WiMAX – A Business Case

Cellular Technologies and Services of the Future

Tuesday, April 10, 2007Penn Club, New York

Pradeep Samudra, Independent Consultant

© 2007 Gerson Lehrman Group Inc., All Rights Reserved

Council Member Biography

Pradeep Samudra, now an independent consultant was most recently (10/06) a Vice President at Samsung Telecommunications. He has over 25 years of experience in the telecommunications industry. He is a holder of 4 recent patents and 6 pending applications in the area of IP/MPLS/ATM routing and is knowledgeable about the business and technologies of CDMA/GSM/OFDMA/xDSL/VoIP/IPTV and FTTx technologies. He is also experienced in developing and marketing broadband and wireless network systems and products. Mr. Samudra has spoken at internationally recognized conferences on topics ranging from market and technology forecasts, planning and deployment and is a member of the Board of Directors for the prestigious industry standards alliance ATIS. Recently he managed nationwide VoIP deployment and an IPTV trial in the US. He is knowledgeable in the telecom vertical segment, key players, their strategies, and prospects for future agents of and in next-gen wireless technologies such as 3G/3G LTE/Super 3G and 4G, broadband access and core networks.


Table of Contents

► Cellular Technologies and Services of the future

► Migration from 3G to B3G/4G - what are the drivers? What are costs?

► Competition: Service providers, vendors and technologies

► What are the issues?

► Threats and Opportunities

Pradeep Samudra April 2007 of 25

Generation Commercializ

ed

GSM/UMTS (3GPP)

CDMA (3GPP2)

IEEE Capacity (bps)

2G 1998 GSM 1X RTT 30-90 K

2.5G 2002 GPRS/EDGE 1X EVDOr0 150K

3G 2006 WCDMA 1X EVDOrA 400-700K

3.5G 2009 HSPA+/OFDMA (LTE)

nX EVDOrCUMB (TEF)

2007: 802.16e (WiMAX)

1-15M

4G 2012? 1

OFDMA/MIMO 2010: 802.16m

100M

Cellular Technologies3G = 1st Gen of Mobile Broadband

More “monetizable” bandwidth is a key driver.

LTE – Long Term Evolution (3GPP)MIMO – Multiple Input/Multiple Output OFDMA – Orthogonal Frequency Division Multiple AccessTEF – Technology Evolution Framework (3GPP2/CDG)UMB – Ultra Mobile Broadband

1. Technology

1 The ITU expects “4G” as rolling out starting 2015.


Next Gen Definition – B3G and 4G (IMT-A)

• High data rates over efficient spectrum utilization (up to 10 b/s/Hz) using advanced antenna techniques

– 100 Mbps @250 KMph or 1 Gbps nomadic/portable

• IP/Web based services with QoS fro peer-peer services

• Reconfigurable/dynamic service provisionable (sensor/cognitive networks)

• Seamless roaming among heterogeneous1 networks

• Scalable (up and down) in cost, performance and power

• Backward compatible

Distinctions between Portability, Nomadicity and Mobility are eliminated.Connectivity is ABC – Always Best Connected.

1. Technology

1 Could include 2/2.5/3G/LTE, WLAN/WMAN/WPAN, DVB/DAB

IMT-A – International Mobile Telecommunications (Advanced)


Mission – B3G or 4G

Source: Wireless World Research Forum

Ubiquitous access, with pervasive, dynamically provisionable services

“Any Service, Any Place, Any Person, Any Time, Any Network, Any Device”

1. Technology

MAGIC - Mobile multimedia, Anytime/any-where, Global roaming, Integrated wireless and Customized personal service


Cellular Technology-Mobility Map

High data rates, high mobility along with wide area coverage are the hallmarks of future Mobile Broadband services

Source: Telephony/Tellabs, Inc., 2006

1. Technology - Supply


Projected Capacity Needs - Developed Market (EU)

1. Services - Demand


Next Gen Services – Video Centric

All we need is a small number of “sticky” services (e.g., caller-id in 90’s)

• MCBCS– Multicast and Broadcast Services– But are FLO and DVB-H competitive or complementary

to 3G?

• Personal Security/Safety, Remote Device Management

• Navigational– Location centric

• M-Wallet– Swiss army knife: phone/PDA/map reader/ credit

card/…

• Collaborative Citizen Journalism– Mobile vlogs

1. Services - Drivers

FLO – Forward Link Only (FLASH-OFDM based video broadcast)DVB-H – Digital Video Broadcast – Handheld, based on DVB-T


High Data Rates Can Create New Business Opportunities

B3G

and 4G

1. Services – Revenue Potential

Odds are good that mobile data services become popular.


Next Gen: Questions• Will consolidation of standards occur? Will it be a

good thing?– How many variants of OFDMA do we need?– The NMGN group of operators are not quite united– Vendors want to hedge bets over multiple standards (IPR)

• Will a few “sticky” applications emerge to exploit the high data rates?

– Or, the additional capacity may not “buy” much while it may “cost” too much?

– Or, will voice remain the “killer app”?

• Will the cost of backward compatibility justify its benefits?

– Or, will some disruptive paradigms provide better cost/benefits?

• Will the technical challenges of integrating everything overwhelm the solution space?

– Or, will opportunistic, point-solutions abound?

• Will operators view the migration to NG as tactical (cost centered) or strategic (forward looking)?

1. Technology and Services

Build it and they will come?


Issues When Migrating from 3G to B3G or 4G

• Spectrum issues– Availability of suitable bands and bandwidths (see

next slide)– Cost: auctions or beauty contests?

• Business model shift ?– Licensed spectrum for premium services

→ unlicensed spectrum for recreational or non mission-

critical services

• Compatibility: an Albatross– E.g., EVRC (CDMA) or AMR (WCDMA) to VoIP

transcoding while maintaining voice quality

• Standards Issue– Incomplete specifications (e.g., 3G Layer 2) left to the

implementer

2. Migration

EVRC = Enhanced Variable Rate CODECAMR = Adaptive Multi-Rate

Isolated access networks are purpose-built and may not share back office


Scope of Migration• Vertical

– Within a family of technology, e.g., CDMA → UMB → TEF or UMTS → HSPA → LTE

• Horizontal– Within a service offering, e.g., FMC

(Fixed/Mobile Convergence)• Cross

– Across service providers, e.g., How to charge for FMC roaming

• Dynamic– Introduction of new situations, e.g., New

handheld app not registered for a “patch” during roaming

2. Migration

Putting it together is too complex and sophisticated for existing solutions

TEF = Technology Evolution FrameworkLTE = Long Term Evolution


Steps of Migration• Start with the Core network

– IMS/service provisioning– All-IP infrastructure

• Complete vertical migration

• Opportunistically complete horizontal migration

• Same for geographies covered

2. Migration

Depending on costs involved, migration can only begin as spotty/sporadic and then spread to all-

pervasive.


Cost of Migration to 4GSome sample costs in 3G space1. Backhaul upgrade

– $30-60M to convert 10,000 base stations from 2 to 4 T1’s

2. WiMAX (Sprint) buildout– $3B for RAN over 3 years to cover 200 M pop

3. Migrating CDMA2000 to 1xEVDOrA (Verizon Wireless)

– $6B over 3 years for a “nationwide” footprint

• 4G Hardware provides high speeds, QoS and control mechanisms; hardware costs tend to be “commoditized”, so volume will drive them down.

• The key costs for 4G lie in the software that ties everything together

2. Migration

Software being labor intensive, 4G costs can be considerably high,

requiring higher returns than 3G


Who Gets to Play?- Service Providers• Cellular Mobile Service Providers

– Established world wide with CDMA and UMTS

• Broadband Wireless Providers– Competitive carriers plus some established

ones

• Fixed (wireline and wireless) providers– Municipalities, chain stores

• Broadcasters– Local TV Direct to Mobile

3. Competition

Some well funded startups will participate and surprisingly be successful.


Who Gets to Play?- Equipment/Device Vendors• Cellular Mobile Infra and handset/PCMCIA card

Providers– Established world wide with CDMA and UMTS– Alcatel-Lucent, Ericsson, Nokia-Siemens, Huawei,

Samsung, too many others

• Enterprise equipment providers– Established and start ups– Cisco, Avaya, Siemens, several others

• Hardware chipset providers– RFIC, Baseband processors, Network processors,

DSPs– Established (Intel, TI, Broadcom) and startups

• Application Software Providers– Mostly creative enterprises– Startups around the globe

3. Competition

Successful startups are rewarded when bought out by large vendors.


What is it Played on?- Technology• Three parallel efforts using OFDMA

– UMTS (3GPP): OFDMA/FDMA– CDMA (3GPP2): CDMA/OFDMA/TDMA– IEEE (WiMAX) 802.16m and 802.20: OFDMA/OFDMA

• Flat network of IP– Straight layer 3– QoS is a serious issue that will get resolved

• IMS– NGOSS (Next Gen Operations Support Systems)– SOA (Service Oriented Architecture)

3. Competition

IP over OFDMA is the next big technology (after TDMA and CDMA).


802.16/WiMAX – “A Stepping Stone”

802.16/WiMAXSupport for

high data rates

Open standards based network

Support for Mobility &

Next Generation

services

Support from major industry

players

IEEE 802 CommitteePhysical Layer- RF, Power, Modulation, Coding- Fixed and MobileMAC Layer- Framing, Security, Scheduling- Handover/MobilityStandards- 802.16d and e (Ref interface R1)

WiMAX ForumEnd-end Networking- Reference architectureSignaling, Network Mobility-MessagingStandards- Ref interfaces R2-R8 Equipment Certification- Europe and Asia

WiMAX is a Data Service

3. Competition: Cellular vs BWA


Competitive Access Technologies (Q1 2007)

WLAN802.11n

Cellular 3G

Cellular 3.5G

cdma2000

Cellular 3.5G

UMTS

802.16e/ WiMAX

1 Technology

OFDM/TDM

T/F/CDMA CDMA/OFDMA

OFDMA/FDMA

OFDMA/OFDMA

2 Spectrum Unlicensed Licensed Licensed Licensed Licensed

3 BW Allocn Fixed Semi-fixed Flexible Flexible Flexible

4 Data rate* 70Mbps 1Mbps 70Mbps 40Mbps 70Mbps

5 Distance 50 M 2-5 KM 2-5 KM 2-5 KM 2-5 KM

6 Voice VoIP TDM CDMA/VoIP

TDM/VoIP VoIP

7 Video Streaming, HD

Streaming Streaming, HD

Streaming, HD

Streaming, HD

8 Security MAC/IP IP IP IP MAC/IP

9 QoS MAC TDM/ATM

MAC MAC MAC

10 Mobility Portable Mobile Mobile Mobile Mobile

11 Cost (incr)

Low Medium High High Medium* Typical of the several possible Bold font = strength of the technology

3. Competition - Comparison


Issues• Universal Spectrum

– 2.5 in US, 3.5 in 77 countries

– Unlicensed vs licensed– Broadcast TV

Spectrum: A wildcard– RF cost is 40% of total

• Technology Maturation– Large investment by

large players– Technology evaluation

is complex– IPR fees

Bringing new technology to market (Cost $$) vs Bringing new customers (apps) (Revenue $$) to

market.

4. Issues

• Technology Competition– Spectrum

moratorium– Co-operation

(“CLEC” status)• Backhaul

– Lack of suitable capacity & connectivity

– Cost is 25% of total• End to end Network

– IMS/OSS/BSS integration timeline

• Applications– Ecosystem (OS, UI,

eCommerce models)


Issues - Content

• Crucial Element– Video service depends on it

• Future of Broadcast Video

• Future of Linear Video– Vs. time and space shifted programming

• Content Owners are Inflexible– Learnt from the music industry

• Content Owners will Make the Most $$ – Network (or “pipe”) providers believe so

Content owners’ non-cooperation can be an “App Killer”

4. Issues


Threats and Opportunities

• Risks– Technology– Market

• Rewards– Early movers’– Innovators’

• Critical Success Factors– Spectrum issues resolved– Harmonization among 3G LTE/TEF/WiMAX– Attractive price points– Application “pull” leading to competition

5. Conclusion

Bigger bets will be placed for larger payoffs


Backup Slides


WCDMA (3GPP) Performance Roadmap

Latency (ms)

Capacity DL (Mbps/5 MHz)

Peak DL(Mbps/5 MHz)

Capacity UL (Mbps/5 MHz)

Peak UL (Mbps/5 MHz)

• 100

• 2.5

• 4.3

• 1

• 0.384

• 75

• 2.5 (4-5)

• 14

• 1-2

• ~2

• 30-50

• 4-5

• 14

• ~2

• 4-6

• 10-15 10

• 4-5* 8-10

• 14* 25

• ~2 4-5

• 4-6 12.5

• HSDPA

• Enh UL• HSDPA Ph2• (GRAKE)

• MBMS• Enh UL Ph2

• 3G LTE

• 150

• 1

• 0.384

• 1

• 0.064

2004 2005

• R99

2006 2007-8 2009WCDMA OFDM (Targets)

OFDM on 20 MHz gives 100 / 50 Mbps in DL / UL resp. 2x2 ant.enna assumed for the DL

* With 2x2 MIMO in DL these numbers will be higher


Cdma2000 Roadmap

(Source: CDG)


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WiMAX – A Business Case

Technology

Transcript of WiMAX – A Business Case