Mobile Ubiquity

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LTE spectrum utilization

Its a jungle out thereSpectrum resources are finite. Despite the great advances in technology that the telecom market has seen over the past 30 years, history teaches us the simple truth that the operators with the most spectrum win and this will continue well into the Giga era, in developed markets as well as developing; this means the utilization of every nanometer of spectrum for LTE, regardless of whether or not it is golden, advanced, or paired.

By Gary Yiu & Alessandro Casagni

Developed market concerns

h e d a t a s u r g e i s a w e l l documented phenomenon, b u t w h a t i s n o t s o we l l documented is the fact that it

has consistently exceeded expectations. The ITU-R reported that the data traffic volume for 2010 was over five times its estimates from 2006, while the traffic seen by some operators in 2011 was even greater than some of the those same forecasts for 2020. In other words, theres a good chance that even the scariest of recent predictions concerning data traffic levels by 2015 or 2020 are conservative. In some of the advanced markets , 3G data traf f ic has been doubling annually, and even monthly or quarterly in some highly-congested areas.

The European Union has responded with i t s recent ly approved Radio Spectrum Policy Programme, which def ines an object ive of a l locat ing 1200MHz to mobile broadband by 2015, including spectrum already in use. This will certainly aid the progress of LTE, but the modest slices of FDD spectrum being made avai lable to operators will no doubt motivate them to scrounge around for TDD spectrum elsewhere.

TDeveloping market concerns

LTE spectrum is also a matter of concern in the developing world, though for somewhat different reasons. Smartphone penetration may still be low in these countries, but many of them have 2G networks already under strain from basic services, and this could mean a lowering of barriers to 3G operator participation. The incumbents would probably view this as a lowering of ARPU, and would therefore take a serious look at LTE as a way to stay on good terms with both their VIP customers and low-ARPU users, as LTE could be used to clear out the data hogs who are hindering the service quality for the latter.

A converged LTE ecosystem

Despite the early successes of the former, both FDD and TDD share the same ecosystem and are now of equal importance to operators. Most LTE networks currently in use are based on FDD, but thanks to the data surge, TDDs asymmetric nature, and the scarcity of FDD spectrum, the ecosystem is converging.

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FDD and TDD technology

FDD and TDD share 90% of the s ame technology, and both are defined and a part of the 3GPP standard. FDD uses paired spectrum, where equally-sized channels are used for both upstream and downstream communication. Most mobile operators currently use it in frequency bands such as 700MHz/800MHz (band 20), 1800MHz (band 3), 2600MHz (band 7), and AWS (band 4).

With TDD, a single unpaired spectrum channel is used. Without dedicated channels, bidirectional communication is done by allocating different time slots within the channel. Thanks to its asymmetric nature, TDD is more flexible in terms of bit rate, making it more suitable for the real-life dynamics of wireless networking. Mainstream frequencies include 1900MHz (band 39), 2300MHz (band 40), 2600MHz (band 38 & 41), and 3500MHz (band 42 & 43).

Spectrum: The priciest real estate of all

Roughly 800MHz of overall bandwidth suitable for LTE TDD is available, making it very attractive for operators looking to stay on the cutting edge. While over 600 TDD spectrum licenses have been released globally, over 40 percent remain to be used. As even more TDD spectrum becomes available in the coming years, it will account for a greater portion of the overall body. In Europe, TDD spectrum (mostly from 50MHz of the 2.6GHz band) available in 2012 accounted for 14% of overall LTE bandwidth. This ratio will rise to 38% in 2015 and 45% in 2020, primarily

due to the full release of 100MHz in 2.3GHz and 400MHz in the 3.5GHz band.

However, TDDs rise is not just a matter of spectrum availability, as FDD is proving more useful in theory than it is in practice. One primary hurdle has been frequency clearance. The U.S. was able to get 700MHz cleared earlier than most places, leaving 1800MHz refarming a hot topic of conversation around the world, but this could take a long time in some cases. Frequency blocks at 800MHz started becoming available in 2011 in Western Europe, but they havent come cheap, and the rest of the world is probably still a long way off in terms of frequency clearance.

TDD has enjoyed a cost advantage in recent years, but this looks to be on the wane as cash-strapped governments are looking to raise revenue by any means necessary. In 2010, Austria completed a spectrum auction where the price per MHz per population was EUR0.029 and EUR0.012 for 2.6GHz FDD and TDD, respectively (a 59% advantage for TDD). One year later, the figures rose to EUR0.057 for FDD and EUR0.046 for TDD in Belgium. Both economic conditions and growing acceptance of TDD as a viable technology are probably in play here.

Upcoming spectrum releases lie primarily beyond 2GHz, where TDD dominates, making it the likely choice for operators not content to wait for more FDD frequency to open up. This would indicate that the future of networking for the rest of this decade will involve the technological convergence of LTE FDD/UMTS/GSM with LTE TDD/UMTS/GSM into LTE FDD/LTE TDD/UMTS/GSM.

Kbps

Mbps

Gbps

LTE TDD/LTE FDDUMTS 2100MHzGSM/LTE 1800MHzGSM/UMTS 900MHz

UMTS 2100MHzGSM 1800MHzGSM/UMTS 900MHzGSM 1800MHz

GSM 900MHz

900MHz

1500MHz

GSM

UMTS

CDMA

TD-SCDMA

WiMAX

LTE FDD

LTE TDD

700MHz

800MHz

850MHz

1900MHz

2100MHz

2300MHz

2600MHz

3500MHz

1700MHz

1800MHz

Figure 1 Full spectrum migration to LTE

Source: Huawei Wireless MI

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Device availability

According to a GSA report released in November 2012, the number of LTE devices has tripled since the same time a year ago, reaching 560 models (including 151 smartphones) furnished by 83 manufacturers; 115 of them supported LTE TDD. Multi-band, multi-mode LTE-TDD Mi-Fi, USB, and CPE devices are commercially available from all major chipset and device manufacturers, and primarily support bands 38 to 43 (as well as the major FDD/UMTS/GSM bands), while twelve multi-mode LTE TDD smartphones are currently on the market. Others are joining in, such as those intended for the 3.5GHz LTE TDD network launched in the U.K. on June 28, 2012.

Global TDD spectrum development and rollout

As of November 2012, over 32 LTE TDD networks have been deployed globally, with eleven having launched commercial service. All BRIC regions are firmly committed to LTE TDD, with operators in Brazil, India, and Russia already having commenced commercial operations, and China Mobile in the trial network stage. These networks cover 1900MHz, 2300MHz, 2600MHz and 3.5GHz, which are the main drivers for global ecosystem development and terminal cost reduction.

The ample bandwidth for these TDD bands could give an ambit ious operator absolute advantage, with almost 100MHz (2.3GHz) available in Australia, 45MHz (2.6GHz) available in Belgium, and 124MHz (3.5GHz) available in the U.K. Such bounty is rare with paired spectrum.

LTE TDD is being pioneered all over the world. STC constructed a 2.3GHz LTE TDD network in Saudi Arabia (launched in September 2011) while modernizing its existing GSM/UMTS network at the same time. Optus is implementing a converged FDD/TDD strategy where 1800 and 2300MHz are combined to service the majority of Australias population centers. SoftBank has made headlines with its record-breaking LTE TDD/AXGP buildout as well.

China Mobile is currently undertaking a large-scale LTE TDD trial involving the 1900, 2300, and 2600MHz TDD bands. Some 1000 base stations were rolled out in six cities in the first phase (completed in September 2011), while 20,000 base stations are currently being tested in the second, scheduled to end in December 2012. In 2013, the operator plans to gradually upgrade an additional

200,000 TD-SCDMA base stations to LTE TDD. However, this is not the whole story. In June 2012, China Mobiles Hangzhou branch announced and demonstrated successful roaming between its own LTE TDD network and an FDD network in Hong Kong.

This latter milestone in particularly important as frequency harmonization is crucial to both an operators roaming policies and MBB services, as well as national policy goals and the overall smartphone market. Regulatory certainty is key here, but work is needed regarding frequency arrangement, coexistence issues, and cross-border coordination.

How do we get spectrum?Mergers & acquisitions

The quest for spectrum has turned the telco world into something resembling a soap opera. Every day brings news of hook-ups, break-ups, thwarted desires, and a lot of whining and crying related to them. Though a certain high-profile wedding between two titans in the U.S. has failed spectacularly, the drama continues.

In October 2012, SoftBank, which has already deployed a massive LTE network in Japan that employs TDD spectrum, acquired a 70% share of Sprint worth USD20 billion that will see the operator greatly expand its businesses overseas. Such a blockbuster deal is no doubt stirring interest in TDD spectrum the world over, both in those who have it and those who want it. In May 2012, Bharti Airtel, the Indian giant that owns TDD licenses in four coverage zones, kicked off its joint venture with India Qualcomm in a deal worth USD165 million, enabling the operator to extend its LTE TDD coverage to another four zones, including huge potential markets such as Mumbai and Delhi.

A l l t h i s d r a m a i s n a t u r a l a s b u r s t s o f M&A activity typically occur during times of technological transition as operators look to regroup ecosystem resources. As TDD spectrum gains in prominence, former bit players are being thrust into the limelight thanks to their once-shunned higher-frequency holdings. Economic conditions are also in play here as a lot of low-margin operators in crowded markets are looking to sell (think France Telecom SAs sale of Orange Switzerland to Apax for USD2.1 billion) while they plan their expansion into the last remaining bits of virgin territory when it comes to 3G and LTE.

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Table 1 Global LTE TDD spectrum status (key markets for illustration only) Editor: Jason jason.patterson@huawei.com

Traditional auctions

It is vital that the LTE bandwidth available for operators be wide enough to enable the high-speed performance that the market expects. Regulators should ensure that operators get at least 20MHz in TDD or 2x10MHz in FDD contiguous bandwidth so that long-term business viability can be guaranteed. However, full availability of a new frequency band for LTE is not always observed in some countries. The EU is working on a more dynamic approach (see below) called Licensed Shared Access (LSA).

Spectrum release and harmonization

Harmonization is the key moving forward, as it is necessary to both uptake and standardization. Both operators and vendors will be falling all over themselves to offer LTE roaming for road warriors, but this wont happen without more regulatory certainty, as work remains to be done in terms of frequency arrangement, coexistence issues and cross-border coordination (more in the next section). It also wont happen until the bands in use become less regional in nature; this means 2.3GHz moving beyond the Asia-Pacific region to Europe and the U.S., and 3.5GHz moving from Europe in the other direction.

Licensed Shared Access (LSA)

When spectrum clearing is not viable, LSA allows spectrum to be shared when not in use. Basically, LSA is a framework where incumbents share spectrum with LSA users in accordance with certain pre-defined conditions, which may be static (specific exclusion zones or times allowed for operation) or dynamic (geographic/time sharing, on-demand authorization by LSA licensees, or on-demand restrictions imposed by incumbents). In other words, LSA allows spectrum sharing on the basis of frequency, location, or time. However, a workable LSA agreement must ensure predictable QoS for all stakeholders. The specifics of this approach have yet to be ironed out, but when they are, LSA concepts could prove a good reference for global regulators looking to speed up spectrum release.

This would be none too soon, considering the mind-boggling figures being bandied about by industry experts as to how much data traffic will be transmitted by in the near future. Operators looking to keep their margins healthy would be wise to not be too fussy about where they get their spectrum, as LTE TDD is commercially proven and convergence would seem the way forward for any operator planning on keeping the high-rollers and bandwidth hogs happy for the next several years. As this technology flourishes, winning the spectrum wars becomes more a matter of scrounging up spectrum wherever you can find it, as opposed to outbidding your competitors and romancing the regulators. In other words, its simple numbers whoever has the most wins.

1.9GHz 2.3GHz 2.5/2.6GHz 3.5GHz

BRICs

Brazil

Russia

India

China

Asia-Pacific Region

Australia

Hong Kong

Indonesia

Japan

Korea

Malaysia

New Zealand

Philippines

Singapore

Taiwan

Thailand

Europe

Belgium

Denmark

Finland

France

Germany

Ireland

Italy

Norway

Poland

Spain

Sweden

U.K.

MENA

Ghana

Nigeria

Oman

Saudi Arabia

North America

Canada

U.S.

Sources: Huawei Wireless MITDD Released (LTE TDD) TDD Release Soon / Planning