Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
Over the next few years the three major mobile operators in North America will deploy their respective next-generation broadband wireless technologies. Sprint Nextel, through its Clearwire relationship, will deploy Mobile WiMAX at 2.5 GHz. AT&T Mobility and Verizon Wireless will both deploy LTE at 700 MHz and most likely 1700 MHz, although Verizon Wireless has not officially indicated that LTE will be deployed in the higher frequency band. For that matter, neither operator has ruled out the use of other technologies at 700 MHz although personally I would rather bet on a three-legged dog at the track than bet that either operator adopts a multi-technology strategy in their virgin spectrum.
As is always the case when companies try to highlight their competitive strengths, the three operators have trumpeted or allowed the media to trumpet for them why their respective strategy is going to “win the day,” while seemingly ignoring their weaknesses.
Sprint Nextel/Clearwire has made it very clear that they have a substantial spectrum advantage with well north of 100 MHz of untapped spectrum available at their disposal. Conversely, barely a day went buy during the run-up to Auction 73 without some media outlet writing about the glorious prospects for networks deployed at 700 MHz and how radio waves operating in the band would seemingly travel to “infinity and beyond” and even leap tall buildings with a single bound if they didn’t already penetrate the walls like an x-ray laser with nary a drop in signal strength.
Unfortunately, both arguments are a bit one-sided, although directionally correct. In order to better appreciate the issues at hand it is important to take a look at the arguments and the relative competitive strengths with a somewhat pessimistic, albeit realistic, point of view. In other words, instead of seeing the glass half-full, we’ll see it for what it also is: half-empty. Let’s start with looking at the supposed spectrum advantage that Sprint Nextel/Clearwire claims to have.
Greater than 100 at 2500
By all accounts Sprint Nextel/Clearwire’s spectrum portfolio is significant. To put things into perspective, Sprint Nextel probably has at most two EV-DO carriers deployed in any given market, or 5 MHz of spectrum, excluding guard band, dedicated for mobile broadband data services. Thus, the operator is essentially betting that it will find a need/demand for at least a 20x increase in dedicated spectrum for broadband data usage over the coming years. Once you factor in the propagation loss associated with 2.5 GHz versus 1900 MHz, or where EV-DO is deployed today, the implied increase in demand is substantially higher. For its part, Sprint Nextel has publicly stated that if another operator were to offer a similar amount of capacity at 700 MHz that the operator would require nearly six times more cell sites due to the limited amount of spectrum available in that frequency.
The problem with this analysis is two-fold. First, until broadband wireless data usage reaches the higher threshold, many of the advantages associated with having lots of spectrum cannot be realized. Based on extensive modeling that we have done, average data usage on the Mobile WiMAX network could easily exceed several gigabytes per subscriber per month with a very strong subscriber penetration rate and there would still be plenty of unused spectrum assuming that the network was designed to provide full mobility and deep in-building penetration (for brevity purposes we can’t provide all of the underlying modeling assumptions and the specific results).
Obviously, mobile data usage is going to increase over time, and a strategy that makes it more affordable and desirable to consume lots of data will definitely help drive data consumption. However, there would still need to be a fundamental shift in how consumers use broadband wireless in order for monthly data consumption per subscriber in the multi-gigabyte range to be the norm and not the exception. Other usage scenarios, such as wireless DSL replacement or data connectivity for the SOHO/SME markets can help drive usage to these levels as long as consumers accept a broadband wireless service over a broadband wireline service, which typically offers much higher throughput.
Second, in order to compare apples with apples, a network at 2.5 GHz needs to provide the same degree of coverage as a network deployed at 700 MHz and/or 1700 MHz. Based on a detailed analysis of the FCC requirements for the B Block in 2019, which state that 70% of the landmass in each CMA must be covered, exclusive of certain land, such as government properties, and assuming equivalent network performance criteria, an operator deploying at 2.5 GHz would need approximately six times more cell sites to meet the requirements than an operator deploying at 700 MHz.
In other words, on day one the operator using 700 MHz spectrum appears to have a distinct advantage with respect to capital expenses and subsequent operating expenses. However, when data demand levels cross a certain threshold the operator using 2.5 GHz has the advantage. Worth noting, Sprint Nextel’s analysis, which seemingly applies full use of its spectrum assets, implies that the average data consumption is close to two orders of magnitude higher than current consumption levels.
But wait, there’s more
As suggested at the beginning of this article there are a number of engineering challenges associated with 700 MHz that must also be considered. Some of these challenges have to deal with the lower frequency itself, while other issues relate to how the FCC allocated the license blocks, and/or the incumbent users which also operate in or near the UHF spectrum that Verizon Wireless and AT&T Mobility will use for LTE.
As Sprint Nextel accurately points out, there just isn’t a lot of spectrum available in this band. The A Block and B Block licenses only have 12 MHz of spectrum (2×6 MHz) while the upper C Block license only has 22 MHz of spectrum (2×11 MHz), or enough for a single 10 MHz OFDMA radio carrier.
It is generally recognized that OFDMA technologies can achieve superior performance characteristics, such as spectral efficiency, versus CDMA-based technologies, but the real advantages are not obvious unless dealing with radio carriers that are at least 10 MHz wide. Thus, with only 6 MHz of paired spectrum, LTE (or Mobile WiMAX) does not have a performance advantage over a CDMA-based technology, such as HSPA/HSPA+.
Operators deploying LTE at 700 MHz are also pretty much forced to use the same frequency in every single sector of each cell (called N=1 frequency reuse). Although such a frequency reuse scheme makes better use of the spectrum it also introduces higher amounts of interference, especially at the edge of the cell, and as a result the user experiences lower data rates. Conversely, Sprint Nextel/Clearwire can be a bit “wasteful” when it comes to using their spectrum since they have so much of it. Thus, they can assign frequencies in their network such that the interference is greatly diminished and the overall user experience is greatly improved. This approach may be “wasteful” but if you have lots of spectrum to play with it is by all means the right approach.
What Sprint Nextel seemingly fails to recognize in its comparative analysis is that its two biggest peers won more than a single 700 MHz license and in a number of cases they have access to 1700 MHz spectrum as well. Verizon Wireless owns the upper C Block, it was a big winner of A Block and B Block spectrum, and it has a solid 1700 MHz footprint on the eastern half of the United States. AT&T Mobility purchased the lower C Block from Aloha Partners, it was a big winner of B Block spectrum, plus it has a very attractive 1700 MHz footprint across a large portion of the United States. Had Sprint Nextel taken the operators’ complete spectrum portfolio into consideration when doing its comparison the results would not have been as striking, although Sprint Nextel would still have more spectrum at its disposal.
Size matters
All things being equal, radio waves may travel farther at 700 MHz than they do at 2.5 GHz, but the size of the 700 MHz antenna must also be much larger than a comparably performing antenna at 2.5 GHz since the size of the antenna is inversely proportional to the frequency that it supports.
The issue of antenna size is especially important since one of the key enablers of LTE and Mobile WiMAX involves antennas, or specifically MIMO (multiple input, multiple output) antenna technologies. As most industry followers are aware, under certain conditions MIMO allows multiple transmissions to be sent from the base station (using multiple antennas) and received at the user device (using multiple antennas), thus potentially doubling the user data rate and/or improving coverage in hard to reach areas of the network.
However, in order for MIMO to work effectively the antennas must also be separate from each other and with the lower frequency band this becomes problematic to achieve. For certain types of devices, such as notebook computers with embedded solutions, this issue should not be challenging to solve. However, for other device types, such as smartphones or USB dongles, there may not be enough room to properly lay out the antennas, thus calling into question whether or not the benefits of MIMO will be fully realized. I could add that two independent MIMO antenna configurations could be required – one for the lower 700 MHz frequencies and one for the upper 700 MHz frequencies – thus making it even more challenging for device manufacturers.
Other engineering issues associated with 700 MHz include interference from services that operate in channels that are adjacent to the spectrum being used for two-way broadband wireless services. Very high-power TV broadcast signals will impact Block A licensees in a few markets. Likewise, the LTE device could even interfere with TV reception in certain situations. The concern associated with “white spaces” devices is a good analogy in this instance. However, the impact of a MediaFLO broadcast, which operates in the D and E blocks, could be more problematic.
The D Block sits adjacent to the uplink channel for AT&T Mobility’s lower C Block spectrum. Given that AT&T Mobility currently offers MediaFLO to its subscribers this means that an LTE device, which also supports MediaFLO, could transmit an LTE signal and interfere with its own ability to receive a MediaFLO signal or it could interfere with an adjacent person trying to watch a MediaFLO broadcast.
The E Block, which is also being used by EchoStar for unspecified purposes, is even more challenging for operators, such as Verizon Wireless, since it sits alongside the downlink channel for the A Block. Thus, a high power MediaFLO/EchoStar signal could interfere with a much lower power LTE transmission being sent to a subscriber in the adjacent channel.
There is also the matter of self-interference or what is also called “de-sense.” This particular issue is prevalent with all licensed 700 MHz blocks and, as the name implies, “de-sense” means that a device can actually interfere with itself as the transmitted signal can re-enter the device through the receiver, thus interfering with the desired signal from the serving base station, or enhanced Node B. This occurs because the gap between the transmit and receive bands is so close together. Solutions, such as advanced filters, could reduce the level of interference but such solutions do not exist today.
Finally, there is the potential for interference with the public safety spectrum. Since this is strictly verboten, one likely solution will be to reduce the maximum transmit power and/or the amount of bandwidth assigned to an individual device. Such a solution may solve the problem but the tradeoff would be that the effective size of the 700 MHz cell would be reduced while restricting the amount of bandwidth that can be assigned to an individual user would also lower the user throughput.
Final thoughts
Although the challenges associated with 2.5 GHz are largely understood, the challenges associated with 700 MHz are not fully appreciated. In fact, the companies responsible for designing 700 MHz solutions are not even completely certain if the issues discussed in this article will manifest themselves in a network or if they do exist the degree to which they will impact network performance. It will only be after trial networks are launched that they will be able to fully appreciate the challenges and whether or not proposed solutions will actually work.
Regarding the spectrum advantage, having more spectrum is always a good thing and I have yet to hear an operator lament that it has too much spectrum. However, the point at which an operator can privately admit that “enough is enough” is somewhat speculative and it must take into consideration their belief set regarding the uptake of mobile data usage. Further, one must not forget that operators, such as Verizon Wireless and AT&T Mobility, who have access to wireline assets, may not necessarily need as much spectrum as operators, such as Sprint Nextel/Clearwire, who can only provide broadband access via their wireless networks.
Michael Thelander is the Founder and CEO of Signals Research Group, LLC (www.signalsresearch.com). He can be reached at mike@signalsresearch.com. RCR Wireless News can be reached at rcrwebhelp@crain.com
