The LTE revolution has only just begun and networks try to catch up

26 Sep

As networks expand LTE coverage and close down 2G systems, a lot of service providers will have to overhaul their businesses

cellphone tower

Companies relying on M2M communications will face tough choices by the end of the decade. Most wireless modules that provide security surveillance, industrial automation, environmental monitoring, energy management, pet tracking and whole slate of other applications will become obsolete as 2G networks, which date back to the late-1990s, are shut down around the world. Modules in devices embedded in buildings and machinery, as well as those in mobile devices, will have to be switched out. “It’s absolutely a painful, painful process,” says Kieran McNamara, manager of technical sales for global M2M & Internet of Things partnerships at Rogers.

Still, companies that play their cards right can leverage the newer networks for better applications and more efficient communications. The question is when and how to make the move.

Industry watchers predict most telecoms will abandon 2G by 2020, starting with AT&T in 2017. Carriers are redeploying their spectrum to 3G and LTE/4G networks that provide better speeds and more bandwidth for the data-hungry consumer market. With an estimated 90% of M2M communications still using 2G networks, that leaves a lot of devices looking for a new home. “You have to be on a network that exists. If you don’t have a network, you don’t have an application,” says Alex Brisborne, president and CEO of KORE Wireless, a provider of M2M services with close to two million devices operating on 11 carriers around the world.

The newer networks do offer advantages. LTE provides much more bandwidth than 2G, allowing for richer real-time video and voice applications. The cost of data is cheaper per megabyte. As well, LTE also has less latency than 2G, which can take 30 seconds or more to get a data connection. Waiting for a vending machine to process a credit-card transaction, for example, will be a whole lot less frustrating. That convenience may drive revenue and create new business opportunities.

“When the business models works, you’re going to see people creating all sorts of new solutions when they move to 4G,” says John Horn, president of Cincinnati, Ohio-based Raco Wireless, which signs up more than 100 solution partners every quarter. “Sometimes I feel like a kid in the candy store because all the time, I see so many new creative things nobody’s thought of before.”

LTE also provides better in-building coverage, allowing devices to be placed in locations that would have been dead zones with 2G and 3G. In rural areas, LTE towers provide more coverage than comparable 2G towers. “You’re going to see much better connectivity,” says McNamara.

Many companies have been reluctant to upgrade from 2G because it still offers the widest geographic coverage. That will change rapidly in the next couple of years as 3G and LTE expand. Costs are also a major obstacle. Though businesses using large quantities of data may save money on LTE, most M2M applications are modest data users. And hardware for 3G and LTE networks can be substantially more expensive, as much as eight times more expensive, says Horn. “When someone has thousands or tens of thousands of devices out there and their baseline module cost is $10 and now it’s $75, it’s really hard to make the metrics work,” he says.

Balancing coverage against cost is tricky. Horn suggests waiting a couple of years for LTE equipment to drop in price, then jumping straight from 2G to LTE, as he predicts LTE coverage will expand more quickly than 3G coverage. Brisborne agrees that 3G will have a significantly shorter life span than 2G and may be worth skipping. On the other hand, Vincent Pavero, director of products and innovation at Montreal-based telematics company IMETRIK Global, says that for a considerable time, 3G may play the M2M workhorse role that 2G has been playing until now. IMETRIK is currently ripping out 200,000 2G devices each year. “We have very good deals on 3G chips already. By the end of the year, operating 3G products will be cheaper than operating 2G products,” says Pavero.

McNamara advises against an LTE-only conversion at this point, suggesting that upgrades should be 3G/LTE compatible until LTE coverage increases. Backward compatibility will cost you though. “Especially LTE with 3G since 3G has a lot of intellectual property that’s privately held,” says McNamara. Unfortunately, backwards compatible LTE and 2G-only products are not common.

International enterprises hoping that LTE devices, unlike 2G and 3G devices, will be able to function anywhere in the world will be disappointed. Brisborne points out that LTE comes in 43 frequencies “depending on the regulator and how you want to implement it.” A universal standard remains over the next horizon.

Source: http://www.canadianbusiness.com/insights/the-lte-revolution-has-only-just-begun-and-networks-try-to-catch-up/

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