upgrade strategies for mass market mobile broadband

Upgrade StrategiesFor Mass Market Mobile Broadband

WHITE PAPER

Key Findings

• The“perfectstorm”ofwidespread3.5Gdeployment,flatratedatatariffs,andavailabilityofmobiles withinternetfriendlyfeatureswillresultinavirtualexplosionofwirelessbroadbanddemandleading tospectrumexhaustion,perhapsby2010.

• ThetechnologyadvancesincorporatedinLTEleadtoincreasednetworkcapacityandeconomic competitiveadvantage. • TheeconomicadvantagesofhighcapacityLTEwillbeinstrumentalindeliveringaffordable,wireless broadbandtothemassmarket,andisdeterminedbythemassmarkettotalaveragecapacityby minimizingtheneedforadditionalcellsitesandfewerradiospercellsite.

• WithLTEnearingcommercialdeploymentin2010,thewindowofopportunityforalegacytechnology upgradeissomewhatlimited.

• AnoperatorchoosinganearlydeploymentofLTEcanexerciseaconsiderablecompetitiveadvantage withtheeconomicbenefitsofLTEratherthaninvestingininterimupgrades.

Introduction

In2006,manycellularoperatorsbegan3.5Gnetworkdeployments(HSPA&EV-DO)andsubsequentlyintroducedverypopularflatratedatatariffs.Theseoperatorsnowenjoyagrowingsubscriberdataservicespenetrationandtheresultinggrowthindatatraffic.Inadditionmostofthedevicesavailabletodayfeaturetheabilitytoplayrichmediacontent,accessemailandanumberofmobilefriendlysitessuchasGoogle,Yahoo,NewYorkTimes,etc.Applicationvendorsarecreatingcontent,portalsandnewwebbrowsingadaptedtothemobilephonemarket.

Thesemarketforcescombinetocreateanexplosionofdatademandontheirnetworks,withmanyoperatorsreportingtripledigityear-on-yeargrowthinnetworkdatatraffic

Thedeploymentof3.5GHSPAnetworkswerecriticalfortheadoptionofmobilebroadbandbutfacedwiththemobilebroadbandmarketsuccess,operatorsmustnowconsidertheupgradepathstosupportthecontinuedgrowthwithwellperformingnetworkthatprovidessufficientcapacitytooffersubscriberagreatmobilebroadbanduserexperiencewhatevertheconditions.

Thenecessaryupgradesto3.5GnetworksoftenrequireincreasingthebackhaulcapacitybetweentheRadioNetworkControllerandCellsites,UTRANsoftwareandhardwareupgradestosupporthigherspeedHSPA,deployingasecondandthirdcarrier,additionalNCs,andadditionalPacketDataCorecapacity.Eventually,costlycellsplittingwillbeneededinmarketswheretheavailablespectrumisexhausted.

Thegrowthindatatrafficcontinuestoincreaseatunprecedentedrates(tripledigitpercentageincreasehasbeenobservedinmanyinstances)1,andmanyoperatorsarealreadyconsideringtheiroptionsfornearandlongtermgrowth.Thispaperstudiesvariousaspectsofchoosinganevolutionpath,withtheparticularfocusonHSPA+andLTEasthemostcommonchoicesfacing3GPPoperators.

WirelessDataBoom–thePerfectStorm

Inthenextfiveyearswirelessdataservice(HSPA)penetrationinsomemarketswillincreasetonearly85%,leadingtomassiveincreaseinpacketdatatrafficinthe2.1GHzUMTSband.AsshowninFigure1,subscriberacceptanceofhighspeeddatacapabilitywillmovewellintothemainstream.Thisuptakewillbeenabledwithfeature-richphonesandsmart-phonesthatwillachievemainstreammass-marketacceptance.

2 WHITEPAPER:UpgradeStrategiesForMassMarketMobileBroadband

1 Informa,2008,3GWirelessBroadband,“TheFutureisflatfornetworkarchitecture…”

-

250

500

750

2007 2008 2009 2010 2011 2012

Subs

(mill

ion) 10x Penetration

GSM

GPRS EDGE

UMTS

3.5G4G

Figure1.Europeansubscribermigrationtowirelessbroadband.Source:Informa

Competitivepressureswillleadtowidespreaduseofsimplifiedandflatratetariffs,furtherencouragingconsumerutilization.Inmanydevelopedmarkets,feature-richmediahandsetsnowrepresentover50%ofnewhandsetsales.AsshowninFigure2,theworldwideAverageSellingPriceforfeature-richmediaphoneswillsooncrossunderthewidelyacceptedmassmarketthresholdof$150,withsmartphonesfollowingclosely.Asnewentrantsintotheultra-premiumhandsetmarketinevitablybegintomigratetowardthemainstream,increasingpressurewillmovetoday’shighendsmartphonesintothemainstreamaswell.

Figure2.Massmarketadoptionoffeaturerichandsmartphones.

Asthesemarketforces(tariffs,phones,andnetworks)convergeformobilebroadband,operatorswillincreasinglyexperiencecongestiononbroadbandnetworks,withearlyadoptiontechnologiessuchasHSPA(orEV-DORev.A)arefacedwitheverincreasingdemands.Operatorswith5or10MHzofHSPAspectrummayexperiencethisasearlyas2009-2010,dependingonthesizeoftheirsubscriberbaseandhowtherapidlysubscriberbaseandtrafficgrows.


3GPPLTETechnologyAdvances The3GPPRelease8,layer1specificationwasfinalizedinJanuary2008,whiletheupperlayers’specificationsareanticipatedtobecompletedlaterin2008.ThehighperformanceLTEairinterfaceextendsthetechnologicalinnovationforthe3GPPoperatorwiththemostadvancedfeaturesbuilt-infromthestart,ratherthanaddedontoanexistingradiotechnology.Thisavoidstheperformancedilutionthatresultsfromlegacymobilesunabletoaccommodatethenewperformancefeatures.

SomeofthedistinguishingcharacteristicsofLTEinclude

• OrthogonalFrequencyDivisionMultipleAccess:SpectralEfficiencyandimprovedcoverage • AdvancedAntennaTechnology:MIMOandBeamForming • HigherOrderModulation:upto64-QAMforhigherdatarates • ScalableBandwidth:1.4MHz–20MHz,scaleforgrowthandincrementalmigrationofexisting spectrumusetoLTE • FrequencySelectiveScheduling:increasesefficiency • AllIPtothemobile:uncompromisedbylegacysupport • Semi-Flatarchitecture:simplifiesnetworkandallowsforeasier,mostcosteffectivescaling • Loweroverheadburden:increaseseffectiveefficiency • QualityofService:builtinfromthestart • LowLatency:Improveusersatisfactionandenableslatencysensitiveapplicationstofunctionbetter (e.g.gaming) • MultimediaBroadcastMulticastService(MBMS):designedfordramaticallyimprovedandefficient videodistributionwithaSingleFrequencyNetwork

PeakdatarateperformancecomparisonTheperformanceenhancingfeaturesof64-QAM,MIMO,andbroadbandspectrumdeliverexceedinglyhighpeakdatarates.Inanycellularnetwork,actuallyachievingthepeakdataraterequiresaparticularlybeneficialsignalenvironmenttodeliverontheirperspectiveperformancegains.Typically,asmallpercentageofsubscribersareinlocationssuitableforthepeakrates,whiletheremaindercanachievereceivesomethingless.

AtypicalmeasureofthecellularenvironmentisaSignaltoNoiseRatiocalledC/I.2x2-MIMOand64-QAMtypicallyrequireanenvironmentwhichexhibitsa10dBC/Iratioinordertodeliverbestresults.Amoreimportantmeasurementfortheremaining95%ofsubscribersistheaveragesectorthroughputforatypicalcellsite.

Figure3depictsactualmeasurementofC/Iin4majorurbanandsuburbanmarkets,withpopulationsrangingfrom1.5to10.5million.Hereweobserveonlyafewpercentofmobilesreportsuch“C/I”sufficientforeither64-QAMor2x2MIMO.

Asaresult,thehighperformancefeaturesofHSPA+willbenefitonlyfewsubscribers(typically2-5%percell)henceprovidelittlecellcapacityimprovement.


Figure3.2x2MIMOand64-QAMlimitedbyenvironmentalconditions..

UMTS Release Antenna Technology Bandwidth

Type Qty 5 MHz 10 MHz 20 MHzR6HSPA SIMO 1x1,1x2 14.4 -- --

R7HSPA+ MIMO 2x2 28.8 -- --

R7HSPA+64-QAM SIMO 1x1,1x2 21.6 -- --

R8LTE MIMO 2x2 43 86 173(1)

R8LTE MIMO 4x4 82 163 326(1)

Table1.DLPeakDataRates,Mbps(1)3GPPTR25.912V7.2.0

ForthebestMIMOperformance,arichmulti-pathsignalenvironmentisrequired,andvarieswidelywithlocation.Atypicallocationwouldbewhenthemobiledevicehasadirectlineofsightpathtothetransmitterandanearbyreflectingbuilding.WhenconditionssuitableforMIMOexist,thentwonon-correlatingdatastreamscanbeeffectivelydeliveredtothemobile,withdataratesapproximatelydoubling.

Theeconomicvalueofthesesustaininginnovationsisdeterminedbytheeffectontotalaveragecapacityforanentiremassmarket,andnotjustthebenefitsdeliveredtothefortunatefew.TheaveragesectorthroughputisthemetrictoassesseconomicpotentialandtheonethatoperatorsshouldbeconcernedaboutasithasadirectimpactontheirnetworkCAPEXandOPEX.


CellShrinkage

Unlikesharedcarriertechnologies(likeCDMAandWCDMA),LTEiseffectivelyimmunetocellshrinkageor“breathing”asnormallyobservedastrafficincreasesspreadspectrumtechnologies.Thiscanleadtolargerfootprintandfewercellsites,aswellasincreasethelikelihoodofexistingcellsitereuse.

TheImportanceofDownLinkSectorThroughput

Thetotalsectorthroughputissimplythetotalnumberofbitsdeliveredtoallusersinasector.Thesomewhatclover-shapeofacellsitecoveragehasrelativelyfewsubscribersclosetocelltowerthatcangetthehighestdatarates,whilemostsubscribersaredispersedfurtherfromthetowerandachievelowerdatarates.

Althoughtheadvancedtechnologiesof64-QAMand2x2MIMOwithLTEarenotyetdeployed,wecangainmuchinsightbyexaminingthesimulationoftypicalconditions.Usingatypicalreferencescenario2,LTEisexpectedtodelivernearlytwicethesectorthroughputthatoperatorscurrentlyexpect.Aswirelessbroadbandreachesthemassmarket,theLTEsolutionwillrequiresignificantlylessradioresourcethanlegacytechnologiestomeetthedemand.ExpensivecellsplittingmorelikelytobeavoidedandthusgivingasustainablecompetitiveadvantagetoanLTEoperator.

Figure4.DLAverageSectorThroughput2,Mbps.Source:Motorola

LTEImprovementstoDownlinkThroughputandCapacityWhilealsoutilizingMIMOand64QAM,LTEbringsanumberofimprovementsthathaveadirectimpactonthe

userexperienceofallusersinacell: • Bettermulti-pathsignalhandlingcapabilitythanCDMAtechnologies. • Nointra-cellinterference,aseachsub-carrierisuniquelyassigned. • Interferencecancellationisbetterforreducedinter-cellinterference. • Mitigatesthecellshrinkagevs.loadingphenomenaofCDMAtechnologies. • MoreefficientMulticast,Broadcast. • LowercontroloverheadthanCDMA. • FrequencySelectiveschedulingforadditionalflexibilityandefficiency.

2Performanceresultsbasedon2GHz,fullbufferdata,1.732kmintersitedistance,3km/hr,MMSEreceivers,2x2MIMO(HSPA1x2),and20dBpenetrationloss


TheImportanceofUplinkPerformance3.5Gand4Gcellularnetworksarefrequentlyuplinklimited,eitherbythemaximumrangeofahandsetforcoveragelimitedcellsorbytheuplinkradiointerfaceincapacitylimitedcells.Thesearejusttwofactorsthatdeterminetheeffectivecellsize,numberofcarriers,andnumberofcellsitesdeployed.

Asnetworkloadingincreases,thatisnumberofsubscribersinthecell,thesharedcarrierofspreadspectrumCDMAtechnologieswillundergocellshrinkage(orbreathing)fromwhichLTEislargelyimmune.ThecauseoftheshrinkageissimplymoresubscribersonthesamecarrierintroducesmoreRFnoiseinthecell,reducingSignal-to-Noiseratio.Thismeansastrongersignalisrequiredtogetthesamedatarateaswhenfewersubscribersareactive.Sincethisisusuallyaccomplishedbyashorterrangefromthetower,thecelleffectivelyshrinks.

WithLTE,eachsubscriberhasuniqueuseoftheassignedindividualtonesduringatimeslot.ThereisnocellshrinkagephenomenonbecauseofsharedcarriersaswithspreadspectrumCDMAtechnologies.

Also,LTEwilllaunchwithsophisticateduplinkinterferencecancellationmethodsbuiltintotheairinterface,furtherincreasingtheuplinkspectralefficiencyandcapacitybyreducingtheapparentnoiselevels.

Assubscribersandoperatorsbecomemoresophisticatedintheuseofwirelessbroadband,usagepatternschangeaccordingly.Inhistoricalvoicedominatednetworks,aroughlybalanceduplinkanddownlinkweredesirable.

Withtheriseofpeer-to-peercommunication,socialnetworking,andusergeneratedcontent,theuplinkanddownlinktrafficprofilesbecomemorebalanced,andthisisreadilysupportedwiththe3.5Gtechnologies.Theuplinkperformancewillincreaseinimportanceasthesesocialnetworkingactivitymovestothemobilerealm.Recenthandsetintroductionsmakeshooting,editingandsharingvideosdirectlyfromyourmobileeasierthaneverbefore3.

EconomicCompetitiveAdvantageTotalCostofOwnershipAswirelessbroadbandreachesthemassmarket,theimpactofaveragethroughputorcapacitybecomesapparent.Assubscriberpenetrationandusagetransitionsfromearlyadopterstagetomassmarketpenetration,theadditionalcapacitydeliveredbyLTEwillyieldsignificantcompetitiveadvantage.Theearlyadopterstageischaracterizedasapredominantlylaptop,datacardandUSBdonglesubscriber.Thedatademandsmaybehigh,butthesubscriberpenetrationinthelowsingledigits.Massmarketinevitablymeanshandsetoriented,withsubscriberpenetrationbywirelessbroadbandapproaching85%,earlyinthenextdecade4.

Whentheaveragedatatrafficformassmarketsubscribersislow,amuchofthenetworkremainscoveragelimited,thatiscellsitesarenotoperatingnearthecapacityoftheradiointerface.Astrafficbuilds,thenasignificantportionofthenetworkbecomescapacitylimited,withadditionalradiocarriersdeployedtohandlethetrafficload.Afterspectrumlimitsarereached,additionalcellsitesaredeployed.

Theinflectionpointfromcoveragelimitedtocapacitylimitedwillofcoursevarybymarket,spectrum,radiotechnology,tariffplans,etc.LegacyCDMAbasedtechnologiesmayexhibitthisinflectionat1–2GBytes/monthforanaveragesubscriber,while4GOFDMtechnologiesmayexhibitsomesignswithat4GBytes/month.AsignificanteconomicadvantagedeliveredbyLTEcapacityistheabilitytomeetthegrowingwirelessbroadbanddemand.

3MotorolaZ10,http://www.motorola.com/mediacenter/news4Informa,FutureMobileBroadband,2ndEdition


Figure5.TotalCostofOwnershipInflectionSource:Motorola

WindowofOpportunity

ThependinglaunchofLTEwillcauseoperatorstoconsidertheirCapExspendcycle,andhowthatcandeterminetheirpositionwhenacompetitordeploysLTE.Thewindowofopportunitytocapitalizeoninterimupgradesmaybelimitedbyavailabilityandsubscribermixofsuitabledevicesinthenearterm,andtheinevitablelaunchofLTEinthelongerterm.

Upgradecost

OperatorswithsignificantlegacyequipmentmaydiscoverasignificantCapitalExpenditureisneededforaninterimupgrade.ThismaybeduetolegacyhardwareunabletohandletheMIMOor64-QAMhighspeeddataratefeatures.Newancillaries(possiblyadditionalduplexersandcablingforMIMO,forexample)mayalsocomplicatethevalueproposition,especiallyifacompetitoradoptsLTEsoonerratherthanlater.

Therearealsocorenetworkupgradeimplicationstoconsider.Mostcorenetworkswillcontinuetorequireupgradetohandlethecapacitywithadvancing3.5Gand4Gtrafficdemands.TheEvolvedPacketCorenetworkismuchmoreefficientandscalabletodeploythanthe2G/3GderivedGPRScoreelements(RNCs,SGSNs,GGSNs,etc.).ThisisbecausetheEPCisoptimizedaroundbroadbanddatanetworktechnologies(vs.ATM,etc.).Theincreaseinbackhaulrequirementsarecompoundedoncespectrumisexhaustedandoperatorsresorttocell-splitting.


TheLTEupgradeCapExcycleappearstohavecomplexitiesandconsiderationscomparabletomostnetworktechnologyupgrades,butitprovidesmuchbetterforwardlookingprospectsaswemoveintothemassmarketwirelessbroadbandera.

SpectrumforLTE

LicensedSpectrumacquisitionpresentsaseriousbarriertoentryformanypotentialcompetitors,hencethefiercecompetitionforavailableallocations.Currently,many3GPPoperatorsworldwidehave5MHzto15MHzallocationsofFullDuplexspectruminthe2.1GHzband.TherisingdemandforwirelessbroadbandmayverywellfillthisspectrumjustasLTEbecomesavailable.Aspectrumcrunchin2009–2011willincreasetheurgencyforLTEinnewspectrum(2.5–2.6GHz,AWS,700MHz)orofLTErefarmingexistingGSM/CDMAspectrums,furtherextendingwirelessbroadbandintothemassmarket.AsshowninFigure5,operatorswitharelativelyrapidmigrationofsubscribersfromGSMtoHSPAmaybethefirsttoexhausttheir2.1GHzcapacity

Figure7.OperatorswithrapidHSPApenetrationandlimitedspectrumareearlycandidatesforLTE.

Figure5.Operatorsintheupperleftwiththemostsubscribers,leastspectrum,andrapidupgradefromGSMwillbehighlymotivatedforLTEsoonerratherthanlater

Eventually,GSMwillbereplacedbymorecapable3GPPtechnologies,andLTEpresentsauniqueopportunityforin-bandmigrationmadepossiblebythescalablebandwidthofLTE.Ifaslittleas1.4MHzofGSMcanberefarmed,abaselineLTEsystemcanbedeployed.MultimodeGSM/LTEmobilescanthenfacilitatethemigrationofvoicetraffictotheall-IPLTEwitheachincrementaltransitionprovidinganincreaseinbothcapacityandperformance.Initialmobiledeviceswilllikelybemulti-mode,multi-banddatacardsandUSBdevicessubjecttooperatordemand.Basedonmobilechipsetavailability,Datadevicesshouldbeavailablein2010.Multi-band,Multi-modemobilessupportingLTEarealsosubjecttooperatordemand.Migratingvoiceservicesfrom2GtoLTEisdependentonVoIP/IMSuptakebyoperators.

OtherspectrumsuitableforLTEincludestheworldwideroamingpossibilityaffordedby700MHzspectrumintheU.S.andlaterinEurope,plustherefarmed900MHz/1800MHzspectruminEurope.


UpgradeStrategyandBenefitsofEarlyLTEDeploymentLTEBusinessmodelingThechoicesanoperatormakesinmanagingtheevolutiontomassmarketwirelessbroadbandwillhaveaprofoundimpactontheirfutureprospects,especiallygiventhehighlycompetitivenatureofwireless.Asanexample,wesuggestamodelbasedonLondondemographicsforanoperatorwithapproximately2Millionsubscribers,withmostata2Gor2.5Ggenreofapplicationsophistication,thatis,namelyvoice.Overaperiodofafewyears,thewirelessbroadbandpenetrationwillriseto85%.Formodelingpurposes,considertheaveragesubscriberdatademandsalong3scenarios:reachingeither1Gbyte,3GByte,and5GBytepermonthin2011,10%ofthattraffichappeninginanybusyhour.FifteenMHzof2.1GHzspectrumisallocated.

Figure8.Exampleoperatormodelwithdemographicsandbroadbanddatagrowth.

Considerfourpossiblestrategiesfortheevolutionofthisnetwork.

1. StaywithfullspeedHSPAanddeploy3carriers,addingcellsitesasneeded 2. DeployHSPAandmobileswithReceiveDiversity 3. DeployHSPAfollowedwithupgradetoHSPA+(mobilesin2010). 4. 5MHzofHSPA(Rx.Div)+10MHzLTEforin-bandmigration.

Theresultshavesignificantimplications,andsummarizedinafourchartillustrationshowingcellsiteproliferation.Theverticalscaleindicatesthenumberofcellssitesrequiredovertimeassubscriberpenetrationincreasesanddatatrafficperuseralsoincreases.Theinitialconditionsareasinglecarrieralreadydeployedat2.1GHzprovidingbasiccoverageacrossthemarket.

Thefirstcaseillustratesasimpledeploymentofupto15MHzspectrum.3.5Gtechnologiesaloneareunabletosupportaverageusertrafficof3ormoreGBytepermonth.

Thesecondcaseshowsadefinitereductionincellsiteproliferationwiththewidespreaddeploymentofmobileswithreceivediversity.Theintroductionofmobileswithreceivediversityearlyinthebroadbandramp-upincreasestheaveragesectorthroughputto3.4Mbps.Deferringtheintroductionofmobileswithreceivediversitywouldreducenetworkcapacity,aslegacymobilesstillrequireservice.Theimprovementtocapacityreducescellsiteproliferationofcapacitylimitedcellsites,andassumesthatreceivediversityhandsets(inadditiontodatacards)aredeployedearlyinthesubscriberuptakeof3.5G.


Thethirdcaseillustratestheeffectoffillingthesubscriberbaseduringthegrowthphasewithlegacymobiles.WhileHSPA+mobilesareintroducedin2010,thelegacydevicesdiluteoverallnetworkperformanceandresultsintheunwantedproliferationofcellsites.Thepresenceofthelowdataratelegacymobilesdilutingnetworkcapacityresultsintheoddcurve.ThefullbenefitsofHSPA+arerealizedasthosedevicesarereplacedwithnewermobiles.

Thefinalcaserepresentsanin-bandmigrationstrategythatminimizesinvestmentinthelegacytechnology,withtheforwardlookinginvestmentfocusedonLTE.LTEisthenintroducedin10MHzofspectrum,andworkingintandemwiththe3.5Gassets,meetsthetrafficdemandwhileminimizingcellsitesproliferation.

Figure9.CellSitesvstimefor4networkevolutionscenarios.

Withthecostofsite(bothOPEX/CAPEX)inlargeurbanareabeingsometimesashighas10xthecostoftheequipmentdeployed,onecaneasilyimagine,evenonthemostpessimisticdatagrowthscenario,howthecostofcellsplittingwillimpactoperatorson3.5Gtechnologycomparedtooperatorsthatwouldhaveupgradedto4GLTE.Modelingthemarketforecastsofdatauptakesuggeststhatinmanymarketsthe2.1GHzspectrummaybeexhaustedjustasLTEarrivesin20105.ThedeploymentofLTEinnewlyacquiredspectrumwilllargelyeliminatethecellsiteproliferationshownabove.

Motorolarecommendations

Theconvergenceofcompellingmobilessuitableforwirelessbroadbandandinternetaccess,widespreadacceptanceofcompetitivetariffs,andtheinevitableconsumerdemandformobilebroadbandsetsthestageforunprecedenteduptakeinwirelessdatatraffic,andtheexpectedspectrumcapacitycrunch in2009–2011.

Operatorscanbestpositionthemselvesby

1. Maximizingthecapacityoftheir3.5Gassetsbyupgradingtofullspeedinfrastructureandmobiles, `utilizeavailable2.1GHzspectrum,anddeploymobileswithReceiveDiversityearlyinthe3.5G uptakephase.Thiswillreapmostofthecapacityimprovementsandminimizecapital expenditureduringthemassmarketdevelopment.

5InformaWCIS,Motorolamodeling,andprivatediscussionswithoperators


2. Operatorsthatexhausttheir2.1GHzspectrumshouldconsidersupportingtheirmassmarket wirelessbroadbanddemandwithearlyadoptionofLTEinthe2.6GHzUMTSexpansions bandandotherbands(700MHzorAWSbands).

3. Operatorswithlarge2.1GHzspectrumassetscouldconsiderinbanddeploymentofLTE.

CompetitiveadvantagefavorsanearlymovetoLTEWhilesomeoperatorsmaynotconsiderLTEuntilafter2012,asignificantcompetitiveadvantagecanaccruetotheoperatorthatpursuesanearlymigrationtoLTE.Inadditiontohighbroadbanddataratesthatsubscribersalwayschase,andtheenormouscapacity,thefirstmovingearlyadopterofLTEwillbenefitbyhaveasignificantportionofsubscriberdatadeliveredviaLTE,thusavoidingspectrumexhaustionandtheresultingcellsplittingtohandlecapacityneeds.

Thisisillustratedwithalargeurbanandsuburbanmarketexample,atheoreticaloperatorwith10MHzofFDDspectrumat1.9GHz.Investigationscomparingvarioustechnologiesareexamined.Allexternalinputsareheldconstant(thatis,subscriberpricesensitivity,trafficdemand,subscriberpenetration,cellsiteacquisitionanddevelopmentcosts,spectrumallocation,etc).

Theprincipleobservations: • Reflectsconsumerpricesensitivity–existingsubscriberpenetrationwithwireless broadbandincreaseswithlowertariffs. • Networksbasedonlegacytechnologiesresorttocellsplittingtomanagetotal trafficdemand. • TheLTEoperatorhasanincentivetodecreasewirelessbroadbandtariffstomaximize thediscountedcashflow–uptothepointofcellsplitting.

Inpractice,theLTEoperatorwouldpickupconsiderablemarketsharebyexercisingtheeconomicadvantageofLTE.Thisincreasedmarketsharewouldchangethediscountedcashflowpropositiontoadifferentandoptimumpricepoint.

Figure10..LTECompetitiveAdvantage.Source:Motorolamodeling

12WHITEPAPER:UpgradeStrategiesForMassMarketMobileBroadband

Inthisfigure,theNetPresentValue(discountedcashflow,verticalscale,in$Millions)vs.Tariff(horizontalscale,in$/Month)intheupperleftchartillustratestheincentiveandcompetitiveadvantagefortheLTEoperator.Thesweetspothereisa$30foraflatratetariff.Undertheseconditions,legacyCDMAtechnologiesarenotcompetitivewith4GOFDMALTE.

ConclusionsAnumberofkeyobservationsnowappearobvious.

1) WirelessBroadbandadoptionisboomingduetotheconvergenceofwidespread3.5GNetworks andattractivetariffs. 2) WirelessBroadbandwillpenetratethemassmarketcoincidingwiththedeploymentofmainstream featurerichphonesandsmartphones. 3) Legacytechnologyupgradeswillofferincrementalcapacityimprovements,mostofwhichcanbe achievedwiththedeploymentofmobilereceivediversity. 4) LTEoffersamuchstrongertechnologybase(radioandnetworkarchitecture)forawireless broadbanddataenvironmentthatcangrowmuchmoreefficiently(TCO)asbroadband adoptionclimbs

5) Severalstrategiesareavailableforoperatorstoevolvetheirnetworks.EarlyadoptionoftheLTE scenarioseemstoofferthebestforwardlookingopportunity.

6) TheeconomicadvantagesofanearlymovetoLTEformeetingthemassmarketdemandwillgive significantcompetitiveadvantage.

FormoreinformationonMotorolaLTEandhowLTEcanhelpyougainacompetitiveadvantage,pleasetalktoyourMotorolarepresentative.

13WHITEPAPER:UpgradeStrategiesForMassMarketMobileBroadband

motorola.com

PartnumberWP-UPGRADESTRATEGIES.PrintedinUSA,01/09.MOTOROLAandtheStylizedMLogoareregisteredintheUSPatent&TrademarkOffice.Allotherproductorservicenamesarethepropertyoftheirrespectiveowners.©Motorola,Inc.2009.Allrightsreserved.Forsystem,productorservicesavailabilityandspecificinformationwithinyourcountry,pleasecontactyourlocalMotorolaofficeorBusinessPartner.Specificationsaresubjecttochangewithoutnotice.

upgrade strategies for mass market mobile broadband

Documents

withearlyado orevdorev

white paper upgrade

mass market mobile broadband

sourc consumerutilization

g 500umts4g gprs edge250gsm

penetrationsubs million3