Evolving Over the Long Term: Considerations towards implementing LTE

“LTE” is one of those terms that has been generating giddy excitement in the telecoms/mobile space: both its potential to change the mobile landscape as we know it and the reasons why mobile carriers must adopt it. Talk, however, is already moving away from LTE, to “LTE Advanced”, but many of us don’t even know what LTE is in the first place and what it might take to realise it…

Long Term Evolution (LTE) was first showcased around 2006, and has since been adopted by a number of telecoms operators as an emerging technology for mobile broadband. Its foundations lie in GSM, but unlike 3G technologies that were designed primarily to carry voice, with data in a supplementary role, LTE is designed to carry data rather than voice. Hence its network architecture is IP-based, but is still compatible with older and currently applied technologies.

Figure 1: Evolution of GSM technology

Use of LTE should result in a number of advantages:

• superior performance for data
• increased capacity]
• the capability to handle the increasing volume of packets on networks
• more efficient use of resources
• greater cost-effectiveness decreasing the unit cost per Mbit.

LTE is indicative of the next generation of mobile technology, and according to the ITU, as at December 2010, it qualifies as 4G. The next generation of LTE, “LTE Advanced”, is already being developed, and it is expected exceed LTE’s performance, as illustrated in the table below.

In recent months there have been urgent calls for operators to start implementing LTE. There have even been auctions of additional spectrum, most notably in the USA, to facilitate rollout. Although widespread deployment of LTE might be on the horizon, a number of issues, some of which are outlined below, must still be addressed by industry stakeholders.

Technical implications: LTE and 4G technologies can significantly increase mobile network capacity, but achieving those throughputs will be dependent on the amount of radio spectrum assigned. For example, in order to provide peak data rates of up to 1 Gbit/s, LTE Advanced networks will need to occupy continuous allocations of bandwidth of up to 100 MHz

Mobile broadband applications work optimally in the 300 to 3500 MHz range, but in many countries, this band of frequencies has already been divided into a number of sub-bands that support a range of other uses, including aeronautical and maritime radio-navigation, maritime mobile, amateur radio and broadcasting (ITU Region 2). Hence, to be in a position to offer high-speed mobile broadband service to a significant number of customers at the same time, there is a need for large amounts contiguous spectrum bandwidth, which may require existing users to be migrated out of certain bands.

In addition to the spectrum requirements, the full capabilities of LTE can only be achieved with considerable upgrade to network infrastructure, especially base station backhaul. Most GSM base stations support 2 Mbit/s backhaul, but achieving the speeds and capacity promised by LTE require significantly higher backhaul capacities.

Business implications: Currently, voice calls are considered a high-value revenue stream, since they are measurable with well-established systems for pricing and calculating costs. However, with regard to mobile Internet and data services, the pricing regimes are not as clearly established. Telecom operators are therefore making a concerted effort to protect voice revenues, especially since they have been under threat from VoIP providers such as Skype.

In LTE networks, all traffic is packet-based. Additionally, broadband services consume a considerably larger portion of the network resources in comparison to voice traffic. Hence operators are under considerable pressure to develop commercially viable business models for LTE and 4G data services, that will cover their costs and provide a reasonable return on investment, but will also drive service take-up and increased market share.

Further, into the foreseeable future many operators are opting to retain their circuit-switched networks, as VoIP service with the expected functionality and quality is still a serious challenge. Some operators are therefore prepared to run two networks: one for 3G voice, the other for LTE data.

Regulatory implications: First, to achieve the full potential of LTE and 4G it is essential that radio spectrum planning and allocation strategies recognise the future requirements of these networks. Current spectrum allocation may need to be freed up and reallocated for mobile/mobile broadband services and applications, and this will require time to implement.

Secondly, to facilitate widespread rollout and commercially viable 4G services, operators may be required share infrastructure, such as towers, antennas, backhaul and even switches. In many regulatory regimes, and especially in the Caribbean region, matters related to infrastructural sharing tend not to be rigorously applied, or are not already applied to the extent that might be necessary for commercially viable 4G. As a result, current policy and regulatory ethos may have to change to facilitate implementation of this new technology.

Further, to address the migration of voice revenue to data revenue, there are reports that industry players are developing an elaborate IP interconnection architecture with the purpose of maintaining the per-minute charging for voice, even if it is delivered over IP networks. However, the extent to which regulators might accept such cost/pricing regimes, which appear to inherently discriminate against different types of traffic over the same network, remains to be seen.

Financial implications: The financial implications of adopting LTE and 4G cannot be minimised, as they are considerable and are likely to cut across the entire sector.  Firstly, operators will be required to acquire additional spectrum in order to realise acceptable speeds and capacities. However, as a national resource, governments place a premium on the sale of spectrum, so prices might be especially high.

Secondly, operators must undertake significant upgrade of existing infrastructure to support 4G. Although there might be options to share facilities with other operators, considerable capital outlay is still expected, and parts of the current network may need to be written off early.

Thirdly, implementation of LTE and 4G may require national policy approval, since current users of certain bands might be required to vacate that spectrum and to take up new assignments. The incumbent users will most likely have to secure new equipment suitable to the new assignments, which can be costly. Hence, it must be clearly determined who will absorb the costs for the reallocation and reassignment processes.

Expected capability and competing standards: LTE is not the only technology poised for the 4G market: there is also WiMAX. In some quarters, WiMAX (Worldwide Interoperability for Microwave Access) is considered the most viable alternative to LTE. Under the current standard, IEEE 802.16e, WiMAX offers transmission speeds of up to 128 Mbit/s (download) and 56 Mbit/s (upload) in a 20 MHz channel. The update, IEEE 802.16m, is expected to offer rates of approximately 1Gbit/s for fixed users and 100 Mbit/s to mobile users.

Strictly speaking and when comparing potential capability, LTE/LTE Advanced might be considered far superior to WiMAX, but the performance realised from LTE technologies is highly dependent on the resources and infrastructure provided. In practice, operators face a serious challenge in the current wireless environment to realise LTE’s full capability and to offer viable services, when balanced against financial, technical and all of the other imperatives that must be considered.

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