Motivating factors for investing in LTE

By Cintia Garza

LTE is still a few years away and many questions about the technology and business model remain unanswered. So why are many   operators and equipment vendors betting on LTE today?

This is a simple question, with many different answers. While some operators view LTE as a disruptive technology, others see it either as an evolutionary path from their current technology or as complimentary. According to Mike Wright, executive director of Telstra in Australia, LTE will not replace its HSPA network that was deployed earlier this year, but rather will serve to complement it where there are capacity issues or more spectrum is needed. Telstra wants to utilize different spectrum ranges--LTE will provide the flexibility of using 900 MHz; at some point they will want to utilize their 1800 MHz spectrum and may also want to acquire 2.6 GHz spectrum if extra capacity is needed. One major advantage that Telstra sees is that LTE is much more flexible when it comes to awkward-shaped channels. For example, at 900 MHz, Telstra has 8.4 MHz of bandwidth. LTE will provide much more efficient usage of that type of channel than would WCDMA, for instance.

The evolution to LTE is also compelling for some operators because of reduced capital and operating expenditures when compared with previous 3G networks. Some will be able to leverage their existing 3G networks to upgrade to LTE. For those without a mobile/cellular infrastructure, deploying an LTE network might not be a cost-effective solution. For Telecom Italia, LTE will be an overlay technology for its 3G network to provide higher bandwidth services. Alberto Carnellio, director of business innovation at Telecom Italia, argues that 3G and HSPA have been very successful, and sees 4G as an evolution to 3G and HSPA that will bring improvements in terms of efficiency and performance. A question to keep in mind is what would happen if traffic grows beyond HSPA capacities? What about spectrum availability?

Joachim Horn, CTO of T-Mobile International, considers that HSPA has been developing well. The operator plans to continue profiting from this development, but foresees a limitation in capacity in a couple of years as traffic increases. T-Mobile will start deploying LTE as a host-spot high traffic zone solution, and as the technology matures and interoperability issues are resolved it expects a major rollout of LTE.

Another common thread driving the deployment of LTE will be the increasing demand for mobile data and video services at the lowest cost per bit. For U.S. carrier MetroPCS, the move to LTE provides two things: capacity and speed. MetroPCS has picked LTE as its 4G standard, following the lead of Tier 1 operators Verizon Wireless and AT&T Mobility. The operator aims to deploy LTE to address the rapid increase in multimedia traffic.

LTE also promises to provide great flexibility to operators in determining the spectrum in which it will be deployed. Not only will LTE have the ability to operate in a number of different frequency bands including the 2G and 3G spectrum, which are already widely available worldwide (meaning operators will be able to deploy it at lower frequencies with better propagation characteristics), but it also features scalable bandwidth. Whereas WCDMA/HSPA uses fixed 5 MHz channels, the amount of bandwidth for an LTE system can be scaled from 1.25 to 20 MHz. This means networks can be launched with a small amount of spectrum, alongside existing services, and adding more spectrum as users switch over. It also allows operators to tailor their network deployment strategies to fit their available spectrum resources...Continued [1].

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