With LTE deployments gathering pace, is there any value left in upgrades such as Edge and HSPA?
With operators around the world, and particularly in the US, Japan, Sweden and Norway investing in LTE, earlier wireless data upgrades such as Edge and HSPA are starting to sound somewhat old fashioned.
But the reality of handset sales and use of data presents a different picture. While LTE and WiMAX may have a knack of grabbing the headlines, 3G remains the workhorse of the wireless data sector, and is likely to stay that way for some time.
While LTE will continue to be developed in 2010 with some operators trialing the technology, GSM standards will continue to dominate network rollouts and upgrades for some years, analysts say.
Indeed, 2010 is widely expected to be a year of “further LTE trials” but progress towards commercial services is likely to be slow, according to research from Informa.
The organisation said late last year that LTE commercial launches will slip to 2013 and even 2014. “Informa expects only a handful of cautious early forays from the likes of Verizon and NTT DoCoMo towards the end of the year. Mobile LTE commercial launches in GSM-only markets will slip back to 2013-2014 as HSPA+ comes into the market,” it said in a research note.
Similarly, ABI Research recently pointed out that much of the developing world is still rolling out GSM, GPRS, and EDGE infrastructure and mobile devices, while another researcher, In-Stat, said that LTE base stations are set to account for 20% of total base station deployments by 2013, while WCDMA will continue to be “the work horses of wireless data networks”.
Operators in the Middle East also appear to be keen to continue to improve their existing infrastructure, with a number of significant announcements from some of the region’s heavyweights in recent months.
For example, Qatar’s incumbent operator Qtel said in January that it was due to complete an upgrade to its HSDPA network in February, allowing it to offer mobile download speeds of up to 14.4Mbps. Bahrain’s Batelco, also unveiled an HSDPA broadband service capable of download speeds of up to 14.4 Mbps in 2009.
Many recent HSPA upgrades also have the advantage of offering operators the opportunity to upgrade to LTE as and when appropriate. This appears to be the case in the Middle East, with a report by UK-based firm Aircom indicating that operators in the Gulf will, on average, pay less to upgrade their networks to LTE than their counterparts in many Western markets.
Indeed, an average operator in the Gulf will have to spend $337 million in capital expenditure, which is considerably less than the bill that operators in more mature telecom markets such as the US and Europe, where legacy equipment will prove more costly to upgrade, the report said.
Julien Grivolas, principal analyst for mobile networks and technologies at Ovum says that while it is a given that LTE will be “the next big thing” the question now is about the starting point for the different operators to migrate to it.
“If it is a CDMA operator, for them the question is straightforward. They will have to invest in new hardware, so they know they will have to pay,” he says.
“Now the question is whether they are going to migrate straight to LTE or are they going to develop an interim network, HSPA+, and here we can see operators are looking at those different strategies.”
For example, Verizon plans to go straight from CDMA to LTE, while Bell Mobility and TELUS in Canada have decided to deploy an HSPA+ networks and then go to LTE, according to Grivolas.
“They used to use CDMA technologies, now they have introduced HSPA+ at 21Mbps alongside their CDMA EV-DO network and they are supposed to deploy LTE later on,” he says, referring to Bell Mobility and TELUS.
TeliaSonera was the first operator to commercially launch LTE services in Sweden and Norway, even if was mostly a customer friendly trial, he adds.
Australian incumbent Telstra decided to switch off its CDMA network, go to an HSPA network and eventually deploy LTE when it gets necessary spectrum or when it sees the capacity for it, Grivolas says.
“Now you have UMTS HSPA operators,” Grivolas says. “They have this technology and they are considering moving to LTE in the future. It will really depend on the marketing strategy but also on their network capability.
“If they need to replace everything to be able to replace HSPA evolution they may question whether it is a good thing to do. If they believe that at some stage they will need to invest a bit more again to have LTE working, they may adopt a ‘wait and see’ strategy, and go for LTE directly without the HSPA evolution path.”
AT&T in the US is an example of an operator that is taking a more measured approach. The operator is testing LTE and plans to start roll out the network in 2011. But it is also continuing to invest in its 3G wireless broadband networks to deliver increased speeds to its customers. This will give the added benefit of giving a broad, high speed network that LTE users will be able to fall back on when they move outside LTE coverage areas during the earlier stages of the LTE roll out, an AT&T company spokesman said.
Grivolas also points to Vodafone and Orange in Europe as operators that have invested in evolution UMTS/HSPA and are “clearly not in a rush to deploy LTE in Western Europe in selected markets.” However, he says that the type of choices that operators are making, and will make, vary greatly between different markets.
For Grivolas, it is important that operators are willing to take into account the competition in their own market. If they are going to face an aggressive operator that deploys LTE early, they may have to follow suit. “Maybe for marketing reasons, even if you have not invested in LTE so quickly, you may have to do it because your rival will be offering 100 mbps and you with HSPA+ will be limited 21 mbps for example,” he says.
Grivolas admits that in this scenario, end users might fail to grasp the difference between the two services. While they may lack the type of applications that make real use of LTE’s enormous capabilities, they are still likely to perceive LTE as a far superior service. “People will have the feeling that they will have much better services with LTE than HSPA. These are the things that need to be balanced,” he says.
Ihab Ghattas, assistant president, Huawei Technologies, Middle East region, is more bullish about the merits of bypassing upgrades in favour of moving straight to LTE. “I think for the time being LTE should be the target of most operators.” He says that gaps in high speed data networks are being filled “haphazardly by different technologies” around the world.
In this light, he says that LTE offers a common approach, as well as giving speeds that are in a different league from 3G upgrades. “The industry now is looking at LTE as more of a common approach for all the operators to become the latest technology.
There is also an economic case for moving to LTE more quickly. “Once LTE is available, it is really not economical to look at any steps but LTE – it is much cheaper and it uses the frequency more efficiently and it reduces the total cost of ownership quite drastically.
“LTE can give you speeds of about 150 mbps on the downlink and this is really what operators should be looking for.”
Despite the growing list of operators that are unveiling plans for 4G networks, many operators are also investing in technologies that help bolster their existing data networks, from GPRS and Edge, to 3G and HSPA
Altobridge, a company based in Ireland that specialises in improving transmission between remote sites, has seen an increase in business from operators looking to get more from their existing infrastructure, according to CTO, Richard Lord.
The company uses various compression and data optimisation techniques to reduce the volume of data in backhaul.
Lord said that with the growth of 3G data, driven partly by uptake of 3G dongles and devices, operators are facing problems with the backhaul of data.
He adds that Altobridge is currently developing a solution that will make significant cuts in the amount of data in backhaul by installing additional functions at either end of the backhaul link that will perform caching, pre-fetching, data compression and other data optimisation techniques.