Unwired insight


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Unwired insight

  1. 1. White Paper September 2009 3G networks will evolve, but will they cope? i U Unwired insight
  2. 2. White Paper i U Unwired insight Executive summary “Some operators This white paper is complementary to face the prospect the report ‘Will 3G Networks Cope?’ of 3G capacity published by Unwired Insight. shortfalls” ‘Will 3G Networks Cope?’ considers Dr Alastair Brydon the issues raised in this white paper in depth. 3G traffic volumes have increased So, some 3G operators face the prospect substantially since 2007, and this trend is of 3G capacity shortfalls, and the need to set to continue with many drivers for invest substantially to build many new further growth. As 3G traffic volumes base station sites and to acquire increase, 3G operators potentially face additional spectrum. massive challenges. There is a danger that 3G networks will quickly become 3G operators also urgently need to find swamped by traffic. complementary ways to deliver services to mobile users, making effective use of 3G enhancements, such as HSPA+ and WLAN access points, femtocells, mobile LTE, cannot come too soon. However, broadcasting solutions and sideloading. while HSPA+ and LTE promise substantial increases in peak data rates compared with HSPA, it is important to recognise that, in practical networks, these will not equate to similar increases in network capacity. 2
  3. 3. White Paper i U Unwired insight 3G traffic volumes have increased substantially since 2007 Since 2007, 3G operators and In March 2009, T-Mobile in the equipment vendors have reported Netherlands reported that total significant increases in cellular weekly usage of mobile data traffic volumes. services increased from 2.5TB (equivalent to 10.8TB per month) For example, in its Annual Report to 3.1TB (13.4TB per month) in the for the year ending December first half of 2008. In the second half 2008, TeliaSonera reported that of 2008, total weekly mobile data usage of mobile broadband and traffic increased from 3.1TB data had “exploded”. It stated that (13.4TB per month) to 20.5TB The report ‘Will mobile data traffic in its Nordic (88.8TB per month) - a 561% 3G Networks and Baltic operations increased by increase in six months. Total Cope?’ assesses nearly 500% in 2008. mobile data traffic increased about the traffic volume seven fold in the 12 month period increases As shown in Figure 1, total experienced by a to the end of 2008. monthly usage on all Hong Kong’s wide range of cellular networks has substantially operators and increased over the last six years vendors. (according to the Office of the Telecommunications Authority). Figure 1: Monthly cellular data usage in Hong Kong, 2002—2008 (Office of the Telecommunications Authority, Hong Kong) 3
  4. 4. White Paper i U Unwired insight Several factors will continue to drive 3G traffic volumes 3G traffic volumes will increase Proliferation of flat-rate service substantially in the next five years, bundles, with increasing usage driven by several factors. allocations. Mobile data pricing for traffic-intensive services is Increasing 3G penetration as becoming more affordable for users rapidly migrate from consumers, with a proliferation of 2/2.5G to 3G services. In most flat-rate tariffs for smartphones markets, the vast majority of and flat-rate mobile broadband mobile users are still supported by bundles, with generous monthly The report ‘Will 3G 2G (mainly GSM) networks, so 3G usage allocations. Pricing for some Networks Cope?’ networks are only supporting a mobile broadband services has provides a detailed minority of cellular users. Within fallen below USD2 per GB. assessment of the the next five years, the vast Consumers are increasingly drivers for 3G traffic majority of 2G customers of adopting mobile broadband volume increases. incumbent 3G operators will services as an affordable migrate to 3G services. alternative to fixed broadband. Increasing penetration of USB Increasing availability of easy- Changing service mixes, towards modems and datacards. The to-use data applications on usage-intensive services. Before increasing penetration of USB smartphones. Widespread the introduction of mobile modems to support mobile availability of usage-intensive broadband services and mobile TV broadband services will have a applications on 3G devices (for services, non-voice services were significant impact on 3G traffic example, Internet radio, catch-up dominated by services that do not volumes. With penetration of USB TV and YouTube) will drive 3G consume much network resource, modems and datacards well below traffic volumes. The advent of such as text messaging, games 10% in most countries, there is Apple’s App Store, which provides downloads and small-screen significant potential for further an easy way for iPhone users to (WAP) browsing. With an growth. PC applications generally choose and download third-party increasing penetration of USB consume substantially more data applications is already being modems and smartphones, the than basic mobile phones, with substantially improved. In April mobile service mix will continue to usage of several gigabytes per 2009, Apple announced that its change considerably. Over time, the month per device possible. one billionth application had been mobile service mix will have a downloaded from its App Store. Increasing penetration of greater proportion of usage- smartphones. With the success of intensive services, such as full- Increasing usage of 3G devices smartphones such as Apple’s screen Web browsing and video indoors. Mobile users have been iPhone, the number of streaming. increasingly using their mobile smartphones has been increasing phones instead of fixed phones to significantly year-on-year, and this Improving performance of make voice calls. Many will access growth is set to continue. By 2014, cellular networks, with the Internet services and a range of there will be nearly three times the introduction of 3G enhancements multimedia on their phones, even number of smartphone shipments (such as HSPA+ and LTE). 3G when they could access such globally as there were in 2008. enhancements will provide users services using a PC. Orange has Recently, T-Mobile reported that with much greater peak speeds, stated that 40% of mobile TV iPhone users surf the Web 30 to 40 which will better support usage- usage in France takes place in the times more than other mobile data intensive services, thus helping to home. users. drive 3G traffic volumes. 4
  5. 5. White Paper i U Unwired insight It is now important to understand and quantify future 3G traffic volumes To determine whether or not 3G • the specific services users • the availability of networks will be able to cope with consume and the usage levels broadcasting networks to future traffic growth, it is of those services deliver certain types of necessary to quantify the traffic content, such as TV and radio, volumes that 3G macrocell • the traffic intensity of each networks will carry. This is very service (with big differences and the proportion of complex, because the traffic between services) multimedia content that is carried by 3G networks is affected carried by broadcasting by many factors, including: • the split of indoor and outdoor networks. usage • the total number of 3G devices We have developed a • the proportion of indoor comprehensive service and traffic • the types of 3G devices used, wireless service usage that is model, illustrated in Figure 2, to which include basic phones, carried by indoor systems derive forecasts for 3G traffic. Our smartphones and USB modems and datacards • the proportion of service modelling reveals that 3G traffic content that is sideloaded to 3G volumes could increase by more mobile devices than 20 times by 2014. Figure 2: Structure of service and traffic model developed by Unwired Insight 5
  6. 6. White Paper i U Unwired insight Service content will not necessarily all need to be carried on 3G networks In order to accurately determine Mobile users with access to fixed the volumes of traffic that 3G broadband services have additional networks will need to carry, it is methods for the delivery of important to translate the services services. These are indoor systems that mobile users will actually use (WLAN access points or 3G to the amount of traffic that will be femtocells) and sideloading. generated on 3G networks. This must take account of the fact that 3G operators are planning to some services may be delivered deploy (or are in the process of using complementary methods, as deploying) femtocells. The report ‘Will 3G shown in Figure 3. Networks Cope?’ The models developed by Unwired forecasts traffic Mobile broadcasting technologies, volumes for the period Insight take account of the 2009—14, broken such as DVB-H, DMB, IMB and alternative delivery methods that down into individual MediaFLO, could deliver may be employed, to avoid delivery methods multimedia content (notably overestimating the volume of (including broadcasting mobile TV and radio) to 3G devices traffic that 3G networks will need networks and equipped with appropriate to support. femtocells). broadcasting receivers. Figure 3: Distribution methods for delivery of services and content to 3G devices 6
  7. 7. White Paper i U Unwired insight A small number of services will have a disproportionate impact on traffic volumes In order to accurately determine For example, video streaming the volumes of traffic that 3G consumes about 26 times the networks will need to carry, it is network capacity of voice important to account for the telephony. Similarly, a mobile differences between services in the broadband customer using 1GB per amount of traffic they generate. month consumes the equivalent network capacity of over 7000 Different services have vastly minutes of voice telephony. different characteristics in terms of the network capacity they In contrast, an SMS message consumes a tiny fraction of the In the report ‘Will 3G consume. We refer to this Networks Cope?’ network capacity of a one-minute characteristic as the ‘traffic voice call. individual services intensity’. are modelled, with Over time, mobile broadband quantification of the A small number of services number of megabytes services and video services will of traffic realistically (including mobile broadband account for an increasing generated by each access and video services) will proportion of total traffic. service. have a disproportionate impact on wireless traffic volumes. Table 1: Data consumption for a range of mobile services Service Data consumed Typical terminal(s) 1-minute voice call 0.14MB Basic phone and smartphone SMS message 0.00015MB Basic phone and smartphone Ringtone/logo download 0.002MB Basic phone and smartphone Game download 0.025MB Basic phone and smartphone MMS message 0.01MB Basic phone (equipped with a camera) and smartphone 1-minute WAP small-screen browsing 0.065MB Basic phone and smartphone 1-minute Web browsing 0.20MB Smartphone 1-minute high-quality audio streaming 0.94MB Smartphone (128kbps) 1-minute high-quality video streaming 3.66MB Smartphone (500kbps) Mobile broadband access (typical user) 0.5–1GB per USB modem/datacard month 7
  8. 8. White Paper i U Unwired insight 3G networks will continue to suffer capacity constraints despite 3G enhancements Many are looking to 3G There is growing momentum example, mobile users located enhancements to boost network behind HSPA+, and a number of 3G very close to a base station). capacity to be able to support operators (including Mobilkom, However, even with 3G future traffic demand. As shown in Telecom Italia, Vodafone and enhancements, mobile users that Table 2, there are a number of AT&T) have announced their experience very poor signal enhancements planned. intention to deploy the technology conditions will continue to in 2009. LTE deployments will start achieve relatively poor data rates. 3G enhancements will provide in 2010, with over 30 operators users with much greater peak already committed to LTE. It is only a lucky few within a base speeds, which will better support station coverage area that will usage-intensive services, thus A key feature of 3G enhancements experience data rates anywhere helping to drive 3G traffic volumes. as they progress from HSPA to LTE near the peak rates possible. While HSPA has been deployed on is a significant increase in peak These lucky few will, however, a widespread basis (by more than data rates, where a base station increase average throughput 95% of W-CDMA operators), the attempts to maximise the data rate delivered by the base station, attention of mobile network to end users that experience although by nowhere near the operators will focus on HSPA+ and excellent radio conditions (for magnitude suggested by the peak LTE. data rates. Table 2: Characteristics of W-CDMA, HSPA, HSPA+ and LTE Technology Description Peak downlink speed Peak uplink speed per Timescale per user user W-CDMA First version of UMTS Up to 384kbps (using Up to 384kbps (using First network 5MHz of spectrum) 5MHz of spectrum) deployed in 2001, with widespread roll-out from 2003 HSDPA Enhancement that Up to 14.4Mbps Up to 384kbps (using Available from mid- significantly (using 5MHz of 5MHz of spectrum), 2005 and deployed by increases downlink spectrum) which is the same as most W-CDMA speeds basic W-CDMA operators by the end of 2007 HSUPA Enhancement that Up to 14.4Mbps Up to 5.76Mbps (using Available from 2007 significantly (using 5MHz of 5MHz of spectrum) increases uplink spectrum) speeds HSPA+ Further improvement Up to 42Mbps (using Up to 11.5Mbps (using Available from 2008 to HSDPA/HSUPA, 5MHz of spectrum) 5MHz of spectrum) which utilises smart antenna technology LTE Major enhancement, Up to 45Mbps (using Up to 13Mbps (using Available from late which can use wider 5MHz of spectrum) 5MHz of spectrum) 2009/early 2010 allocations of Up to 326Mbps Up to 326Mbps (using spectrum than (using 20MHz of 20MHz of spectrum) HSDPA, HSUPA and spectrum) HSPA+ 8
  9. 9. White Paper i U Unwired insight Some 3G operators will face capacity problems in 2010 Our modelling reveals that there are The effect of shortfalls of capacity significant differences in the outlook will be that service users will for different types of 3G operator. experience degradation in the quality Some will face major problems, with of service provided by a 3G operator, their HSPA networks having particularly at times and locations at insufficient capacity in the short which the network is heavily used. term to meet future traffic demands. In contrast, new-entrant 3G As shown in Figure 4, some operators will not suffer from severe incumbent 3G operators with large short-term limitations of HSPA The report ‘Will 3G Networks customer bases will face HSPA capacity, and will have a two-year Cope?’ assesses capacity shortfalls in mid-2010, or window of opportunity to the outlook for even earlier if customers migrate aggressively promote mobile different types of mobile network rapidly from 2/2.5G to 3G services. broadband services. operator. Figure 4: HSPA network capacity per device and forecast traffic per device for a 3G operator, for a modelled scenario, 2008–2014 9
  10. 10. White Paper i U Unwired insight There are big challenges ahead Our modelling shows that 3G Incumbent 3G operators must avoid operators will face a constant competing aggressively with the challenge to provide adequate mobile broadband services offered network capacity to keep ahead of by new-entrant 3G operators. Short- future traffic demand. term actions that they should consider are: LTE will be an essential upgrade. Given that 3G operators will need to • avoidance of very low prices dedicate spectrum to support legacy and/or very high monthly usage HSPA devices and W-CDMA voice allowances for mobile broadband telephony services, there will be a services significant challenge to secure The report ‘Will 3G additional spectrum for LTE, • application of fair-usage policies Networks Cope?’ particularly for incumbent 3G and/or service restrictions identifies actions operators will large customer bases. for a wide range of • slowing down the migration of organisations. Furthermore, HSPA+ will need to be customers from 2/2.5G to 3G deployed on a widespread basis, services. because it allows data services to be carried more efficiently than HSPA. Incumbent 3G operators must also HSPA+ also allows circuit-switched pursue complementary ways to voice to be carried more efficiently deliver services to mobile users, for than basic W-CDMA. example using WLAN, femtocells and mobile broadcasting networks. 10
  11. 11. White Paper i U Unwired insight Buy the report ‘Will 3G Networks Cope?’ Since 2007, 3G networks worldwide have Will 3G Networks Cope? answers your key experienced substantial traffic growth, due to questions: strong take-up of mobile broadband services and the initial migration of 2/2.5G users to 3G • How will the service mix on a range of 3G services. Operators have reported annual devices (basic phones, smartphones and USB increases in 3G data traffic volumes of 300— modems/datacards) evolve over the next 700%. five years? • By how much will 3G traffic volumes While 3G traffic volume increases have been increase in the next five years? manageable so far—because volumes have increased from very low levels—we forecast • What capacities will HSPA, HSPA+ and LTE further large traffic volume increases, due to networks realistically provide? rapid migration of 2/2.5G users to 3G services, • Will 3G network capacity keep up with increasing proportions of smartphones and traffic volume increases? When will HSPA USB modems/datacards, and the introduction networks run out of capacity? of HSPA+ and LTE. • When will HSPA+ and LTE be necessary, and For some 3G operators, today’s HSPA what spectrum will be required? networks will not support 3G traffic volumes for long, and they have big decisions to make. • What are the implications for different types of 3G operator? Why you need this report What you get • The risks are huge. 3G volumes • 120 pages, 35 figures, 24 tables are increasing dramatically and 30 000 words. and HSPA networks may not • Usage forecasts for 2009— be able to support these 2014 derived from a increases for long. comprehensive usage model. • This report is unique in • Network capacity forecasts for bringing together forecasts for HSPA, HSPA+, LTE and LTE- 3G traffic volumes and Advance, for different network capacities. spectrum allocations and • The report identifies the deployment scenarios. technologies 3G operators • Modelling of complementary should invest in, and when. delivery mechanisms to 3G • It quantifies how much macrocells, including WLAN spectrum will be required, and access points, femtocells, when. broadcasting networks and sideloading. • The report defines the best strategy for different types of • Evaluation of different types of 3G operator. 3G operator. 11
  12. 12. White Paper i U Unwired insight About Unwired Insight With operators making multi-billion pound We can help you in four core areas: investments in wireless technology and • Investment decisions. We can help with spectrum, the risks of making the wrong critical investment decisions, where the risks decisions are huge. are high. We provide comprehensive, independent evaluation of wireless Wireless technologies are becoming more technologies, including HSPA+, LTE, WiMAX complex and the demand for new wireless and mobile TV broadcast technologies. services is becoming more uncertain. • Business cases. We develop robust We can help, by offering a range of products business cases for wireless technology and and services, including: service deployment. Recent examples include business cases for 3G evolution, indoor base • strategic advice stations, WiMAX and fixed broadband • custom research services for mobile operators. • expert witnesses • Network and service models. Through the • reports. development of advanced wireless network and service usage models, we are able to We have gained a reputation as experts in provide unique insight into the practical wireless technologies and services. We offer capacity, cost and capabilities of wireless unique insight and new perspectives by networks. bringing together in-depth knowledge of wireless technologies and end-user • Intellectual property. With in-depth behaviour. Over 100 companies worldwide knowledge of wireless standards and related have benefited from our specialist patents, we can help you exploit, and protect, expertise. Please contact us to discuss how the value of your intellectual property. we can help you. Published by Unwired Insight Limited, Huntingdon Business Centre, Blackstone Road, Huntingdon, Cambridgeshire, PE29 6EF, UK. Telephone: +44 (0)1480 819391 Email: contact@unwiredinsight.com Web site: www.unwiredinsight.com Registered in England No. 4266655 Disclaimer. All reasonable care has been taken in the compilation of this white paper. The information, opinions and analysis contained in this white paper are based on sources believed to be reliable, but no representation, expressed or implied, is made to its accuracy or completeness. The opinions contained in this white paper reflect our current judgement and are subject to change without notice. Unwired Insight Limited shall not be under any liability for loss or damage as a result of the use of this white paper. © Unwired Insight Limited 2009 12