Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
LTE (Long-Term Evolution) has got off to a flying start. Networks based on this high-speed mobile technology, which offers peak speeds of up to 100 megabits per second, are already live in 12 countries spanning three continents, including Sweden, Hong Kong, the United States and even Uzbekistan.
But sustaining this momentum over the next few years depends on governments around the world releasing suitable spectrum in a timely and harmonised fashion. If they do that, then LTE will gain further economies of scale early in its lifespan, enabling equipment makers to bring down the cost of LTE hardware for consumers and mobile operators in the United States and elsewhere. In essence, the mobile industry needs to create a virtuous circle around LTE: Increasing scale will enable manufacturers to offer a broader selection of attractively-priced LTE devices that will appeal to a wider variety of consumers and business users, generating further scale. Globally or regionally-aligned spectrum is the fuel that keeps this cycle turning.
Wireless Intelligence, the GSMA’s analytical arm, forecasts that global LTE connections will rise to 300 million by 2015 from 1 million in the first half of 2011. In my view, the availability of spectrum will determine how fast the global mobile industry creates the virtuous circle necessary to hit the 300 million milestone.
In order to optimise the technology’s performance, LTE operators will need contiguous chunks of spectrum in channels between 10 megahertz and 20 megahertz wide. Ideally, this spectrum should be in both a low-frequency (sub 1 GHz) band, offering good coverage characteristics for rural areas, and a higher-frequency band (above 1 GHz), providing high capacity levels. This combination will enable operators to cost-effectively meet demand for mobile broadband in both cities and less-populated areas.
The U.S. government is moving faster than most of its counterparts to free up more spectrum for wireless broadband technologies. Having already auctioned several chunks of spectrum in the 700 MHz and 2.6 GHz bands, the Federal Communications Commission said in December that it will auction off 16 unsold spectrum licenses in the 700 MHz band in July.
The 2.6 GHz band, in particular, has the potential to become a globally-harmonised frequency band, enabling manufacturers to produce the same LTE equipment for markets around the world. Germany, Hong Kong, Norway, Finland and Sweden have already licensed the 2.6 GHz band and Chile, Colombia and Brazil have all taken steps in the same direction.
In most countries, licensing the 700 MHz or 800 MHz bands, which are often used by other sectors such as broadcasting or the military, may take longer. The availability of spectrum of these low-frequency bands will be highly-dependent on individual governments’ timetable for the switchover from analogue to digital television. Germany has licensed the 790 MHz to 862 MHz chunk of spectrum for mobile broadband services and most other European countries plan to follow suit, but some Eastern European governments have yet to commit to making this spectrum available.
Of course, LTE launches in China, India, Indonesia and other heavily-populated Asian countries would make a major contribution to generating the economies of scale I highlighted earlier. The relative scarcity of fixed-line broadband services in much of Asia means there is a very strong socio-economic case for governments to allocate more spectrum to mobile broadband services. If governments in the Asia-Pacific region were to allocate the 700 MHz band for mobile broadband services in a harmonised manner, this would lead to an increase in GDP in the region of up to $729 billion by 2020, the creation of more than two million jobs across the region and the generation of a $131 billion increase in tax revenues, according to a study by the Boston Consulting Group for the GSMA.
India, in particular, would benefit from making the 700 MHz spectrum band available to deliver mobile broadband services cost-effectively to its vast rural population. However, LTE is likely to be deployed initially in a higher-frequency band. Some mobile operators are planning to deploy the time division version of LTE, known as TD-LTE, in the unpaired 2.3 GHz spectrum they acquired in India’s wireless auctions last year. Mobile operators in China, the United States and several other countries are also likely to use TD-LTE in unpaired spectrum.
Although some mobile operators may also refarm existing mobile spectrum for use with LTE, many are likely to continue to use the 2.1 GHz band for HSPA. Thanks to the creation of a similar virtuous circle to that described earlier, there is a wide selection of smart phones available supporting HSPA at 2.1 GHz. Moreover, the 328 live HSPA networks worldwide can be upgraded in stages to HSPA+, enabling them to run at peak speeds of between 21 Mbps and 42 Mbps. With more spectrum, HSPA+ networks could even be configured to hit peak speeds of 84 Mbps. Today, 72 HSPA+ networks are in commercial service.
In fact, operators’ network plans suggest HSPA+ and LTE are both on a rapid growth trajectory. Across the world, a further 173 LTE networks and a further 52 HSPA+ networks are either being planned or are under development. In some markets, individual mobile operators will use both technologies in tandem, mixing and matching HSPA+ and LTE according to the spectrum and equipment available. To paraphrase science fiction author William Gibson, the LTE future is almost here, but it will be unevenly distributed.
Dan Warren joined the GSM Association (GSMA) in 2007 as Director of Technology with a particular focus on helping the Association drive forward standards and technologies including High Speed Packet Access (HSPA) mobile broadband, Long Term Evolution (LTE) standards and IP Multimedia Subsystem (IMS) as well as providing internal technical consultancy to GSMA’s Projects and Working Groups. Prior to joining the GSMA, Dan worked for Vodafone and Nortel. Dan has a degree in Mathematics and a PhD in Applied Mathematics.
