By Charles F. Moreira
The acronym “LTE” is already familiar within the telecommunication industry but what does it mean and what will it do for us? The benefits are real in LTE deployments in other parts of the world. What could we learn from them?
Simply put, LTE (Long Term Evolution) is a fourth-generation (4G) mobile communications radio carrier technology based upon the International Telecommunication Union Radiocommunications Sector’s (ITU-R’s) International Mobile Telecommunications – Advanced (IMT-Advanced) specifications defined in 2008.
The first commercial LTE networks were launched in Oslo, Norway and Stockholm, Sweden in 2009 and the Global Mobile Suppliers Association (GSA) reported that as of 7 April, 2013, 163 commercial LTE networks had been launched in 67 countries, 361 networks were planned or being deployed in 114 countries plus another 54 operators in another 10 countries are in pre-commercial LTE pilot trials, tests or studies.
The GSA expects there will be 248 commercial networks in 87 countries by the end of 2013 and emphasises that LTE is the fastest developing mobile system ever and is now mainstream, with a total of 68.33 million subscribers worldwide in the fourth quarter of 2012.
What’s in it for businesses?
Eight Malaysian wireless network operators – namely Celcom Axiata, DiGi Telecommunications, Maxis Broadband, Packet One Networks, Puncak Semangat, REDtone Marketing, U Mobile and YTL Communications were assigned LTE spectrum in the 2.6GHz band by the Malaysian Communications and Multimedia Commission (MCMC) in December 2012 and are either in process of pilot trials, soft or official commercial deployment right now or will have done so by the end of the year.
Puncak Semangat got the lion’s share of spectrum – i.e. 40MHz while each of the others got 20MHz.
Technical aspects aside, what will be the economic benefits of LTE for businesses and enterprises in Malaysia? Well one of the benefits of later deployment of LTE as in the case of Malaysia, is that we can learn from the experience of earlier deployments in other countries.
In the report, The Business Benefits of 4G LTE, published in 2012 by UK-based management consultancy Arthur D. Little, LTE provides substantial performance improvements over previous mobile technologies, with the promise of connectivity which is no longer a barrier to companies embarking on enterprise mobility.
Drawing on interviews with senior executives, together with Arthur D. Little project experience from other countries, the report explored specific applications in five example verticals – namely, construction, healthcare, retail, transport and professional services.
Based on its findings, the report defines five general types of business applications or ‘use-cases’ and explains how their performance can be substantially improved by 4G LTE – namely: large file transfers, rapid workplace set-up, rich M2M and and remote monitoring applications, video conferencing, tele-presence and rich media collaboration, and remote access to business applications.
Compared with previous mobile network technologies, 4G LTE offers much higher bandwidth (speed of data transfer), lower latency (faster response times from the network) and improved spectral efficiency (increasing overall network capacity).
In practice, this allows:
-more applications to be used on mobile devices, outside the home and office
-faster real-time sharing of large files and streaming media
-near-immediate delivery of time-sensitive data, such as real-time interaction or transactions.
Compared with WiFi, 4G LTE allows:
-Fully-mobile use of applications that require true broadband speeds.
-Improved convenience (‘ownership’ of the mobile connection)
-Security (no need to authenticate into a possibly public network)
LTE uptake issues
While all seems fine and dandy for enterprise adoption, what will its adoption be like among the general population?
Analysys Mason studied LTE uptake in several countries in the three years since it was first launched against three factors within the control of network operators – namely, network coverage, pricing structure and the device ecosystem (availability of devices).
The study found that mass-market pricing (same price as 3G) and device ecosystem (especially the availability of LTE smartphones), rather than breadth of network coverage are key for early LTE success.
The study measured LTE up-take in selected countries as a percentage of 3G and 4G connections over the number of quarters since LTE launch and found the following:
South Korea achieved around 23% LTE up-take within five quarters. Operators there had offered a variety of LTE smartphones and other devices at prices comparable to 3G prices since launch. They have also aggressively rolled out a national LTE network, which covered 95% of the population within a year.
The United States achieved about 11% up-take after eight quarters. Operators reduced the price premium for LTE service three quarters after launch, when the first LTE smartphones were available and up-take accelerated when a much wider variety of smartphones and other devices were available.
Up-take in Sweden where LTE was first launched was just under 5% after 12 quarters and only about 2% in Germany after nine quarters. Operators in both these countries offered few LTE devices and premium prices which hindered up-take.
Operators in many countries focus on their network coverage in their marketing, which looks good in terms of individual operator’s share of LTE connections but has less influence on LTE uptake on a national level.
The situation in Hong Kong, Australia and Canada seem to drive home the point that nationwide LTE coverage isn’t a criteria for LTE success, at the moment. (PULL QUOTE)
Uptake in Hong Kong was around 3% after eight quarters, despite having over 90% geographical LTE coverage, without mass-market pricing in the early stages and a variety of smartphones to support LTE up-take, so its high level of coverage failed to drive take-up within the first year.
On the other hand, Australia and Canada achieved about 4% up-take after five quarters, despite having 40% and 33% LTE network population coverage respectively one year after launch. In both countries, several LTE smartphones, USB modems and tablets were available in the first and second quarter of LTE service, coupled with their operators’ quick adoption of mass-market pricing, which enabled a relatively high LTE up adoption rate in both countries.
Market offerings
The study also found that a high proportion of postpaid subscribers and combined 3G/LTE plans had also enabled LTE adoption. Market factors such as ease of migration and level of competition favoured LTE up-take, as well.
A high percentage of postpaid users and the availability of combined 3G/LTE plans can help drive adoption, since combined 3G/LTE plans make it easier for postpaid users to migrate from one technology to another and if subscribers purchase new LTE devices when they renew their contracts, they can be connected to LTE automatically.
Canada and the United States have about 80% postpaid users where operators offer combined 3G and LTE packages. This has resulted in relatively fast LTE up-take.
Besides postpaid plans, availability of LTE-enabled devices also plays a crucial role. While Japan and South Korea have almost 100% postpaid subscribers, operators in South Korea offered significant LTE handset subsidies to encourage migration, while those in Japan did not, so the up-take in South Korea was 23% after four quarters versus just over 5% after eight quarters in Japan.
The proportion of postpaid subscribers ranged between 40% and 60% in other countries studied. Operators in Australia, Japan and Sweden now have combined 3G and LTE plans, hence higher up-take than in Germany.
The study also found that a low level of LTE competition may have a limited impact on LTE up-take, while high levels of competition can help to drive growth. (PULL QUOTE)
Competition was low in countries that have a slow and medium LTE take-up rate, while the markets were fiercely competitive in Canada and South Korea, where all the major operators launched LTE within two quarters. However, Australia and the United States also achieved rapid LTE up-take despite competition in these countries being relatively mild.
But watch that speed
The key advantage of LTE for enterprise and general users is its 100Mbps peak download speed. But actual experience of mobile data technologies since GPRS technology, have industry-claimed peak download speeds that are all far slower.
For example GPRS, a 2G technology introduced in the late 1990s was claimed to have 114Kbps download speed but you were lucky if you got 45Kbps in practice. EDGE was claimed to have 473.6Kbps download speed but real-life speeds were 236Kbps. Download speeds of basic 3G was supposed to be 384Kbps for mobile users outdoors and 2Mbps for stationary users indoors but you were lucky to get 386Kbps.
One local mobile operator which advertises 42Mbps download and 11Mbps upload speeds over its HSPA+ network, has a disclaimer in the frequently asked questions on its website which states that actual average speeds are from 3Mbps to 10Mbps download and 0.5Mbps to 1.5Mbps upload.
One of the reasons for this is that these peak speeds claimed are that of the cell and if there is only one user being served by that base station at a given time, then he may experience the full speed but more often than not, multiple users are being served by a base station and depending upon what they are doing online, such as each downloading a big file at the same time, they each will find their connection much slower.
So, will it be the same old story with LTE, where instead of 100Mbps we’d be lucky to get 20Mbps?
We’ll soon find out.
(This article appeared in the Q3 issue of Enterprise IT News magazine)
