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Feb 27 2012

LTE: The Best Thing to Happen to Wireless Networks

Accelerate beyond 3G

Momentum around the globe speaks volumes: LTE is delivering on its promise to help operators rise above the data storm. 4G LTE can deliver more data, faster, with a better experience and greater economies of scale than 3G. And operators are moving extremely quickly to reap the rewards. According to the Global mobile Suppliers Association (GSA), 4G LTE is the fastest developing mobile system technology ever. As of early 2012, the GSA reports there are already.[1]

  • 285 operators in 93 countries investing in LTE
  • 49 commercial LTE networks in 29 countries
  • 119 commercial LTE networks in 53 countries forecast by the end of 2012

When it comes to gaining and retaining customers, LTE’s advantages over 3G make it the new benchmark for competition. As a result, operators in all markets are evolving their wireless networks to LTE:

  • In developing markets, wireline deployments are often logistically impossible or cost prohibitive. Operators in these markets are using LTE to cost effectively bring the mobile Internet to areas that previously had no Internet access at all.
  • In developed markets, operators need to make more money from data services to offset declining voice revenues. Premium data services, such as mobile video, gaming and business apps, need LTE’s big bandwidth and low latency.

Deliver more data

3G gave people a taste of data. And they liked it — a lot. As people adopted Apple iPhones®, Android™ smartphones and tablets that let them take advantage of data, their behavior changed. They also adopted apps that have been purpose-built for data. Now, with a single touch they can easily consume and share large volumes of data, no matter where they are. Global mobile traffic is increasing by 25 times according to a recently concluded Bell Labs Traffic Index study. Average consumption per device is also growing 14-20 fold. To make money from this seemingly insatiable appetite for mobile data, operators must deliver more data, more efficiently and more profitably. Now is the time for operators to seize this opportunity and profit from the growing data storm. In many countries, people update their mobile devices every 12 to 18 months and more people are switching to affordable and more powerful smartphones. They expect the latest and greatest capabilities and a better experience with each new device. Whether they’re watching videos, gaming, shopping or working while on-the-move, they expect all apps to perform as they would on a wireline network. In 3G networks, upload speeds are reaching their limit as more content is generated and shared from devices such as advanced smartphones with HD cameras (including front-facing), high resolution large screens and social network friendly apps. This means the customer experience will also reach its limit if the network cannot stay ahead of the demand. LTE delivers the speed and efficiencies operators need to offer consumers and enterprises the apps they want with the experience they expect. Compared to 3G, today LTE gives operators:

  • Up to 10 times the speed
  • 3 to 5 times lower latency
  • 2-3 times the spectral efficiency (and further improving with LTE enhancements)

These capabilities translate into superior app support. Table 1 compares 4G LTE and 3G HSPA support for key consumer and enterprise apps.

Source: Alcatel-Lucent Market and Consumer Insight, Europe.

Move to all IP

Operators know they need to move to all-IP wireless networks just as they moved to all-IP wireline networks. It no longer makes business or financial sense to run multiple disparate networks. To deliver the massive capacity required to serve the demand, today’s networks must change. The lightRadio Network solution introduced by Alcatel-Lucent offers an innovative approach and a platform purpose-built for mobile broadband. It changes the way networks are designed, deployed and managed by bringing together a unique blend of radio access (macro cells, small cells and Wi-Fi), advanced IP backhaul/transport, and core. The introduction of this new architecture:

  • lowers the total cost of ownership of the network
  • reduces power consumption and footprint, delivering a greener sustainable solution
  • offers an order of magnitude increase in capacity and flexibility to manage growth
  • integrates seamlessly with the existing network paving the way for faster migration to 4G and enriched user experiences

Unlike 3G, LTE is all IP. In fact, it’s based on IPv6 which supports massive numbers of additional IP addresses and provides other improvements over IPv4. And it opens up access to new market segments like machine-to-machine. With IP across the radio access network (RAN), backhaul network, packet core network and backbone, operators benefit from a simpler, more scalable and cost-effective architecture.

Adopt a global standard

LTE provides a converging path for all wireless technologies. According to the GSA, LTE is the natural migration choice for GSM, HSPA, CDMA and WiMAX operators.[1] As a standard that can be deployed in every network, LTE helps align today’s fragmented network and device ecosystems. That’s important because fragmented standards make it difficult to scale globally. Device alignment is particularly important. In the last 6 months there has been a 6-fold increase in the number of LTE smartphones in the market.[2] Today there are service providers who sell LTE smartphones for less than $50. If an operator can’t scale, then the cost of introducing new smartphones, tablets or other devices is simply not a sustainable business model. The good news is, the industry is aligning around LTE devices. In January 2012, the GSA reported 269 LTE devices had been launched in the market by 57 suppliers. This marks a 36% increase compared to the figures reported in October 2011.[2]

Profit from LTE

Two key facts confirm that operators believe it pays to invest in LTE:

  • The GSA expects the number of commercial LTE networks will more than double in 2012, jumping from 49 to 119.[1]
  • Operators around the globe are spending billions on LTE spectrum that has already been auctioned in many countries, while other countries are preparing to provide spectrum for mobile broadband.

The return on investment for LTE varies for each operator. Business modeling services, such as those available from Alcatel-Lucent Bell Labs, help operators make the right investment decisions for their strategic, market and business goals. To help ensure their move to LTE is profitable, operators are turning to vendors with experience and expertise in both wireless and IP. Ecosystems are another important part of their strategies. For example, ng Connect, an industry ecosystem with more than 125 members is developing prototype solutions that showcase LTE’s potential in retail, health and wellness, entertainment, learning, transportation and other areas. In addition, early adopters of LTE such as Verizon and AT&T have acknowledged the importance of ecosystems with the introduction of their innovation programs. The faster operators can bring LTE to market, the faster they can rise above the data storm to grow profitably and drive new revenues. Once they have the spectrum, there’s no reason to wait another day to invest in LTE and commercialize its vast potential. To contact the author or request additional information, please send an email to networks.nokia_news@nokia.com.

Footnotes

  1. [1]© 2012, January 5, GSA Evolution to LTE Report: GSM/3G Market/Technology Update, Global mobile Suppliers Association.
  2. [2]© 2012, January 20, GSA, Status of the LTE Ecosystem Report.
About Maniam Palanivelu
Maniam Palanivelu has global responsibility for marketing Alcatel-Lucent's End-to-End 4G LTE Solutions. He has over 16+ years of experience in the wireless industry in various functional roles within marketing, sales, product management and engineering in both regional and central organizations. Prior to joining Alcatel-Lucent, Maniam was instrumental in driving network integration with the "nPhase" Machine-to-Machine Solution (a Joint Venture between Verizon Wireless and Qualcomm). He also supported Verizon Wireless 4G LTE marketing initiatives for the LTE Innovation Center and public events. Prior to his time at Verizon Wireless, Maniam held a variety of key positions within Nortel's Wireless Business units. Maniam also held a technical pre-sales and marketing role in SIEMENS Mobile Networks Division where he started his telecom career. Maniam holds a Master's Degree in Electronics and Communications Engineering from University of Delhi and MBA in Marketing and Strategy from University of Texas at Dallas.