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LTE PROMO ARCchart
LTE PROMO ARCchart
Chris White
Lead Analyst
Dr Matt Lewis
Research Director
ARCchart Ltd
27 Holywell Row
London EC2A 4JB
United Kingdom
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The LTE Business Case: Operator and Vendor Strategies
Executive Summary
3G LTE (Long Term Evolution) is still technically a pre-standard technology and is not likely to see the light of
day until 2010 at the earliest, yet it is seeing unprecedented interest from vendors and operators alike. The
question is: can operators who are only just starting to see returns from their 3G licenses really justify
investing in what is essentially a new replacement technology?
This report examines the technical and market dilemmas faced by operators and vendors in their migration to
LTE, examining the LTE business case in the context of a converging communications world. The report looks
at the risks associated with the upgrade to a totally new technology and the progress made by the principal
vendors and standards bodies involved.
The report goes on to discuss the key technologies involved in LTE like System Architecture Evolution (SAE),
OFDM and multiple-input and multiple-output (MIMO) and the specific timing and logistics involved in rolling
these technologies out. The report also analyses the spectrum issues faced by mobile operators and the
specific issue of IPR and how operators and vendors are working to prevent it becoming a barrier to launch.
The report profiles operators such as NTT DoCoMo, Orange and Verizon, outlining their mobile broadband
strategies and their expected moves to LTE.
The technical benefits of upgrading to LTE are sound. These include 100 Mbps of downlink and 50 Mbps of
uplink, reduced latency and increased spectral efficiency. The systems architecture should also allow for
significant savings as it will be all-IP. What all this means is more efficient delivery of existing voice and data
applications as well as the potential to compete on certain levels with the fixed-line environment; be it mobile
TV, videoconferencing or VoIP.
The mobile industry has been searching for consensus over the best technology route to follow. Making the
wrong decision is potentially disastrous as a technology without critical mass will accrue none of the benefits
of mass production and may prove incompatible with the rest of the industry. At first there were three main
contenders: UMB, mobile WiMAX and LTE. Each had their own specific advantages and each had their own
advocates, but market momentum has now firmly swung in LTE’s favour.
Now it looks like LTE will be the technology of choice for those operators following the CDMA route as well as
the GSM route. Verizon Wireless announced in late 2007 that it would be following the LTE path, despite its
status as one of the flag bearers for CDMA technology. This brings it into line with joint venture partner
Vodafone which also announced its intention to move to LTE.
ARCchart forecasts that the first LTE network will be rolled out in Japan in 2010, but subscriber numbers will
not start to pick up until 2011, when European and North American operators begin to launch their networks.
By 2013, the forecast number of global LTE subscribers is 68.9 million with European operators making up
28.8 million of this number followed by 21.5 million in Asia Pacific and 17.5 million in North America.
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The LTE Business Case: Operator and Vendor Strategies
Without doubt, the most ambitious operator in the LTE space is NTT DoCoMo which is looking to deploy by
2009. NTT DoCoMo’s Super 3G technology is already being tested and the operator is working closely with
infrastructure and handset vendors to ensure it meets its tight timeframes. The company is likely to leapfrog
HSPA+, so it is vital it fills the technology vacuum as rapidly as possible. Most other operators are looking at
2010 or 2011 at the earliest, with many looking to upgrade their mobile networks with HSPA+.
Many operators – like Vodafone and Orange – will continue to adopt a dual strategy of deploying LTE in their
developed markets and WiMAX in developing markets, where subscribers have less access to the Internet.
Some commentators have also seen the move into WiMAX by some of the world biggest mobile operators as
a political move to maintain pressure on the LTE vendors to accede to their demands.
Mobile operators want concessions from the LTE vendors on a number of fronts. Firstly, they want the
standards bodies to move faster before WiMAX gains too great a foothold. Secondly, and more importantly,
they want LTE to be cheaper than its predecessor, WCDMA. Operators like Vodafone and T-Mobile have
been vocal in their criticism of the licensing costs involved in WCDMA which many blame upon the role of
Qualcomm in the IPR process. Operators are determined there should be more clarity in IPR and that
licensing costs should not be prohibitive.
When rollouts begin around 2010, initial launches are likely to be cautious and extended to urban areas where
population density makes the business case strong. Many operators are looking to launch with datacards first,
targeting the high spending business community before the more fickle and low-spending consumer
population.
Although LTE is not a full 4G technology, it is now seen as the logical next step to 4G and over the next 2-3
years will be embraced across the world. Despite this, timing for rollout is going to vary considerably as some
operators choose to augment their networks with WLANs and dual-mode handsets while others choose to
squeeze the most out of HSPA through upgrades and enhancements.
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The LTE Business Case: Operator and Vendor Strategies
Table of Contents
A. INTRODUCTION ............................................................................................... 1
A.1 | The evolution of mobile broadband 1
| MIMO ............................................................................................................................................. 7
| Beamforming ................................................................................................................................. 8
| iBurst.............................................................................................................................................. 9
| UMB............................................................................................................................................... 14
| WiMAX........................................................................................................................................... 14
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The LTE Business Case: Operator and Vendor Strategies
| Product Classes............................................................................................................................. 32
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The LTE Business Case: Operator and Vendor Strategies
H. COMPANY PROFILES.................................................................................... 53
H.1 | Vodafone 53
| Background.................................................................................................................................... 53
| Strategy ......................................................................................................................................... 54
| Backhaul ........................................................................................................................................ 54
| Spectrum strategy.......................................................................................................................... 55
H.2 | T-Mobile 58
| Background.................................................................................................................................... 58
| Strategy ......................................................................................................................................... 58
H.3 | Orange 60
| Background.................................................................................................................................... 60
| Strategy ......................................................................................................................................... 60
| Background.................................................................................................................................... 62
| Strategy ......................................................................................................................................... 62
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The LTE Business Case: Operator and Vendor Strategies
H.5 | Verizon 67
| Background.................................................................................................................................... 67
| Strategy ......................................................................................................................................... 67
I. GLOSSARY ...................................................................................................... 69
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The LTE Business Case: Operator and Vendor Strategies
List of Figures
Figure A-1: Mobile network generations & deployment timeframe..................................................................... 1
Figure D-3: Number of commercial HSPA networks per peak download speeds ............................................ 38
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The LTE Business Case: Operator and Vendor Strategies
List of Tables
Table A-1: Comparisons of key evolutionary technologies ................................................................................ 4
Table C-1: FDD & TDD frequency bands defined in 3GPP (June 2007).......................................................... 21
Table H-1: Vodafone data revenues as a percentage of service revenues, 4Q06-4Q07 ................................. 53
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ARCchart Ltd
27 Holywell Row
London EC2A 4JB
United Kingdom