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.
Mobile technologies in unpaired spectrum have always been a challenge for me. I’m not ignorant of the many local successes of WiMAX and other alternative wireless broadband technologies, but none have really become global movements in the way they would have liked. Perhaps the most disappointing has been the TDD version of UMTS. The vast majority of Europe’s 3G operators, and many operators in other markets, hold small allocations of unpaired spectrum, but these remain unused. TDD-UMTS services have appeared in other spectrum bands in some markets (for example, in Australia, the Czech Republic and the United Kingdom), but traditional 3G operators have not touched these technologies: their priorities have been on building out 3G services in paired spectrum using FDD technologies.
I spent a day recently experiencing a TDD mobile network in Tokyo and it helped to reinforce the feeling that finally a global TDD movement is emerging. Softbank’s new 4G network uses a technology they call Advanced eXtended Global Platform (AXGP). At the risk of offending them, I will call it TD-LTE: it is 100% compatible with this and is built with the same equipment used in other TD-LTE networks. They launched a pre-commercial network in parts of Tokyo in November last year and will go live next month. My experience last week was of a network consistently delivering 40-50 megabits per second download speeds. Softbank are confident they can sustain 30-plus Mbps average speeds as the network goes live and the user numbers grow.
4G network launches are relatively common events these days, though this one was interesting for a number of reasons:
No. 1: Everyone will need to make the most of their available spectrum. This network is not a world first, but in terms of the scale of the deployment and the motivation for Softbank in picking the technology it provides a good indication of what is to come and how TDD technologies will be an important part of the 4G LTE services mix in a way they just never were with 3G UMTS. Softbank is on the same general experience curve as everyone else – it may be a little more advanced in having already shut down its 2G network, though is a little earlier in the cycle in terms of smartphone adoption impacting traffic volumes on its network. Currently it doesn’t hold the right spectrum to really deploy more “traditional” FDD-based LTE services, but has unpaired 2.5GHz spectrum – so TD-LTE is an obvious choice for deployment there.
No. 2: 2.5GHz TD-LTE is the technology Clearwire will upgrade to in the United States this year. The Softbank network gives us an idea of what Clearwire will be able to deliver, but also the challenges it could face. Current U.S. 3G and 4G networks do not look anything like what Softbank is building in Japan. In particular, the sheer density of the network is breath-taking. The Tokyo network I experienced consisted of nearly 40 cell sites in one square kilometer, at a spacing of 50 to 200 meters. In some locations the operator will have 150 sites per square kilometer. Clearwire has some experience of small cell deployments, so this will not come as a shock, though the TD-LTE build will still involve hard work in terms of planning, site permissions/zoning and backhaul.
No. 2: TD-LTE will get an early volume contribution from emerging markets. I’ve focused on Japan and the United States here – markets with a need for more urban mobile broadband capacity – but emerging markets will follow much faster than they have with 3G. In particular, India and China are planning 2.3/2.5 GHz TD-LTE networks, with deployments as early as this year in some cases. This provides added momentum to TD-LTE, something which is usually lacking in the early years of new technologies. Scale is key and Softbank and Clearwire will enjoy being in a technology club which includes players of the scale of China Mobile or Reliance Industries, which have 634 million and 147 million mobile subscribers respectively. A technology which is backed by operators who need cost-effective solutions and low-priced devices in some of the world’s lowest ARPU markets is an attractive proposition in markets at the other end of the ARPU distribution curve.
I fear I’m starting to sound like a TD-LTE cheerleader. It has a lot going for it from a technology perspective – for Internet traffic there is a huge benefit in being able to vary uplink/downlink bandwidth allocations, while techniques such as beam-forming will help to reduce inter-cell interference (critical if your sites are only 50 meters apart). But ultimately, it will come down to operator willingness to commit to the technology. Other TDD mobile broadband technologies such as Mobile WiMAX, TDD-UMTS or iBurst, have had their operator advocates, but TD-LTE just seems to be getting more support from a wider variety of operators. I’m not arguing that TD-LTE is better than the alternatives, just that it feels like is has the kind of momentum which will finally bring widespread success.
As director of the Wireless Operator Strategies service, Phil Kendall is responsible for providing strategic and tactical support to leading wireless operators, equipment vendors, and software companies around the world. He is a regular speaker at wireless industry conferences and has authored major reports on operator expansion strategies, fixed-mobile convergence/substitution, customer segmentation, tariff initiatives, and the evolution of 3G/4G networks.
Prior to joining Strategy Analytics, Kendall was a research analyst at CIT Research, where he was the principal analyst covering a diverse range of telecoms markets, including mobile communications, fixed network services, satellite and cable TV communications.
Kendall holds an MSc in Economics from Birkbeck College, London, and a BA in Economics and German from the University of East Anglia. Kendall’s background in economics and econometrics informs his highly respected analysis of both micro-economic trends in end-user behavior and macro-economic industry dynamics.
