Third-generation, high-speed data networks and their accompanying attractive flat-rate pricing and devices are driving mobile broadband to mass-market levels and giving mobile operators a strong business case to migrate to LTE technology.
Operators have experienced dramatic growth in mobile data traffic thanks to their widespread deployment of 3G networks and aggressive flat-rate pricing plans for both laptops and smartphones. As this trend accelerates, operators must find ways to reduce their network costs and still make money despite the fact that their services are turning into mass-market offerings.
Today’s 3G networks simply cannot handle the influx of data traffic at mass-market levels without costly investment. This hastens the need for an all-IP, next-generation technology that is more spectrally efficient and requires fewer base stations and radios.
Indeed, wireless industry experts don’t see any signs that the demand for mobile broadband services is slowing and Asia is actually leading the growth. According to research conducted by Informa Telecoms & Media, mobile broadband subscribers worldwide reached more than 225 million subscribers at the end of March last year. Another report released by Allot Communications last July points out that worldwide mobile data bandwidth usage increased by about 30% in the second quarter.
Asia leads with 36% growth while Europe posted 28% growth and the Americas recorded 25%. Data-intensive services such as video streaming are growing exponentially. Meanwhile, inexpensive, web-friendly smartphones are turning wireless customers into heavy users of mobile data services.
These trends are setting the stage for a mobile broadband offering that compares well or complement fixed broadband services on flat-rate pricing but with the added benefit of being mobile. 3G operators will suffer capacity issues and will have to face a choice of either allowing the customer experience to degrade, invest significantly to support the capacity growth or deploy more efficient networks.
Continuing to invest in 3G networks to accommodate the expected dramatic growth in data traffic is expensive. Operators that have exhausted their network and spectrum capacity will have to find more sites to deploy more base stations and ancillaries, invest in new backhaul links and continue to upgrade all their core network elements.
The lower sector throughput capacity of 3G technology means that more base station radios and cell sites are needed to support the rising traffic demand. To support a similar data usage, a typical HSPA network running two 5-MHz carriers could require a minimum of three times the number of base stations than a LTE network running at 10 MHz. With lower cost per bit, LTE operators can lower tariffs and attract new subscribers and at the same time make money. For example, operators can offer a lower priced plan for those customers not worried about latency and “Gold” plans for those who want the fastest data speeds possible.
LTE’s attributes enable this. Some applications will require the most optimal network performance available, thus allowing operators to charge extra for quality of service (QoS). For instance, an operator could provide more bandwidth for a short period of time to enable customers to view video in real time or better QoS for mission-critical applications such as mobile commerce.
Moreover, because LTE is an all-IP technology, it can interconnect and seamlessly handover to Wi-Fi, allowing operators to relieve network capacity and lower operating expenditures even further.
That capability can unleash a host of integrated solutions that can persist throughout the home and as a subscriber walks out the door, all without dropping the signal. It also creates a new source of revenue for operators and a powerful proposition for consumers who, for instance, don’t have to stay home to download big files and pictures or upload several hundred megabytes worth of photos onto YouTube.
Pricing pressure in the market will ensure that tariffs reach a mass-market.
Deploying LTE means operators can embrace the trend into a competitive advantage and ensure that their services become a must-have for consumers, who would inevitably expect that mobile broadband will reflect a continuation of the fixed broadband experience.
Mohammad U. Akhtar is vice president and general manager for Asia Pacific at Motorola's home and networks mobility unit