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Expanding Mobile Wireless Capacity:

The Challenges Presented by Technology and Economics

Richard N. Clarke Assistant Vice President AT&T – Global Public Policy [email protected]

Phoenix Center Annual U.S. Telecoms Symposium

Washington, DC

3 December 2013

Overview of presentation

What is the challenge?

What methods are available to expand capacity?

How effective has each been?

How effective may they be in the future?

Without much more raw spectrum, these methods will not be able to keep up with forecasted demand

Alternatively, more severe price adjustments may be necessary to equilibrate the market

The analyses and data presented in this paper are intended to portray the U.S. mobile wireless industry on a national average basis. They may not be representative of any particular U.S. geographic region or mobile operator, including AT&T. No proprietary AT&T data were used in performing these analyses. The conclusions developed in this paper are those of the author, alone, and should not be construed as representing any official position of AT&T.


What is the challenge?

Rise in data usage is driving mobile demand

Notes: Reported traffic does not include DVB-H, Wi-Fi, or Mobile WiMax. Voice does not include VoIP. M2M traffic is not included.

Total global traffic on mobile networks, 2007-2013

And U.S. forecasts predict this to continue

Notes: Voice and Data TB figures for 2010-2012 are from Fig. 1. Forecasted 2013-2022 Voice demand growth assumes Voice TB remain flat at 2012 levels. Cisco (2013) figures for Data TB are used for 2013-2017 Data demand. These Data TB figures are extrapolated forward for 2018-2022 assuming that Cisco’s forecasted demand growth rate for 2016-17 decays by 10% each year over the 2018-2022 period.


What are the tools to address growing demand?

More spectrum

By deploying more radio spectrum, capacity is increased

But the spectrum usable for mobile wireless is very scarce

It is being used for TV or by the government

These entities have had little economic incentive to relinquish it

U.S. Spectrum Growth

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fic in

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z of

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ctru

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Spectrum in 4G LTE use

Spectrum in ~3G use

Spectrum in 2G use

Spectrum in 1G use

Total Allocated Spectrum

Traffic

More spectrally efficient technologies

Newer wireless technologies can carry more bps/Hz

As customers are migrated to these technologies, more total traffic can be handled by a given amount of spectrum

Spectral Efficiency (bps/Hz) Growth of Effective Capacity

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apac

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(19

85

=1

) 4G LTE capacity

~3G capacity

2G capacity

1G capacity

Increased “reuse” of spectrum

By deploying more towers and splitting cells, capacity within a geographic area is increased by “reusing” spectrum

This has been done intensively, but it is expensive as its cost scales fairly linearly with cell counts

U.S. Cell Site Growth Cell Splitting

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Relative contributions

Historically, more spectrum, more efficient technologies and increased reuse have allowed capacity growth to keep pace with traffic demand, but this is about to change

Capacity growth relative to traffic growth

Note: Displayed historical capacity index doesn’t include improvements in network packing that may have occurred from 1985-2000.

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(198

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Reuse Index

Spectral Capacity Index

Total Capacity Index

Traffic Index


Will future tools be adequate?

4G LTE and LTE-Advanced

These technologies offer substantial improvements through:

Orthogonal frequency division multiple access (OFDMA)

Multiple input multiple output (MIMO) transmissions

Coordinated multipoint (CoMP) transmission/reception

Lift in spectral efficiency over current ~3G is roughly 45% for LTE and 135% for LTE-Advanced

Supports more functional small cells (Het-nets) which make more intensive spectrum reuse more economic

Reduced latency permits VoLTE to replace separate voice networks, which enables more efficient network packing

But LTE’s higher throughput speeds and lower latency increase mobile wireless’ functionality – which encourages further usage growth!

Contributions to future capacity growth

300 MHz more spectrum by 2015 is promised in the FCC’s National Broadband plan, but so far little has been allocated

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wth

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ice

s (2

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Raw Spectrum

Migration to Higher G Technologies

Reuse with 4G+ Het-net Lift

Network Packing

Dashed lines assume 300 MHz spectrum augment

But all of these may still be inadequate

300 MHz more spectrum is not adequate to keep capacity ahead of expected demand growth over the 2012-22 period

About 560 MHz needs to be added to prevent deficits

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gro

wth

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ces

-Log

arit

hmic

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le (

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)

Capacity Index with Current Spectrum

Capacity Index with 300 MHz of additional Spectrum

Demand Index


Summary

Summary

Mobile wireless technologies have become ever more capable

Faster speeds

Lower latency

Greatly improved data carrying capacity

But demand is growing even faster

Meeting the challenge will require:

Even more capable technologies; and

Even more intensive spectrum reuse; and

Much more raw spectrum – about 560 MHz

The alternative is price adjustments to equilibrate the market, which may suppress desirable usage growth

Full paper is forthcoming in Telecommunications Policy,

and is currently available at: http://ssrn.com/abstract=2197416

http://ssrn.com/abstract=2197416

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