Signalsflash070113 LTE World Summit Key take aways


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Signalsflash070113 LTE World Summit Key take aways

  1. 1. Dispatches from the frontier of wireless research July 1, 2013 SETTING THE STAGE FOR LTE-ADVANCED AND CARRIER AGGREGATION (plus updates following the LTE World Summit)
  2. 2. 2  |   SignalsFlash  February 21, 2013 EXECUTIVE SUMMARY Last week we attended the LTE World Summit in Amsterdam. In this special issue of Signals Flash! we provide some highlights and key takeaways from the event. Apologies for being late on our next Signals Ahead report, but we’ve got numerous things in the works – just nothing ready to print. A pending trip to the East where we plan to dine on Bee-Bim Bop along with doing other activities that should be of more interest to our readers won’t help matters any… Key Highlights ➤➤ The availability of LTE-Advanced, specifically carrier aggregation, will result in more effective spectrum utiliza- tion and help level the playing field between the 20 MHz Have’s and Have Not’s. ➤➤ VoLTE was a hot topic with more commercial launches likely last this year and into 2014. ➤➤ Roaming via LTE is looming, or at least the technical barriers are coming down. ➤➤ Network innovation driven by virtualization (Cloud RAN, SDN, etc.) and technology enablers like 4x4 MIMO are occurring concurrently with the move to LTE-Advanced. ➤➤ Small cells are big. ➤➤ The business case for LTE looms large with most operators.
  3. 3. 3  |   Signals Flash  July 1, 2013 Unlike our more in-depth Signals Ahead research reports, there are not any restrictions associ- ated with the redistribution of this document. Recipients of Signals Flash! may share this docu- ment, including all typos and grammatical errors that are only natural when working at 30,000 feet, both internally within their organization and externally with reckless abandon. In fact, we encourage it! In addition to providing near-real-time commentary and analysis of industry note- worthy events, Signals Flash! provides readers with a summary of past and planned research reports that we offer through our subscription-based Signals Ahead research product. We have also taken the opportunity to promote a couple of our most recent reports for readers of this Signals Flash! who don’t subscribe to Signals Ahead. SETTING THE STAGE FOR LTE-ADVANCED AND CARRIER AGGREGATION 1) The availability of LTE-Advanced, specifically carrier aggregation, will result in more effective spectrum utilization and help level the playing field between the 20 MHz Haves and Have Nots. Last week, SK Telecom announced that it had launched commercial LTE-Advanced services, specifically carrier aggregation, throughout much of greater Seoul and other important regions in South Korea with plans for even greater coverage later in the year. We believe that the LGU+ carrier aggregation launch is imminent followed by Korea Telecom (KT). All operators are using the Samsung Galaxy S4 with the Qualcomm Snapdragon 800 chipset, which suggests that Samsung reverted, at least temporarily, back to Qualcomm for its in-country chipset requirements. Previously, we were of the understanding that Samsung was using an inter- nally-developed chipset in the S4 for the domestic market, just as it used its own chipset for the Galaxy S3. We know all credible LTE chipset suppliers have near-term CA aspirations and Samsung and LG (thanks to government financial backing) should support the feature in their commercial chipsets, perhaps by the end of the year. Intel could surprise with an earlier than anticipated market entry and Broadcom is heavily focused on the feature. We’ve yet to test Broadcom’s Release 8 LTE solution so we will withhold judgment on their LTE capabilities for the moment. Many chipset suppliers are initially targeting 10 MHz + 10 MHz implementations of carrier aggre- gation, and this is evident in the Galaxy S4. Sequans is one chipset supplier that is initially focused on 20 MHz + 20 MHz – it demonstrated the capability earlier this year at MWC. This means that the peak end user throughput is “limited” to 150 Mbps with a Category 4 device. Worth noting, in addition to being the industry’s first LTE-Advanced smartphone/device, the Galaxy S4 is also the industry’s first commercially-available Category 4 device. With a 20 MHz + 20 MHz implementa- tion, peak speeds of 300 Mbps are possible, just as peak speeds of 300 Mbps are possible with 4 x 4 MIMO in a 20 MHz channel. Although chipset support for a 20 MHz + 20 MHz implementation sounds great on paper, there isn’t a major pull from the market forces. By and large, the operators with the largest LTE deploy- ments only have channel bandwidths of 10 MHz while in some cases the channel bandwidths are limited to 5 MHz. Something like 90% of all LTE subscribers belong to operators that fall into this category. The 5 MHz limitation is true for AT&T in certain markets, including Chicago, and we believe it is also true for one of the bands that NTT DoCoMo currently supports with LTE. In the case of the South Korean operators, SK Telecom has deployed LTE at 800 MHz and 1800 MHz, KT The LTE networks with the largest number of subscribers are generally limited to no more than 10 MHz of contiguous spectrum.
  4. 4. 4  |   Signals Flash  July 1, 2013 has deployed LTE at 900 MHz and 1800 MHz, and LGU+ has deployed LTE at 800 MHz and 2100 MHz. All deployments are limited to no more than 10 MHz of contiguous spectrum. For these operators, carrier aggregation allows them to compete on a more level playing field with their peers. In the case of AT&T, for example, it must compete with Verizon Wireless, despite the latter operator having 10 MHz channel bandwidths in all of its markets. In many parts of the country, AT&T also lacks the virgin 1700 MHz spectrum that it relinquished to T-Mobile following its failed merger attempt. If it had retained the spectrum, it might have been able to deploy a 10 MHz LTE carrier. AT&T had between 5 MHz and 15 MHz of paired spectrum at 1700 MHz across the entire country prior to giving a lot of the spectrum to T-Mobile. We haven’t done the analysis to determine what it currently has and where it has it, but we surmise that its ability to deploy LTE in 2 x 10 MHz of contiguous spectrum has been greatly diminished, barring any pending spectrum deals that may be in the works. In addition to leveling the playing field, carrier aggregation provides an operator with the ability to do fairly dynamic load balancing between its noncontiguous bands of LTE. In effect, the mobile device is simultaneously connected to both radio channels and receiving as much resources as the network will schedule it, albeit on two independent radio carriers, versus a single radio carrier. It is up to the operator to determine how much bandwidth to assign to each mobile device, but presumably it is in the operator’s best interest to allocate as many resources as possible on both radio carriers in order to get the mobile device off the network. Load balancing could still be done via SON or using a solution, such as Huawei’s Single Radio Controller (SRC), but it wouldn’t be as dynamic and it would require inter-frequency handovers. To a large degree, this capability is the most compelling advantage of carrier aggregation. The operator receives a direct benefit while the end user receives an indirect benefit. We demon- strated as much in our initial drive testing of DC-HSDPA versus HSPA+ and we’ll be demonstrating the same thing when we publish our drive test report on carrier aggregation in the not-too- distant future. The possibility for higher peak data rates sound exciting, and it is, but depending on the use case the typical mobile data consumer may not notice the difference. Worth noting, with the simulta- neous introduction of CA and Cat 4 devices the theoretical peak data rates for nearly all existing LTE subscribers increases from ~75 Mbps to ~150 Mbps. In our user experience drive test report that we published back in 2011 (SA 10/19/11, “Quantifying the User Experience”) we demonstrated that higher data rates didn’t necessarily lead to a better user experience. For example, web pages won’t load any faster once the throughput is higher than a few Megabits-per-second, and users probably won’t discern the fractional second savings with other transactions that involve the amount of transferred data in a typical transaction. With the current implementation of carrier aggregation the aggregation only occurs in the downlink so uploading a video to YouTube will take just as long as it previously did. Obviously, the impact will be evident when using Speedtest. net, and this outcome is great for marketing purposes. In other cases, higher throughput will matter and it will have a material impact on the user experi- ence. This situation could occur at the cell edge or when challenging RF conditions exist. When network congestion is present, the benefits of the second radio carrier should also be evident to the end user when dealing with applications that require somewhat higher bandwidth. In all cases, carrier aggregation will definitely benefit the end user when downloading large files and other multimedia content, such as movies from iTunes, but very few consumers find themselves in this Dynamic load balancing of LTE traffic between different radio channels is the most compelling benefit of carrier aggregation. With the simultaneous introduction of CA and Cat 4 devices the theoretical peak data rates for nearly all existing LTE subscribers increases from ~75 Mbps to ~150 Mbps. Higher throughput will matter at the cell edge or when any challenging RF conditions exist, not to mention when network congestion exists.
  5. 5. 5  |   Signals Flash  July 1, 2013 situation due to operator tariff plans that limit them to only a few GB per month. Nothing beats blowing a monthly allotment due to downloading a high definition version of Despicable Me 2. Work in the standards bodies and commentary from operators at the LTE World Summit indicate that carrier aggregation is moving in other directions as well. From a standards perspective, there are efforts underway to logically combine 3 noncontiguous bands, for example 700 MHz, 1700 MHz and 1900 MHz (North America) or 800 MHz, 1800 MHz and 2600 MHz (Europe and Asia). This is all fine and good, but our suspicion is that most operators would rather have RF front end complexity applied to supporting more discrete bands for roaming with a single device. Although also defined in the standard, the ability to support carrier aggregation from two geographically separated cells – for example, involving a macro cell and a small cell – is closer to reality. One of the vendors (we believe it was Huawei or Samsung) highlighted that it had already demonstrated the capability and we know that other vendors have also invested effort in this area. In theory, the concept sounds compelling and it is very comparable to HSPA+ Multiflow, which NSN and Qualcomm demonstrated earlier in the year at MWC. However, we believe the practicalities of deploying the capability will somewhat limit its adoption in the near-term. Close coordinated scheduling is important to make the feature work well, and this requirement implies the need for dark fiber and a centralized scheduler (a.k.a. cloud RAN). The most likely deploy- ment scenarios are, therefore, markets in Asia or dense network deployments in other parts of the world where there is ample dark fiber. Large stadiums come to mind. At the show there was a lot of talk about carrier aggregation and it is evident that many operators, including Verizon Wireless and EE are trialing the technology with commercial launches planned for the coming year. Some operators, however, need to wait until chipsets support channel bandwidths that are greater than 10 MHz. TeliaSonera, for example, indicated that it has at least 15-20 MHz radio channels in all of its markets so if it deployed carrier aggregation based on the capabilities of existing solutions, it would have to reduce the channel bandwidth for all legacy devices. In other words, not only would it not gain anything by deploying carrier aggregation it would also have to sacrifice performance for most of its installed base of devices. 2) VoLTE was a hot topic with more commercial launches likely late this year and into 2014. Not surprisingly, VoLTE was a hot topic at this year’s event. ALU started things off with its pre-event analyst dinner where the focus was entirely on VoLTE (and eating). First off, it was interesting and encouraging to witness ALU have such a strong presence at the event – an event where we believe Ericsson was 100% absent and NSN only had a modest showing in a nonofficial capacity. ALU, like its peers, highlighted many of the benefits of VoLTE and that while implementing the new service won’t be easy, the benefits will outweigh the challenges. We also agree with ALU that the last two years it spent working with AT&T and Verizon Wireless with their VoLTE deployments will give them an advantage over many of their peers. This advantage, however, is only in the near-term and it will need to capitalize on its early frontrunner status. The benefits of VoLTE, according to ALU and others, include the following: ➤➤ Higher capacity (~6x GSM and ~3x UMTS) ➤➤ Better voice quality with AMR-WB The ability to support carrier aggregation from two geographically separated cells – for example, involving a macro cell and a small cell – is closer to reality. Some operators need to delay their carrier aggregation plans until chipsets support channel bandwidths that are greater than 10 MHz.
  6. 6. 6  |   Signals Flash  July 1, 2013 ➤➤ The ability to free up more spectrum that would otherwise be needed for legacy 2G/3G voice services ➤➤ Faster call setup times versus CSFB ➤➤ Significantly better data performance during a call ➤➤ Potentially much better data performance after a call – the phone sometimes takes up to 10 seconds in the Idle state to return to LTE ➤➤ The introduction of new services ($$$) that leverage a combination of VoLTE, IMS and WebRTC MetroPCS claims to have launched “VoLTE,” but from what we understand the launch is limited to the Dallas market and devices aren’t widely available, if at all. LGU+ and SKT have launched VoLTE, although some vendors have questioned whether or not it is fully standards compliant, without fully explaining why they think it isn’t true VoLTE. Nonetheless, SKT and Samsung were able to demonstrate a much faster call setup time – a couple of seconds at most versus nearly 10 seconds with CSFB. Looking ahead to later this year, AT&T will likely lead the charge with VoLTE launches in at least a couple of regions later in 2013, followed by Verizon Wireless in 2014. In order for VoLTE to become a reality most operators will need SRVCC to enable relatively seamless handovers during a voice call when the mobile device moves outside of LTE coverage. Orange, for example, reiterated the importance of SRVCC and after having spent the weekend “drive testing” in the Loire Valley we can confirm that LTE doesn’t exist. We were lucky to find 3G and in many cases we had to rely on EDGE to download Google Map navigation directions. For this reason, it is a bit surprising that AT&T plans to launch in advance of Verizon Wireless given that the latter operator has better coverage. The consensus opinion is that operators will not be able to charge for VoLTE services and that voice will be bundled with their data services. In the US, operators are already beginning to bundle voice with their data services, or at least allow free mobile to mobile calls, so this outcome wouldn’t be as dire as it sounds. However, in other markets operators are still charging for their voice services. We are not completely convinced that operators won’t be able to get something incremental for delivering voice services versus OTT, but it will all depend on how they market their services and the data bundles that they offer. For example, the operator’s self-branded voice service might only be offered with certain data packages – data packages that were more expensive and which included other features and capabilities. Consumers could still go with OTT applications, like Skype, but the call quality wouldn’t necessarily be as compelling and there would be a greater impact on battery life since the OTT application would run on the application processor while the VoLTE client would remain on the baseband modem. Then again, the operator doesn’t want its churn to increase so if one operator gives away VoLTE the other operators will have to follow. One interesting observation that one vendor made is that when it comes to international roaming voice calls, VoLTE will be inherently less expensive than an OTT application, such as Skype. This result is because the data traffic must be routed back to the home operator’s network (also higher latency) while the VoLTE traffic would remain in-country unless the call was placed to an international number. This phenomenon could allow operators to introduce a pricing plan that In order for VoLTE to become a reality most operators will need SRVCC. We are not completely convinced that operators won’t be able to get something incremental for delivering voice services.
  7. 7. 7  |   Signals Flash  July 1, 2013 IN CASE YOU MISSED IT: SIGNALS AHEAD BACK ISSUES ➤ 5/28/13 “What’s the PSC, Kenneth? (Quantifying the need and benefits of interference cancellation solu- tions in a 3G network)” We provide insight into the amount of interference that exists in a 3G network, its potential impact on data rates and network efficiency, and how an advanced equalizer can be used to maximize performance when these challenging conditions exist. For purposes of this report, we used AT&T’s HSPA+ network in San Francisco and the surrounding vicinity. This report was done in collaboration with Accuver who provided us with its XCAL and XCAP drive test solutions. ➤ 4/25/13 “Everything under the SON” We discuss the background of SON, including discussions of work within NGMN, 3GPP and the SOCRATES/SEMAFOUR projects. We also cover the basics of SON including the laundry list of SON-like features, explain how they work, and what they mean for operators and vendors. We then move on to discuss the present and future requirements of SON, including what may be in store with Release 12 and beyond. Finally, we discuss the motivations and challenges of SON, including multi-vendor integration, vaguely-defined use cases, OSS limitations, 3G SON, and centralized versus decentral- ized architectures. ➤ 3/22/13 “Rich Communication Services - reinventing voice and messaging” In this issue of Signals Ahead we provide a detailed analysis of RCS. In addition to providing the history of RCS since its introduction in 2008, we examine why operators have not yet fully adopted it, the capabilities by release, the inherent challenges that exist, the business relationships that exist or at least should exist, and the opportunities that could allow operators to beat the OTT providers at their own game. ➤ 2/25/13 “Chips and Salsa XVI: Sweet 16 and never been benchmarked” This report provides performance benchmark analysis of 8 LTE baseband chipsets, including Altair, GCT, Intel, NVIDIA, Qualcomm, Renesas Mobile, Samsung, Sequans. This benchmark study marks the 8th time that we have collaborated with Spirent Communications to leverage its 8100 test system and engineering support. All chipsets performed well under less chal- lenging conditions but with the more challenging conditions there was a wide variance in the results with more than a 20% difference between the top- and bottom-performing chipsets. Three chip- sets vied for top honors but ultimately we had to declare one the winner. ➤ 01/23/13 “The Mother of all Network Benchmark Tests - On the Inside Looking Out: evaluating the in-building performance capabilities of commercial LTE networks (Band 4, Band 7, Band 13, and Band 17)” With the continued support of Accuver, we leveraged its XCAL-M drive test solution and its enhanced support for in-building testing to evaluate the performance of four LTE networks at Band 4, Band 7, Band 13 and Band 17.  In this report we quantify the amount of LTE network traffic that we observed in the outdoor macro network and how it compares with our in-building testing. We also demonstrate that 700 MHz isn’t a panacea for in-building coverage, that potential coverage problems are being masked by ample capacity, and that some in-building networks may not scale to support future traffic demands. Finally, we compare and contrast the performance of the VZW and AT&T LTE networks. ➤ 12/5/12 “LTE Band 7 versus LTE Band 4 - GAME ON!” With the support of Accuver, we used its XCAL-M and XCAP drive test solutions to conduct a network benchmark study of LTE Band 7 and LTE Band 4. This benchmark study leveraged the Rogers Wireless network in Vancouver, Canada where they have deployed both frequency bands in virtually every single cell site. In addi- tion to looking at basic throughput, we include a host of other device-reported KPIs to analyze the downlink and uplink perfor- mance characteristics of the two frequency bands under identical network conditions, including edge-of-of cell and in-building. ➤ 11/6/12“M2M–towardtheInternetofthings”Weanalyze the M2M landscape and some of the key players involved in real- izing this vision.  The business models for M2M are still in flux and eventually multiple business models will have to be implemented. We look at the new business models being explored by mobile operators and MVNOs.  The global connectivity requirements of M2M services make it natural fit for cloud services so there will need to be new cloud platforms in both the operator networks and enterprises to support M2M services.  We also analyze the requirements and vendors for such platforms.  More importantly, the radio and core networks will require enhancements to support the deluge of new M2M connections.  We discuss some of the major issues and how the 3GPP standards body and operators are planning to address these issues. ➤ 10/15/12 “Lost and Found” As a follow-on report to Chips and Salsa XV, we examine the real world A-GNSS performance capa- bilities of leading smartphones. We also evaluate the performance attributes of the most popular navigation applications, including the amount of data traffic they generate, the length of time the smartphones remain connected to the network, and the amount of signaling traffic that they generate. Ultimately, we conclude that there are fairly dramatic performance differences for both the A-GNSS platforms and the navigation applications that have user experience and network implications. ➤ 9/13/12 “Chips and Salsa XV - Disparately Seeking Satellites” In collaboration with Spirent Communications, we provide the industry’s first independent analysis of A-GNSS platforms. The study includes conducted tests of vendor supplied A-GPS and A-GNSS (A-GPS + GLONASS) solutions and over-the- air testing of several leading smartphones. We demonstrate that while the performance across the platforms is largely comparable, there are significant differences in the performance of the solu- tions once they are implemented in the smartphone. ➤ 8/20/12 “The B Side of LTE - when your ‘A Game’ just isn’t good enough” We take a look at many of the proposed features being considered for 3GPP Release 12 and beyond, including advancements in the use of small cells, higher order MIMO and modulation schemes, 3D beamforming, network optimization, machine type communication, and device to device discovery and communication.
  8. 8. 8  |   Signals Flash  July 1, 2013 makes VoLTE more attractive to consumers than Skype yet the operator still comes out ahead because its network delivery cost is lower. 3) Roaming via LTE is looming, or at least the technical barriers are coming down. Operator business cases and roaming agreements still need to be reached while the need for multi-band devices is paramount. By and large, LTE data roaming doesn’t exist. For most operators there are two primary reasons – mobile devices don’t exist which support the hodge-podge of frequency bands where LTE has been deployed and operators have yet to establish the business relationships. TeliaSonera is an example of an operator that currently supports data roaming via LTE, although the roaming is limited to a couple of different combinations involving only three of its properties (Norway, Denmark and Sweden). On the bright side, the operator doesn’t charge data roaming fees with some of its plans. If, for example, a subscriber in Sweden has a 5 GB plan and he uses 5 GB in Norway there wouldn’t be any additional data charges. This policy is consistent with what the European Union is attempting to do throughout the 27-bloc European Union. Personally, we are not convinced that data roaming charges should be abolished, but conversely we hate paying the exorbitant rates that we are currently charged when we only use a token amount of data. TeliaSonera International Carrier also signed a deal with iBasis (KPN), which, among other things, will tie together the two carriers’ signaling infrastructure and data centers. This arrangement will make it technically possible to cross-connect LTE voice calls that go across both carriers’ networks. Given that iBasis has agreements with Verizon, Vodafone, China Mobile, Telefonica and TIM, to name a few, the agreement is pretty far reaching. Even after the operators sign roaming agreements they will still need compatible handsets to support true global roaming via LTE. Subscribers with an LTE handset that supports Band 3 (1800 MHz) should fair the best when traveling abroad given that the band probably has, or will soon have, been deployed in the most countries, but anyone traveling to and from the US and Asia/ Europe will struggle for the foreseeable future. To some extent it is in the interest of operators to drive the industry to support more bands in mobile devices and innovations in the RF front end are helping in that regard. But from our perspective, we can’t afford more than 20-50 MB of international data roaming at today’s rates, which equates to no more than 4 seconds of data usage with an optimal data connection – realistically we might get as much as 16 seconds. In all seriousness, HSPA+ and DC-HSDPA, along with Wi-Fi, should more than suffice for most international data usage. We’ll get interested and excited about LTE data roaming when the tariffs are reasonable and/or we win the lottery. 4) Network innovation driven by virtualization (Cloud RAN, SDN, etc) and technology enablers like 4x4 MIMO are occurring concurrently with the move to LTE-Advanced. Separate from the evolution of the standard, operators and vendors were actively discussing various innovations within the standard that can allow them to achieve additional efficiency. These incremental efficiencies are critical since data usage continues to escalate while the mix of data traffic is constantly changing. Figure 1 shows the distribution of data traffic on SK Telecom’s TeliaSonera is an example of an operator that currently supports data roaming via LTE. With today’s international roaming rates, we can’t afford more than 4 seconds of data usage under ideal LTE conditions. On SKT’s network the average mobile data traffic per user increases from 1.1 GB to 2.1 GB per month with LTE.
  9. 9. 9  |   Signals Flash  July 1, 2013 network and how it varies between LTE and 3G devices. Not surprisingly, the percentage of multi- media traffic increases with LTE (from 39.0% to 42.8%) and the percentage of Web browsing traffic decreases with LTE (from 39.4% to 33.0%). More importantly, the average mobile data traffic per user increases from 1.1 GB to 2.1 GB per month with LTE. To address this issue, SKT is adopting an innovative traffic management system that dynami- cally allocates resources based on the requirements of the application. For example, voice traffic is very sensitive to delay than data traffic. Within the mix of data traffic, multimedia content is more susceptible to delay than non-real time applications, like email. The operator is using unspecified network intelligence to schedule network resources accordingly. South Korea is unique in that the operators have adopted a “Cloud RAN” approach to their network, although this network architecture isn’t universally deployed throughout all of the country. Even in South Korea, dark fiber doesn’t exist everywhere. With a Cloud RAN, the base- band units are centrally located and connected via dark fiber to remote radio units. When this type of network architecture is possible it creates a tremendous amount of scheduling synergy since all of the network scheduling occurs at a single location. This capability provides greater coordination across and between individual network elements that may not be possible with a decentralized approach. Samsung and Huawei both claimed a 30% gain in overall cell capacity and more than a 100% gain in edge-of-cell capacity. A cynic might claim that the comparison is done against an inferior decentralized scheduler, and to be fair it isn’t clear to us what exactly is being compared. Nonetheless, at least some of the South Korean operators are planning to launch early imple- mentations of Uplink CoMP (Coordinated Multipoint) and eICIC later this year. Both features are readily doable since the stringent X2 interface requirements, including ultralow latency and high bandwidth, are easily addressed, and not even relevant, when the scheduling is done within a rack of equipment. KT’s network evolution strategy is called WARP+. It began with a centralized approach and then incorporated “virtualization” in which the centralized baseband units are not specifically Some of the South Korean operators are planning to launch early implementations of Uplink CoMP and eICIC later this year. App Store Multimedia Web App Store Web Multimedia LTE 3G 42.8% 33.0% 7.1% 39.4% 39.0% 5.0% Figure 1. Distribution of Mobile Data Traffic Source: SKT (recreated by SRG)
  10. 10. 10  |   Signals Flash  July 1, 2013 dedicated to individual RRUs. As the next step, the operator is bringing in small cells and Wi-Fi into the cloud-based approach. KT also discussed its ABC (always best connected) philosophy which makes more intelligent use of Wi-Fi. With this approach, which intelligently shifts certain traffic onto its Wi-Fi network, the operator as seen a 25% increase in mobile data traffic with the Wi-Fi network carrying 41% of its data traffic – up from 16% without ABC turned on. The message from Tekelec (now Oracle) was also about load balancing and virtualization, but in its case the concept was applied to the core network, specifically diameter signaling traffic. With the DSR (Diameter Signaling Router), operators are able to manage and redirect IP and signaling traffic, which is critical for networks that must scale from token deployments to nationwide network in a cost efficient manner while also retaining high reliability. We plan to cover the topic of SDN in a dedicated piece sometime this fall. Given that multiple events and presentations were going on at the same time and that we had various obligations to fulfill, we missed out on some of the presentations that we wanted to attend. Honorable mentions go to T-Mobile, who presented results from their 4x4 MIMO trials (peak throughput = 250 Mbps in the field, 60-70% capacity gain over 2x2 closed loop MIMO and 80% edge of cell gains); Quintel, who is implementing an innovative approach to doing beam- forming; and InToTally, who is offering a form of power control in 3G and LTE networks that can meaningfully increase network capacity. We wish we could say more on all three companies/ presentations but we didn’t have the opportunity to sit throughout all of their presentations. We will, however, revisit the topic of MIMO performance in the not-too-distant future. 5) Small cells are big. Most operators are strongly on board with the concept of small cells and shifting traffic away from the macro layer – using cellular small cells, Wi-Fi, or a combination of the two. HetNet and SON are paramount with the best opportunity for third party small cell deployments occurring indoors. Given the interest and attention being paid to small cells, it would be heresy for an operator to discount the importance of small cells. However, the timing of when small cells will become mainstream and the exact role that they will have in the network is still up for debate. At least a couple of operators, including Vodafone, indicated that they are very open to using third-party small cells in their network. However, they also felt that the best opportunity in the near-term for third party suppliers was indoors since there is a natural interference barrier / demarcation point that exists. Thick walls made of space age material that is designed to keep the heat/cold in and the cold/heat out also do a great job of blocking RF energy. Vodafone went on to debunk the moderator’s claim that small cells won’t happen because DAS deployments are so large today. In the words of the operator, there are small cell solutions out there that it likes which can dramatically scale to support dense deployments and large amounts of traffic. Cost was also cited as a consideration point since DAS can be prohibitively expensive in certain situations. We would add that DAS doesn’t necessarily scale for capacity but it is great when it comes to providing a thin layer of coverage over a large geographic region. Some operators, including TELUS (Canada) and KT have deployed small cells in the outdoor macro network. From what we heard in the presentation, KT currently has 10,000 femto access points, growing to 18,000 femto access points, which are publicly accessible (e.g., open to all subscribers). KT is using its centralized scheduler and eventually eICIC to coordinate resources between the small cells and the macro layer. Thick walls made of space age material that are designed to keep the heat/ cold in and the cold/heat out also do a great job of blocking RF energy.
  11. 11. 11  |   Signals Flash  July 1, 2013 TELUS has deployed small cells in Vancouver. For 3G, the operator used dedicated spectrum but with LTE the operator has experimented with co-channel deployments. In its commercial deploy- ment the operator reserved certain resource blocks for the small cells while the macro cells used frequency selective scheduling to assign resource blocks that would generate the least amount of interference. With lighter traffic volumes, the two sets of cells would remain isolated in the frequency domain but as traffic levels increased there would be some overlap. From its tests, the operator saw meaningful performance gains, including an 80-100% increase in uplink throughput. However, longer term the operator acknowledged that features, such as SON and HetNet, will be critical. One other challenge that the operator cited pertains to cost. In this particular case, the presented information pertained to HSPA+ so it isn’t clear to us whether or not this issue extends to LTE. Specifically, the operator indicated that a 3G small cell site costs 1/5th the cost of a macro site, but the operator also requires 5-10 small cells per macro cell site (recall, the operator was also using different spectrum for its small cell network so it probably wanted to achieve fairly ubiquitous coverage). The distribution of cost for the small cell was also interesting with 67% of the cost due to civil work and labor. 6) The business case for LTE looms large with most operators. Last year with the economic situation in Europe the mood at the LTE World Summit was downright depressing. This year it wasn’t necessarily upbeat but there also wasn’t any evidence of Prozac-popping senior executives. Operators still felt compelled to justify their rationale to deploy LTE even if investors weren’t in the room. Orange presented its view on the network delivery cost for LTE versus HSPA+. According to its analysis, LTE doesn’t become less expensive for the operator than HSPA+ until 2015. And when it does become less expensive, the advantage isn’t huge, in particular to some of the marketing claims that we’ve seen from some vendors. Although the operator didn’t provide absolute numbers or discuss all of its underlying assumptions, Orange’s analysis is pretty similar to the results that we’ve derived through various network economic modeling exercises that we have done over the years. Without network traffic, the network delivery costs are infinite on a per MB basis on any network. It is only with sufficient data traffic that a more efficient technology Figure 2. 3G versus LTE Network Delivery Costs 300 250 200 150 100 50 0 4G 3G 2013 2014 2015 2016 2017 2018 3G Cost Basis @100 Source: Orange (recreated by SRG)
  12. 12. 12  |   Signals Flash  July 1, 2013 becomes less expensive. Further, since a lot of the network delivery costs are technology agnostic (e.g., site acquisition and leasing, as well as backhaul), it stands to reason that the costs are similar. The South Korean operators are the envy of the land and whatever they are doing, they are doing something right. Figure 3 shows the smartphone adoption by technology (3G versus LTE) and Figure 4 provides the mobile data usage. Q1 13Q4 12Q3 12Q2 12Q1 12Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10 1.5 2.4 4.4 7.3 10.3 14.9 18.9 22.6 25.7 28.3 30.9 32.7 34.3 21.4 22.1 21.2 19.2 16.9 14.7 3.6 7.1 11.7 15.8 19.6 1st LTE Smartphone Smartphone penetration: 64% WCDMA LTE Smartphone subscribers (mill.) Figure 3. Smartphone Subscriber Adoption Rates by Technology Source: Samsung (recreated by SRG) Figure 4. Mobile Data Usage in South Korea Source: Samsung (recreated by SRG) Q1 13Q4 12Q3 12Q2 12Q1 12Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10 0.5 0.7 1.6 4.4 6.8 10.0 14.3 20.4 27.2 34.8 39.9 48.0 59.1 18.4 21.2 21.8 19.9 20 18.1 2 6 13 20 28 41 1st LTE Smartphone WCDMA LTE PB per month
  13. 13. 13  |   Signals Flash  July 1, 2013 ON THE HORIZON: POTENTIAL SIGNALS AHEAD TOPICS ➤➤ Transmission Mode 2 versus Transmission Mode 3 in a Live LTE Network – how well does MIMO Really work and in what conditions? ➤➤ Carrier Aggregation (LTE Advanced) network benchmark study ➤➤ Over-the-air testing of leading smartphone platforms in an anechoic chamber ➤➤ LTE TDD network benchmark drive test ➤➤ VoLTE versus OTT benchmark study (including chipset benchmark study to analyze vendor VoLTE client implementations) ➤➤ MIMO utilization and network loading/scheduling drive test ➤➤ VoLTE drive test network evaluation ➤➤ Software Defined Networking (SDN) ➤➤ A-GNSS platform benchmark study (Round II) ➤➤ Baseband chipset + application processor benchmark study ➤➤ Smartphone signaling implications across operating systems ➤➤ How network performance (throughput and latency) impacts the user experience ➤➤ Smartphone signaling implications and LTE ➤➤ LTE Chipset performance benchmark study, including carrier aggregation ➤➤ HSPA+ (MIMO) network performance benchmark results ➤➤ The challenges of delivering video in a mobile network ➤➤ Cloud RAN and the use of a Distributed Network Architecture ➤➤ LTE Chipset Landscape
  14. 14. 14  |   Signals Flash  July 1, 2013 Figure 5 provides the monthly data usage for the average LTE data subscriber and the total LTE data usage. Fortunately, the LTE ARPU is meaningfully higher than the 3G ARPU (reference Figure 6), and this is resulting in an upward swing in ARPU for all three operators, in particular LGU+ (reference Figure 7). Figure 5. Monthly Data Usage Source: Samsung (recreated by SRG) Total LTE Traffic (TB) 1 User LTE Traffic (MB) 1Q 134Q 123Q 122Q 121Q 12 1Q 134Q 123Q 122Q 121Q 12 5.53 1,609 1,748 1,836 1,861 1,939 12.58 19.53 27.69 36.25 Figure 6. Monthly South Korean ARPU by Device Type Source: SKT (recreated by SRG) 3G (UMTS) Feature Phone3G (UMTS) Smartphone4G (LTE) Smartphone 28% 58% $43.4 $31.2 $18.4
  15. 15. 15  |   Signals Flash  July 1, 2013 35,000 32,500 30,000 27,500 25,500 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 LG U KT SKT KRW Figure 7. Monthly South Korean ARPU by Mobile Operator Source: SKT (recreated by SRG)
  16. 16. 16  |   Signals Flash  July 1, 2013 LICENSE COSTS The Mother of all Network Benchmark Tests – On the Inside, Looking Out Signals Ahead evaluates the in-building performance capabilities of commercial LTE networks (Band 4, Band 7, Band 13, Band 17) FULL REPORT: $1,795 Included with an annual subscription to Signals Ahead CONTACT INFORMATION You may call us at +1 (510) 273-2439 or email us at information@signal- and we will contact you for your billing information or respond to any further inquiries that you may have. Subscription infor- mation for our Signals Ahead research product, which includes these reports, can be found on the last page of this report. You can also visit our website at or write us at Signals Research Group, 10 Ormindale Court Oakland, CA 94611 Now available!
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