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Exploring LTE architecture and services drivers

This four-part Telecom Insights guide takes a detailed look at how 4G Long-Term Evolution (LTE) architecture and technology planning and deployment decisions should be influenced by LTE service opportunities in various wireless markets, as well as why carriers need to evolve their metro network infrastructure toward an Evolved Packet Core for wireless broadband and how changes in metro network technology and operations are being driven by these issues.

Don't miss any of the articles in this series on LTE:


Exploring the key 4G LTE architecture and opportunity drivers
by Tom Nolle, President, CIMI Corp.

From the editor: Wireless operators' 4G LTE architecture and infrastructure planning decisions are being driven by a combination of emerging wireless services, a vastly expanded set of mobile devices to support, the opportunity to offer broadband access where wireline isn't suitable, and changes in users' social and content-consumption behaviors. In the first of four in-depth articles on building out 4G LTE network architecture, telecom consultant Tom Nolle, president of CIMI Corp., looks at how each 4G LTE market driver can take LTE planning in a slightly different direction.

Few people in the mobile industry dispute the inevitability of 4G Long-Term Evolution (LTE), but the timing and the nature of deploying LTE network technology and infrastructure is less certain. Rather than a one-sise-fits-all approach, 4G LTE architecture is being determined by the specific competitive and opportunity drivers that provide the impetus for operators to shift to LTE. The solutions vary because of significant differences in wireless markets.

The most credible driver for deploying 4G LTE architecture, however, is the market-wide shift from a voice-driven wireless revenue model to a focus on non-voice services -- i.e., broadband data and video. Operators worldwide have been offering unlimited-usage models, and competition is driving down mobile per-minute prices. At best, voice average revenue per user (ARPU) is capped, and it's likely to spiral down over the next five years. Short message service (SMS) is under similar pressure, so data and content services that include video are the hope of the future.

 The most effective mechanism for promoting mobile data services has been the growth in smartphone use. The Apple iPhone made smartphones a market phenomenon, spawning a host of competitive models and the entry of Google's open-source mobile Android operating system as a general competitor. To create Android, Nokia and Intel -- which both previously offered their own open-source Linux smartphone platforms -- agreed to combine their programs to boost market interest. Proving the point, industry statistics point to smartphones making up a third of all handset sales within a year.

In the U.S. alone, smartphone use has clogged cells and entire metro areas, affecting the credibility of smartphone data services and the services offered via traditional handsets. Smartphones also accentuate the competitive benefit of higher mobile data speeds, and the success of smartphones will accelerate 4G LTE architecture deployment.

Multiple wireless market forces drive 4G LTE evolution

The wireless market forces driving 4G LTE architecture deployment are many and complex. Here's a brief overview of the main forces that operators should consider:

  • Third-party developer programs. A theme related to the smartphone is the explosion of interest in third-party developers, applications and application stores. Every smartphone vendor now has one, and the GSMA -- a GSM-focused industry group -- announced an initiative to create a uniform application framework and store across two dozen operators, and membership is growing. Phone applications are also a main focus of Microsoft's new mobile architecture, Windows Phone 7.
  • Apps provide an assist. Applications are a natural pairing with smartphones because a general-purpose browsing function is of limited value to users, owing to the small screen and the difficulty of manipulating the device to navigate websites while mobile. Applications can draw online information, but they package the user navigation in a way consistent with mobile device and user constraints. Applications don't require 4G LTE services, but most operators are reluctant to make substantial investments in 3G-based application stores and service layer architecture for fear that the success of the investment could overstress 3G networks.
  • Taking the place of wireline broadband. In rural areas and developing economies, 4G LTE network architecture evolution is being stimulated by the need to offer wireless services as an alternative to fixed-wire broadband services. Many developing countries depend on mobile phone services because they lack fixed-line infrastructure. In these markets, it would be unproductive to attempt to deploy wireline broadband given the low economic densities available to justify it. LTE networks offer an enormous advantage in these areas by providing a wireless service that can be used to support fixed broadband access in selected homes and businesses from the same infrastructure that supports traditional mobile services. This driver is particularly valuable in areas that depend on tourism because Internet access is increasingly a baseline requirement for travelers.
  • Regulatory issues. Public and regulatory pressure to include broadband access in universal service subsidies or to fund rural broadband widens the scope of interest in LTE as a fixed/mobile combination. When LTE architecture is paired with frequencies that offer reasonable range, it can serve a fairly large geography economically while supporting both fixed sites and mobile services. As before, this dualism offers a better return on infrastructure and better use of scarce spectrum resources. WiMAX, the other 4G technology, is also suited to the rural market, but LTE is generally viewed as a more suitable strategy because it is an evolution of 3G wireless and is more versatile where mobile phones and wireless broadband coexist.
  • Mobile appliance explosion. A final critical driver for LTE is the mobile appliance explosion, first seen in the use of network-enabled e-book readers and now expanding to new-age tablet appliances. These devices are emerging as the core of a new series of business models based on delivering content to users who are less "mobile" and use the device from a variety of fixed locations as opposed to using it while moving -- literally. Operators expect that this migratory-use behavior model will create considerable demand on cells in locations where people sit and socialise (i.e., classic hospitality sites).
  • Supporting mobile users with different usage patterns. Some network operators offload 3G network traffic using hotspots and Wi-Fi to support these users, but others prefer to keep their users on their own cellular networks using femtocells. Among the advantages of femtocell technology is the fact that it can be applied to either 3G or 4G/LTE networks, but given the inevitability of LTE architecture deployment, most operators say they plan to deploy femtocells as a part of their overall LTE program. Femtocells can also be used in the home to ensure that LTE customers have good service even during the period of transition from 3G.
  • Wireless voice complexity. Many operators also face a cost-side driver for LTE architecture: the need to modernise voice services around voice over Internet Protocol (VoIP). Because 3G voice is based on time-division multiplexing (TDM), as most wireline voice services are, the fit between the two has been good up to now. As the wireline voice switching plant ages, it becomes more difficult to justify reinvesting in the technology, given the sharp downward trend in voice pricing and the increased competition from Internet voice services like Skype. If wireline voice is to shift to VoIP, then wireless voice should as well.

The interest in moving to a lower-cost VoIP service model has accelerated since 2008, partly because of global economic conditions and competition from over the top (OTT) players like Skype and Google that has become more intense. While few operators plan a fork-lift voice infrastructure upgrade, most expect that they will be moving away from the TDM model over the next five years, and a decision to shift to packet voice for mobile services would facilitate this migration. Many operators are looking at creating a parallel VoIP model supporting both mobile and wireline users while gradually phasing out the older voice infrastructure as it ages.

The bottom line on 4G LTE architecture deployment

Operators gain the advantage of higher data rates per cell from 4G LTE, larger customer capacity per cell, and more efficient use of backhaul and metro connect infrastructure for services that are increasingly data-dominated. The current explosion in smartphone and mobile appliance interest makes it clear that the markets will quickly stress the capacity of 3G networks and that further 3G investment will be problematic if there is any risk that competitors will leapfrog to 4G. Because that risk exists in nearly every developed wireless market, there is little chance that a given mobile operator will not confront at least one of these LTE drivers in its service area in the near future.

Next: Deploying LTE network layers for peak performance and operations

About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is the publisher of Netwatcher, a journal addressing advanced telecommunications strategy issues. Check out his SearchTelecom.com networking blog Uncommon Wisdom.

This was first published in February 2011