerings. Much of the revenue growth on new networks will rely on non-traditional mobile devices, and the apps and content services for which they are optimized. So tablets, personal hotspots and media players could lure new users to 4G systems, rather than phones, a factor Clearwire has already embraced for its WiMAX offering. Now Verizon Wireless expects to launch tablets on its upcoming LTE network before it releases smartphones.
John Killian, CFO of co-parent Verizon Communications, said the cellco believes it will be able to charge a premium for the speed and quality of LTE services, especially when these are driving new applications or usage patterns. “Customers will pay for quality and premium service and premium speed,” he said. Verizon has previously hinted that it would use LTE as the trigger to introduce tiered data pricing, making it acceptable to consumers with improved quality of service and new content options.
He also said that Verizon would release tablets in the “not too distant future”, meaning early next year, while smartphones would arrive in mid-2011. The timeline, a reversal of the 3G pattern, will be partly down to the complexities of developing and testing phones, which will have to be multimode for CDMA roaming - not essential for data-only devices like tablets, dongles and hotspots, which will be usable just within areas of LTE coverage. It also demonstrates the importance of eye-catching gadgets supporting new services to encourage early 4G uptake.
On a webcast, Killian said Android would remain the centrepiece of its smartphone strategy, despite the rising expectation that Verizon will get its own iPhone. “I definitely think in terms of the Droid franchise we’re going to continue to be unique,” he said, adding, in response to a question about Apple: “All of our assumptions about our business is we’re going to have devices that act and perform just like the iPhone does. If the iPhone became available to us under the right terms, we would be interested in that.”
Russia shows how LTE build-out patterns will differ from those of 3G
By Caroline Gabriel
Over the past few years, the wireless vendors’ hopes have been firmly focused on the remaining major unbuilt 3G markets, notably China and India. But with Chinese roll-out slowing now, and India’s marred by delays, there is a new source of potential revenue in LTE. Thought this will be slow to gather steam, there are already signs that purchasing will follow a very different pattern to those of 3G.
One reason is that many governments and carriers will regard 4G as a fixed as well as mobile broadband platform. This means it will be deployed more quickly than 3G was, in many cases, in rural areas and emerging economies, because of the urgent need for high speed access. In this scenario, 4G - whether LTE or WiMAX - does not have to be a ‘network in search of an application’ as 3G often was.
The other reason is that some countries will aim to deploy 4G quickly in order to minimize investment in 3G, where this has been limited to date, and to kickstart mobile, broadband and web services expansion via the more cost efficient IP standards. In some countries, mainly in sub-Saharan Africa, 3G may be bypassed altogether, and in others, like Brazil, operators are discussing confining 3G to a few areas and using non-deployed spectrum elsewhere for 4G instead. This would be particularly practical where 3G investments have been fairly recent and used software upgradeable base stations, and where regulators are technology neutral.
One of the most interesting countries in terms of the 4G pattern will be Russia. In the top five growth markets for wireless, Russia’s 3G expansion has been slow and bureaucratic, but in 4G it is moving far more quickly as the momentum behind broadband and web services rises. It already has several WiMAX operators, one of which, Scartel/Yota, is also trialling LTE. The early WiMAX spectrum auction opened the door to some smaller players and now the three main cellcos - MTS, VimpelCom and Megafon - may face another wave of new competition as Russia gears up for its main tranche of 4G auctions.
Russia is facing a dilemma that has affected the spectrum policies of many economies - whether to let experienced operators expand wireless availability, or encourage new competition. The main cellcos are dismayed at president Dmitry Medvedev’s belief that new spectrum should be opened up to new entrants so that 4G services are spread more widely than 3G between different operators and business models. In particular, they are keeping a wary eye on the rising mobile ambitions of landline incumbent Rostelecom which gained licenses in the first tranche of 4G auctions. A second wave of auctions around 2.5GHz will be held later this year.
According to Russian business newspaper Vedomosti, Medvedev has told the minister of communications, Igor Shchegolev, to draw up plans to distribute ‘4G’ licenses on a broad basis. This could speed up development of new services in Russia, which is one of the world’s largest potential markets for wireless and broadband, but whose development has often been delayed by bureaucracy. In particular, localized carriers could be encouraged to bring access to rural areas, which are vast but sparsely populated in the highly urbanized country. Medvedev also hopes smaller players would introduce innovative web offerings and support government and industrial applications.
However, as the US and other countries have discovered in the past, new operators can be financially unstable and inexperienced, raising the risk that spectrum goes unused or new services fail.
Of course, Medvedev’s proposals are encountering fierce opposition from the big three. The newspaper reports that they have all written letters to Shchegolev and prime minister Vladimir Putin arguing that only they have the cash and expertise to handle the roll-out of LTE in Russia. This will not stop them lobbying for state support in the financing of LTE, though. Medvedev argues that national LTE will cost far more than 3G because he wants it deployed as much as 10 times faster than the sluggish pace of 3G, in order to support fixed as well as mobile broadband. This may require state financial support, which in turn will increase his negotiating power over the cellcos. Last week Vedomosti reported that Osnova Telekom, 25% owned by Russia’s Defense Ministry, is willing to help build the LTE system.
The Russian press says that potential new spectrum bidders are already making themselves known. They include Rusenergotelekom, a new firm formed last October and controlled by energy investor Grigory Berezkin, who also owns a blocking stake in national landline operator Rostelecom. This company is getting increasingly active in wireless services and has said it will increase its influence and revenue streams by supporting new mobile entrants in order to boost competition.
Rostelecom has also invested directly in spectrum. It was recently awarded 30MHz of spectrum in the 2.3GHz to 2.4GHz band, covering one-third of the country’s population, and plans to launch LTE test networks in Penza by the end of August. The carrier, an arm of state-owned conglomerate Svyazinvest, won licenses in 38 of the 40 Russian regions covered by the tender, while fellow Svyazinvest subsidiary Sibirtelecom got the license for the Tomsk area and local operator Vainakh Telecom won in Chechnya. The operators have 18 months to build and launch networks and must adopt Russian-made equipment. However, the largest cities, Moscow and St Petersburg, were excluded from the tender to give the big three cellcos - MTS, Vimpelcom and MegaFon - more time to get return on their recent investments in 3G.
Svyazinvest is currently undergoing a reorganization, combining Rostelecom with its local divisions nationwide to provide integrated fixed, broadband and mobile services, but the group has less power in the cellular than the fixed market. It has regional cellcos like Sibirtelecom, Uralsvyazinform and SkyLink, but has been rumored to be considering a bid for one of the big three, or even a start-up like Scartel/Yota, which has 2.3GHz spectrum in the main cities. Svyazinvest’s wins of new 4G spectrum make it the fourth largest cellco in terms of licensed area, overtaking Tele2. It plans an IPO in April 2011.
Another hallmark of Russian 4G is the way that its operators are using their subsidiaries in neighboring, former Soviet states to test LTE at a very early stage, with less cost and risk than building out in key Russian cities. So an unlikely nation, Uzbekistan in central Asia, has become the world’s first to gain LTE networks from two different operators - TeliaSonera’s UCell and Russian-based MTS. Both are primarily serving as testbeds for the cellcos’ larger owners, which can trial LTE in tough terrain but without the significant expense and risk of rolling out at such an early stage in their key territories. MTS recently switched on its LTE network in capital Tashkent and has plans for the main Russian cities once it validates the technology and acquires spectrum, probably later this year.
Meanwhile, UCell is a subsidiary of TeliaSonera, which was the world’s first operator to launch commercial LTE networks in Sweden and Norway, and is looking to expand the technology around its many bases in the Nordic, east European and central Asian regions. The two providers have a combined 78% market share in Uzbekistan.
UCell has turned to ZTE for its equipment, favouring the Chinese firm’s software defined base station architecture, while MTS is using kit from rival Huawei. ZTE now claims seven commercial or pre-commercial LTE networks and 50 trials while Huawei has been part of several high profile early awards, including Telia’s in Norway.
Uzbekistan may be a testing ground rather than a strategic market for its carriers, but it does illustrate a key trend - the squeezing of the upgrade cycle between 3G and 4G in emerging nations. In some areas, 3G may be largely bypassed altogether as operators chase the better economics and spectral efficiency of the new IP-based systems, and their superior ability to support fixed broadband and packet data services as well as mobile offerings.
My 51M Beats Your 100M
By Chris Nicoll
By Chris Nicoll, Distinguished Research Fellow, Yankee Group
We in the prognosticating industry (if there really is such a thing) like to forecast the beginning and end of things. And we are rarely correct. GSM didn’t commoditize mobile services to the point where there were not competing players offering differentiated services. Those of us in the North American market should probably have taken note. But we have several of our own examples to choose from too. The iPhone didn’t doom Verizon Wireless or Sprint or even T-Mobile into obscurity (nor did it kill off regional players like Metro PCS and Cellular South who are doing just fine, thank you) just as Verizon’s ability to offer a fixed/mobile bundle hasn’t doomed the other players. The question is not: Why didn’t it doom the other players; the question is: Why did we think it would?
So when the LTE networks show up later this year, is that the end of WiMAX in the US? I’m not a huge fan of how the Clearwire WiMAX network has been rolled out. I tend to think that when you are giving such a long runway to gain market advantage, you should probably sew up the major markets before competitors come to play. I don’t think there is much advantage to playing in the smaller markets but not in the major ones. Maybe I’m wrong. But I don’t think so.
But despite the Clear/Sprint 4G network currently covering only approximately 51M of the US population, when Verizon is expecting to cover over 100M by the end of this year, I don’t think we can sound the death knell for Clear either. Yes, I know, there are rumblings about Clear moving to LTE, but ahead of the Harbinger network Clear is starting to offer wholesale services (can you say Best Buy?) showing a bit of strategy flexibility. Good move. And I think the facts will show that in two or three year’s time, there are folks who just like the Clear service, brand and are loyal customers. Seriously, we can’t really take that for granted. Toyota knows this all too well. It took its lumps, but has bounced back handsomely. Clear may end up shifting technologies to LTE, but will there be a Clear in two or three years? Yeah I think so.
What is clear (no pun intended) is that there is not ONE market all of these operators are dipping into. There are MANY (and I’m not even going to try and spell them out right now) markets, with differing price points, service needs and even device requirements. Think not? I point again at the Sprint Pre-Paid services and those are masterfully aligned with different market requirements: Virgin Mobile for data heavy users, Boost for voice users, Assurance for low-income families and is supported by state programs, and Common Cents Mobile for the budget conscious. Not to mention Sprint’s Post-Paid users.
Just as there is no one killer app, there is not a golden technology bullet solving all problems and no one device to fit all users. There is also not one best network or one user to fit all markets. We should all stop talking like there is one.
The US race to 4G accelerates as Verizon launch looms
By Caroline Gabriel
The US mobile broadband market is becoming an Olympic-class race, in words as well as actions. Clearwire continues to expand its network and has an important new deal with Best Buy, but has to fight hard to maintain its headstart over Verizon’s LTE roll-out, as the cellco reportedly ups the ante itself. Meanwhile, Clearwire’s wholesale model will get a new competitor with the LightSquared LTE venture, assuming that delivers real results in its mobile satellite spectrum.
According to the IntoMobile blog, Verizon plans to cover more POPs with its LTE network this year than previously thought. Citing unnamed sources, the researchers said the carrier has been cautious about its public roll-out targets and actually aims to cover 115m to 120m POPs, rather than 100m, by year end, with commercial services planned around Atlanta and Dallas/Fort Worth as well as eastern Massachusetts, in addition to the announced launch bases of Seattle and Boston. Verizon did not comment, but has previously said it would cover 50-60 markets by early 2012 and fill out its 3G footprint by the end of 2013.
Meanwhile, Clearwire can be judged by real results rather than promises, and this month it announced the availability of its WiMAX services in five new cities, raising its coverage to 49 markets and 56m POPs. The new markets are mainly midrange ones already covered by Clearwire’s legacy broadband service - Jacksonville, Florida; Wilmington, Delaware; Stockton and Modesto, California; and Grand Rapids, Michigan. But 56m is less than half of the target of 120m by year end - a target that Verizon Wireless is chasing.
The real impact will depend on where those POPs are and how receptive they are to the new services. One analyst firm, TownHall Research, believes Clearwire has fallen behind in coverage terms but is getting higher than expected penetration and uptake in the markets where it does go live. Also, Clearwire may well light up some major metros in the last quarter of the year, adding significantly to its POPs total.
With mounting bills, Clearwire reported a widening second quarter loss. Uptake of its services is better than most predicted, but at this early stage, investment in network expansion is bound to outrun revenue growth. The loss was $126m or 61 cents per share, compared to last year’s $73m. The results included a loss of nine cents per share for inventory adjustments. Excluding that item, the loss would have been 52 cents per share, in line with analyst expectations. Revenue rose 93% to $122.5m, behind forecasts of $132m.
Clearwire added a net 722,000 subscribers in the quarter, to end at 1.7m. Its base received a significant boost from the launch of the HTC EVO, the US’ first WiMAX capable smartphone, by Sprint, which runs its ‘Sprint 4G’ WiMAX/CDMA service on Clearwire’s network (and holds the largest stake in the start-up). The success of the EVO is good for Sprint but has a more limited effect on Clearwire’s own financials because many subscribers have taken the HTC superphone even in areas with no WiMAX coverage. The company receives only a “nominal” fee for them, it said.
The WiMAX carrier also followed through on pledges to keep its technology options open, and is to start testing LTE, which it could potentially use in future for new markets, or alongside WiMAX. Any switch would be unlikely to happen until 2012 or later, once the TDD version of LTE has commercial equipment and an ecosystem. Clearwire has only TDD spectrum, although it said it would test an FDD implementation with paired 20MHz channels since it has so much spectrum capacity that it could deploy 40MHz per carrier in many markets.
Clearwire said it would test LTE in its 2.5GHz spectrum using Huawei and Samsung gear. CEO Bill Morrow said the firm was “by no means committing” to deploy commercial LTE in future but it aims to demonstrate to backers that it has flexibility. In particular, it wants to prove that the two technologies can coexist, so that an LTE strategy would not entail a full rip-out of current networks.
“As we have consistently stated we remain technology agnostic,” Morrow said on the Q2 earnings call. “If we elect to add LTE to our network at some point we could do so using existing core infrastructure and backhaul.”
LightSquared has an even tougher hill to climb to hit the targets for its LTE network in satellite bands. Philip Falcone, the billionaire head of LightSquared’s backer Harbinger Capital, is said to be in advanced talks to lease this spectrum to third parties, which would sweeten the business case (and an approach Clearwire may also adopt) and CEO Sanjiv Ahuja says it has already reached agreements with device makers.
“We are talking to most of the wireless players,” Ahuja said in an interview last week (though AT&T and Verizon are barred from using the new network by the FCC). “We want to serve every player in this industry, from the largest to the smallest.” Like Clearwire, the wholesale model will target wireless, wireline and cable providers, as well as device makers and game manufacturers. Leasing capacity to them before the network is built out would add a nearer term revenue stream, but many analysts expect LightSquared to sell out to a major carrier, or at least lure one into a joint venture like Sprint’s with Clearwire. RBC Capital Markets’ Jonathan Atkin commented to Bloomberg: “To start out from scratch and build out a network from the ground up is highly speculative. An established company has the resources and manpower to really make this work on a national scale.”
Initial trials of the actual wholesale network will take place in early 2011 in Baltimore, Phoenix, Las Vegas and Denver, Ahuja said. And LightSquared has signed its first public partner, though not a major operator, but a vendor focused on the burgeoning market for the smart grid.
Airspan Networks, which made its name in broadband wireless access and WiMAX infrastructure, has signed an exclusive deal to market spectrum to utilities on behalf of LightSquared. Airspan will market the 1.4GHz wireless backhaul solution, including spectrum, equipment and services for smart grid applications in the electric, gas and water utility sectors in the US. It will manage the frequencies and potentially the networks, and will help utilities to build optimized proprietary grid management networks.
National public safety organizations seek support to oppose ‘D’ Block auction
By Andrew Mitchell
‘D’ Block - that valuable, yet contentious 10 MHz slice of 700 MHz spectrum, continues to be a hot topic for both operators and a number of public safety organizations across the US. Unless things change, the FCC plans to once again put the ‘D’ Block up on the auction block sometime in the first half of 2011. Public safety, along with state and government organizations are hoping to change that though.
Spectrum at 700 MHz was freed just over a year ago, at the completion of the digital television (DTV) mandate in the US. 700 MHz is a particularly valuable allocation because it provides better propagation characteristics - permitting coverage over greater distances for the same signal power, when compared to higher frequencies. So why wouldn’t operators be hungry to stake their claim of 700 MHz for an LTE or 4G deployment?
Originally the ‘D’ Block spectrum was intended to be sold in Auction 73, which ended in March 2009. What was unique about ‘D’ Block bids was the requirement for bidders to enter into a public-private partnership in which deployments would grant priority of access to public safety agencies and first responders. But Auction 73 bidders failed to meet the FCC’s reserve bid of $1.3 billion for ‘D’ Block, with many hinting at concerns of unethical practices that occurred during the process. In the end, ‘D’ Block failed to sell and now there’s growing support to “block” the FCC from putting it back on the auction block in 2011.
The Public Safety Alliance (PSA), a partnership of leading public safety organizations, is actively looking to the wireless industry to support ‘D’ Block allocation to public safety. ‘D’ Block plans suggested that carriers would grant public safety access to the spectrum in an emergency but what public safety organizations envision is control of that spectrum and federal funding to help build out and maintain a nationwide broadband network for public safety. H.R. 5081, The Broadband for First Responders Act and S. 3625, The First Responders Protection Act are identified as being “critical first steps” in passing legislation to support this vision. So what would a wireless operator’s stake be in such a vision, especially since public safety organizations say that they don’t want to be constrained by the costs of commercial networks or contention for access to them. One outcome might be to build, maintain or even operate the network on behalf of public safety.
So how do operators feel about PSA’s position? Yucel Ors, Director of Legislative Affairs at APCO (Association of Public-Safety Communications Officials) International says that they “have support from the wireless industry, from operators and manufacturers.” Notable on that list today are AT&T and Verizon, along with Alcatel-Lucent and Motorola, a long-tenured provider of private mobile solutions to public safety. What is interesting however is that both supporting operators were successful in acquiring rights to 700 MHz in Auction 73, with Verizon squeezing out Google, to land a large chunk of the ‘C’ Block and AT&T securing the ‘B’ Block.
So why is it that AT&T and Verizon would support PSA’s position? Is it because they believe a nationwide broadband network for public safety is in the interests of the greater good? Perhaps it’s because they could have a role in building, maintaining or operating such a network? Or is it because if the ‘D’ Block auction is blocked, that AT&T and Verizon competitors or potential competitors are the ones likely to be blocked from access to this highly valuable spectrum? We’ll watch to see if the PSA’s list of supporting operators grows.
4G World® 2010 Conference Program Released
By Andrew Mitchell
Official program brochure outlines 4G wireless industry’s premier event
October 18 to 21 at McCormick Place, Chicago
BOSTON - August 3, 2010 - The Events and Media Division of Yankee Group announced today the publication of the official conference brochure for 4G World 2010. With visionary keynotes and more than 175 speakers in 80+ sessions, 4G World 2010 is the 4G industry’s “must attend” event of the year. The expanded and comprehensive four-day conference program also features participation from more than 250 sponsors and exhibitors and more than 10,000 attendees. The event website is www.4GWorld.com.
According to Eliot Weinman, conference chair and president, Events Division of Yankee Group, “2010 has been a watershed year for the 4G wireless industry. Around the world there are more than 110 operators in 48 countries that are investing in LTE networks, and there are more than 500 WiMAX networks deployed in over 145 countries. The global impact of 4G and the rapid expansion of the mobile Internet will change the face of communications and computing for billions of users around the globe. At 4G World 2010 wireless industry business and thought leaders will share their insights and predictions for 4G wireless and the mobile Internet.”
Highlighted keynote speakers include:
- Eran Gorev, President and CEO, Alvarion
- Glenn Lurie, President, Emerging Devices, AT&T
- Ashraf M. Dahod, SVP and GM, Mobile Internet Technology Group, Cisco
- William Morrow, CEO, Clearwire
- Mike Lanman, President - Enterprise and Government Markets, Verizon Wireless
- Håkan Eriksson, Senior VP, CTO, Ericsson
- Matt Bross, Chief Technology Officer, Vice Chairman, Huawei USA
- Roger D. Linquist, Chairman, President & CEO, MetroPCS
- Bruce Brda, Senior VP, GM Networks, Motorola
- Michael Matthews, Head of Strategy and Business Development, Nokia Siemens Networks
- Kim, EVP and GM, Telecommunication Systems Business, Samsung
- Bob Azzi, Senior VP, Network, Sprint
4G World 2010 also welcomes the “who’s who” of the world of 4G, including key global industry sponsors, associations, media, research and training organizations. Program partners include TM Forum, Award Solutions, Light Reading, WCAI, Femto Forum, Forbes Magazine, 3G Americas, Fierce Markets, ETSI, GS1, IEEE, Senza Fili, Maravedis Research, RCR Wireless and Rethink Research. Major corporate sponsors of 4G World 2010 include Ericsson, Nokia Siemens, Alcatel Lucent, AT&T, Alvarion, Sprint, Clearwire, Motorola, Cisco, Juniper Networks, Huawei, Qualcomm and Samsung.
Attendees of 4G World will have access to a broad and comprehensive program of critical current and forward looking business, technology and regulatory topics. Sessions will examine Backhaul, Core Convergence, 4G Operator Deployments and Business Models, 4G Technology Roadmap, Femtocells, 4G Operational Transformation Strategies, Vertical Industry Apps and M2M, Future of the Mobile Web, Evolution of m-Commerce, LTE/WiMAX, Mobile Internet Innovations and more.
With a three-day expo, 4G World 2010 is poised to be the largest exposition ever assembled focused on the 4G revolution.
Additional special events at 4G World 2010’s expo include press functions, the 4G World Solutions Theater, RCR 4G Innovator Awards Ceremony, RCR Buzz Zone, Power Breakfasts and much more. The complete program brochure can be downloaded at http://www.4gworld.com/2010/email/images/4gw-brochure-final-web.pdf.
About 4G World
4G World, is the first and only conference and expo covering the entire ecosystem of next-generation technologies that enable the mobile Internet revolution, including mobile network infrastructure, advanced devices, applications, and content. Drawing 10,000 attendees and 250 sponsors and exhibitors from across the entire 4G wireless, mobile broadband, and mobile internet ecosystem, 4G World is the premier 4G business transformation event, where the entire industry gathers to chart its future direction. The event website is www.4GWorld.com
Contact:
Kate Walsh
Sr. Director of Marketing
Yankee Group Events and Media
kwalsh@yankeegroup.com
Reliance Infotel to choose WiMAX in India after all
By Caroline Gabriel
When the Indian BWA spectrum auctions concluded earlier this year, it seemed that the 2.3 GHz TDD band - once considered a clear run for WiMAX - would actually be split between that technology and TD-LTE. While state-owned telcos BSNL and MTNL are already deploying WiMAX in their 2.3 GHz spectrum, the privately held winners were more divided. The only one of these players to get licenses nationwide was Infotel, which was quickly snapped up by Indian conglomerate Reliance Industries (RIL). The firm implied that it would choose LTE for its new frequencies, even though Infotel had previously been committed to WiMAX, but now the firm appears to have opted for the more readily available technology after all, in the interests of early market impact
The other BWA victors only gained licenses in selected circles or operating regions. Qualcomm won in four circles and will recruit local partners to create a foothold for its favoured platform, TD-LTE. However, equipment will not be commercially available at prices to suit the Indian market for at least a year so these licenses look set to stay dormant for the time being. Other winners were Aircel, in eight circles, Bharti Airtel in four, Tikona in five and Augere in one. Tikona and Augere are committed to WiMAX while the two cellcos are undecided as yet.
Like RIL, they will face the choice of a technology that is available now, with a growing ecosystem driving down prices; and one that involves a hiatus period but is more closely integrated into the broader LTE market, promising possible economies and synergies in future when operators have deployed LTE widely in FDD spectrum. This dilemma explains the growing interest in software defined base stations that make it simpler for carriers to support both technologies, coexisting in different markets and business models, or with the flexibility to migrate from one to the other if conditions demand.
This is likely to have been one factor influencing RIL, which knows it needs to deploy quickly to meet India’s desperate shortage of broadband and wireless capacity and to steal a march on rivals. When it acquired Infotel, it referred specifically to LTE, even though its new ISP arm had been trialling WiMAX and planning to use it if it won licenses. But now it is taking the more pragmatic route and has begun its own WiMAX trials this month, according to company sources, which say the firm has installed five WiMAX base stations, testing kit from Alvarion and Samsung and working on interoperability.
RIL’s decision may be the first crack in the armor of TD-LTE, showing that the technology is not as close to market readiness as its supporters suggest. The operator gets a headstart in 4G and an improved bargaining position - buying affordable WiMAX equipment now and setting the benchmark for LTE equipment prices. Even if it introduces FD-LTE or even TD-LTE in future, there will be coexistence for at least 4-5 years and possibly permanently.
Having re-entered the telecoms space for the first time since it divested its mobile arm, now Reliance Communications, RIL is expected to form closer ties with that company. RCom also has significant WiMAX activities, which fit into a growing pattern for operators to harness the IP technology, and the TDD spectrum it targets, to build international power bases at relatively low cost. This spectrum is often cheaper than cellular focused FDD bands, and provides a lower cost, lower profile route into new markets than big ticket expansion programs like France Telecom’s in Africa. Even this roadmap, which relies heavily on acquiring mobile operators or licenses, is also supplemented heavily by investment in WiMAX players and spectrum. Others, like RCom, Orange spin-out Augere, ChinaTel and even Clearwire are focusing entirely on Clearwire and on the TDD bands, banking on an explosion of usage and value in unpaired TDD because of its suitability for IP-based data applications.
Augere has funding from Orange and has launched networks in Pakistan, Bangladesh, Rwanda and Uganda, and has an Indian license in some circles. It is likely to form part of its investor’s broader program to establish its presence throughout Africa and south Asia.
Clearwire is cultivating partnerships in India, China and other parts of Asia and Latin America, and has spectrum in several European markets, and networks in parts of Spain and Denmark. This week, it announced that it had acquired a 7% stake in another WiMAX operator, Ireland’s Imagine Communications, for €5m. The US firm will transfer its own Irish network and customer base, and 400 cells sites, mainly around capital Dublin, to Imagine. Clearwire launched wireless broadband services in Ireland in 2005 and the Irish unit generated a pre-tax loss of €13.4m on sales of €8.3m in 2008. Imagine has launched its service in 15 towns around Ireland.
Meanwhile, US-based Chinatel Group, in partnership with CECT-Chinacomm Communications, owns exclusive rights to roll out WiMAX to the 29 largest cities in China - despite that country’s general preference for TD-LTE. It is mandated to cover the first 12 cities by June 2011 and has completed partial deployments in Beijing, Shanghai and Shenzhen. It has about $640m in funding and is also active in Peru.
As for RCom, the firm created a separate business unit, Reliance Globalcom, in 2008 to push into 50 markets by 2012, largely on the back of WiMAX and fiber investments. It aims to become a multinational operator in fixed and mobile services, taking its place among the new breed of global providers emerging from outside the traditional mobile economies, many of them looking to use WiMAX to support 4G-style and fixed broadband offerings.
