'We went from having virtually no products here in Barcelona last year to having over 40 companies with real products on their stands, so Wimax is here and it's real,' Wimax Forum president Ron Resnick said at the time.
By that standard, if 2008 was the year Wimax proved itself to be a player, then 2009 could prove to be a similar key year for LTE. At an HSPA/LTE conference in Hong Kong last month, LTE was declared an official reality - not least by the Long Term Evolution/System Architecture Evolution (LTE/SAE) Trial Initiative (LSTI), currently comprising 21 vendors and eight operators, which was created in May 2007 to validate LTE/SAE's capability and facilitate interoperability to bring it to market faster.
'A year ago, the saying was that Wimax is real and LTE is not,' said Julius Robson, chairman of the LSTI Proof Of Concept Group, Nortel, 'but we can now say that LTE is out there in the field, there are trials, and it's real.'
That's no mean feat, considering that the original evolution path to LTE set a commercial trial availability target of 2011 at the earliest. But the wireless data market has changed considerably in the last couple of years. Wireless data usage has grown dramatically, driven partly by optimized trendy handsets like the iPhone, but also by laptops capable of replicating the Web user experience in a way handsets never could. And with Wimax designed from scratch to address that very market - and HSPA unable to keep up with growing demand for long - operators began clamoring for LTE to arrive sooner. Even CDMA operators decided they wanted it, forcing the CDMA Development Group to officially renounce its own 4G technology (UMB) and back an LTE migration path.
The good news is that LTE is living up to the hype in initial tech trials. According to LSTI's Robson, the group's proof-of-concept tests show LTE has surpassed the technical requirements outlined by the 3GPP, achieving a peak downlink rate of 154 Mbps field in a drive test using 2x2 MIMO. Another test using a 4x4 MIMO configuration yielded downlink peak rates close to 250 Mbps. Robson adds that LTE doesn't suffer much throughput loss under additional factors like differing RF conditions between users and application overhead, and that it also meets the 3GPP's latency requirements of 10 milliseconds for the air interface, 20 milliseconds end to end, and 100 milliseconds for the control plane.
But for all the hoopla over LTE's imminent arrival, that won't equate to massive rollouts any time soon. The standardization process is still ongoing, and apart from some early rollouts in the US and Japan (where NTT DoCoMo has already begun deploying its pre-LTE standard 'Super3G' technology) in 2010, even the most optimistic projections don't see serious LTE commercial rollouts before 2011.
That's not to say that LTE equipment won't be available before then. A number of vendors say they'll have LTE hardware ready next year. NSN plans to deliver LTE-ready base station hardware to over ten 'major mobile operators' in Europe, Asia and North America by the end of this year, with the promise that standardized LTE will be just a software upgrade away.
But while most cellcos are committed to LTE at some stage, there's more than one way to get there, and the path a cellco takes depends on a plethora of factors, says Matthias Reiss, head of LTE at NSN.
'Depending on operators network configuration, specific market needs for higher data capacity and peak data rates, as well as the available spectrum licenses and regulatory environment drive there as timing and strategies for LTE introduction, several upgrade paths to LTE are possible,' he says.
Evolve your HSPA
One such option is HSPA+ (also known as HSPA Evolution), which can boost HSPA data speeds well into the 21-Mbps range. Telstra has already deployed HSPA+ for its NextG service and Telecom New Zealand is reportedly committed to it. And Maxis Communications has been seriously evaluating it as a migration option, says Denis Seek Kwai Yin, Head of Radio Technologies and Technology Development at Maxis.
'We know that we want to go to LTE eventually, but we also think it will be five to ten years before LTE becomes a mainstream technology, so the question is, what will we do next year‾' he says.
Seek says operators basically have three choices: 'They can focus on HSPA+ and make the most of it, because LTE could take longer than expected. They can skip HSPA+ and go with LTE, if they are under intense pressure from competition where HSPA+ won't be enough. Or they can just stay where they are and wait and see what happens.'
Seek says that a good case can be made for adopting HSPA+ now from a number of angles. For one thing, it's already standardized under Release 7 and Release 8 and - unlike the current version of LTE - backwards compatible with the existing infrastructure. It offers the benefits of technologies like 64 QAM and MIMO (albeit not both, in Release 7). And it doesn't require new spectrum or all-new equipment.
'HSPA+ requires minimal change to your architecture,' Seek says. 'It's primarily a software upgrade, whereas with LTE the cost is initially high.'
Seek argues that HSPA+ has a lot to offer in terms of performance as well. For a start, its Higher Order Modulation (HOM) feature can increase the peak rate 50% in the downlink and 100% in the uplink - that works out to 21 Mbps and 11 Mbps, respectively. 'By our experience, to achieve this, you need a very good signal-to-noise ratio, so you need to know how much improvement you need to make in your S/N ratio per cell,' he says.
He also says operators should pay attention to less ballyhooed features of HSPA+, such as CPC (continuous packet connectivity, which can potentially double capacity for VoIP and save device power), enhanced cell_FACH (forward access control channel, which can increase the FACH data rate to more than 1 Mbps) and Layer 2 optimization for the downlink that can improve effective application data throughput.
'It's a good idea to focus on these aspects,' Seek says. 'They're not that widely talked about, but they can subtly enhance performance.'
That said, Seek advises cellcos to approach HSPA+ with the usual due diligence and caution, as there are some costs and challenges involved.
'The results we've seen so far for MIMO performance are based on simulations or trials with very limited scope,' Seek says. 'We need to see how MIMO actually performs in a macro-cell environment.'
Device availability is also an issue, as new chips are needed to support HSPA+. The wireless sector has been rather quiet on that front, although Sierra Wireless recently announced it is collaborating with Telstra, Qualcomm, and Ericsson to develop HSPA+ devices for Telstra's NextG network.
Even if devices are ready, however, advocates of early LTE argue that even HSPA upgrades won't be enough to handle the wireless data surge about to swamp the world's 3G networks.
'Most operators reported a 6x to 14x increase in data usage last year,' says Paul Steinberg, fellow and chief architect of telecommunications wireless infrastructure for Motorola. 'At the rate mobile data usage is growing, 3.5G networks will struggle to keep up as it goes mass-market.'
According to Steinberg, HSPA faces serious coverage issues as increased data usage causes cell shrinkage, forcing cellcos to split cells to handle the load. Even the backhaul networks aren't ready, being dimensioned for voice and low data rates. That means cellcos will have to invest in far more hardware than just some MIMO gear to cope with growing data demand, he says. 'The upgrades needed to support data traffic in the cells, the backhaul and the core network will be costly.'
Steinberg recommends that cellcos deploy LTE to avoid cell splitting. 'After you deploy your send or third HSPA carriers, then you should deploy LTE to limit cell splitting, and migrate your laptop users to LTE as soon as possible,' he says.
Steinberg also says that it makes sense for 2G cellcos in emerging markets to leapfrog straight to LTE, either via new spectrum in the 2.6 GHz band or by refarming 900/1800 MHz spectrum, depending on what's available.
Waiting for spectrum clarity
However, the question of spectrum availability is one factor of many that operators will have to take into consideration when planning their LTE migration strategy.
'We need regulatory clarity on spectrum,' says Shih Mu-Piao, VP of Chunghwa Telecom's Mobile Business Group. 'We need to know what our options are in terms of the availability of new bands for LTE, or refarming 2G bands.'
The catch is that there isn't much regulatory clarity at the moment, says Dan Warren, director of technology at the GSM Association. 'To make LTE the equivalent of HSPA, UMTS and 2G, you need global coordination of frequency bands because you need to support roaming,' he says.
He add that while 2.6 GHz is often touted as a likely frequency band for LTE - with around 11 regulators planning to auction 2.6 GHz spectrum before the end of 2009 - at the moment there's 'not a favorite band right now', although the 3GPP has submitted its preferred bands to the ITU.
One of the tricks in doling out new spectrum (which competing technologies like Wimax are also clamoring for) is how much of it to allocate. Current 3G networks work in channels of 5 MHz, while LTE can operate in channels as narrow as 1.4 MHz. That's especially helpful for cellcos unable to acquire 5 MHz worth of spectrum, and enables deployment of LTE in refarmed 2G spectrum, says Warren. 'So if you're unable to acquire 5 MHz, you can still deploy LTE within a much smaller band and still deliver the same efficiency level and as a result achieve relatively high bandwidth in relatively low frequency ranges if those kind of licenses became available.'
However, some operators have argued that LTE only really outperforms 3.5G if the channel width is at least 10 MHz.
'HSPA+ and LTE give similar performance in a 5 MHz channel,' says Chunghwa's Shih. 'You really need a channel width of 10 MHz to 20 MHz to see a difference.'
Seek of Maxis agrees. 'LTE has a more flexible bandwidth range from 1.5 MHz to 20 MHz, but it's really only meaningful if you have 15 to 20 MHz.'
A matter of timing
Even when the spectrum issue is sorted out, at the end of the day it's going to come down to the market realities on the ground, which differ from one market to the next, says Shih.
'We recognize the benefits of an LTE upgrade: higher throughput, lower latency, lower cost per megabyte, optimized spectrum usage and scalable bandwidth,' he says. 'But with HSPA+ available, there are other factors we need to take into deeper consideration, such as the level of service demand, the competitive situation and regulatory compliance.'
The GSMA's Warren adds that it's all in the timing, and that the time to go with LTE will differ from market to market.
'There are a number of evolution paths from HSPA, and to be frank about it, the HSPA evolution path from one data rate to the next is a relatively small capex outlay compared to LTE, which will make more sense for some operators' he says. 'That's not to say the cost of LTE is prohibitive. It just means you have to understand the business case and make that investment at the right time.'
3G: we've only just begun
As proponents of Wimax and LTE begin to battle for 4G dominance, the era of 3G wireless is really just beginning, and analysts predict it will be a long one, as telecoms sort out new monetization strategies.
'3G networks will be driving major revenues of these operators for at least the next ten years, as 3G technologies will serve as the fill-gap technologies once 4G technologies are rolled out,' said Gemma Tedesco, a senior analyst with In-Stat. Recently, Tedesco published a report which predicted that 3G technologies (GSM, EDGE and GPRS) will account for more than 55% of the total 4.8 billion worldwide wireless subscriptions in 2013.
But even with 4G, particularly LTE, being firmly on the horizon, carriers will have plenty of issues to occupy their time.
For one, monetization of wireless services in general has become a thornier problem, according to Tom Nolle, president of CIMI Corp. If it isn't solved, the impetus to spend billions to upgrade networks to 4G might not materialize.
'If you think about it, if $30 per month is all customers want to pay, let them pay for what they're getting now,' Nolle said. 'If I'm investing in 4G, I have to replace every piece of equipment in my network, and if the willingness to pay stays at $30, we're not going to upgrade.'
A new generation of more sophisticated devices, like the Apple iPhone, is contributing to this problem. Just as wireline voice revenues were increasingly commoditized and then decimated by VoIP, many wireless services once solely the domain of service providers can now be sold directly to consumers by third parties, leaving the telecoms with only the basic Internet access revenues. For example, while carriers used to get a significant cut of downloadable games, users can now buy them directly from the iTunes store or download them from websites on a BlackBerry.
Even mobile voice revenues are endangered by a coming wave of mobile VoIP providers.
So as these traditional revenue streams - voice, text and picture messaging, add-on services like ringtones - dry up, carriers are looking at increasingly experimental, and untested, ways to stay profitable.
'What the operators are realizing is that if they can make the handset something more than just what the user relies on to make and receive calls, they can charge for services on that,' Nolle said.
That means making the cell phone an integral part of people's personal lives and tapping into social networking and location-based services, as well as developing new advertisement and marketing monetization strategies, a segment Google is looking to capitalize on with its open Android devices.
While service providers sort out just exactly how they will make money in the future, they continue to upgrade from 2G to 3G technologies, giving themselves breathing room before the major infrastructure investments need to be made.