Unpaired spectrum and the promise of affordable capacity

Unpaired spectrum could offer a cost-effective solution for mobile operators that want to meet the growing demand for data. However, several drawbacks of time division duplexing need to be overcome to unlock the capacity potential of this spectrum.

Mobile operators are having to meet growing demand for data, and yet their ARPUs are flat. They therefore need cost-effective solutions to deliver more data. One way of adding capacity to a network is to provide it with more spectrum. Conveniently, a lot of unpaired spectrum is becoming available in higher frequency bands, which is typically less expensive to acquire than paired, sub-1GHz bands.

Unpaired spectrum can be used by transmission technologies using time division duplexing (TDD), which allows both the uplink and downlink to be carried by the same frequency band. In addition, the use of the TDD mode of LTE allows for an asymmetric uplink/downlink ratio (see Figure 1), ideally suited to cater for the increasingly asymmetric data consumption that might be expected in the future. Operators are therefore looking carefully at whether the use of TDD in unpaired spectrum may be a solution to the capacity crunch that they are facing.

Figure 1: Difference in spectrum use between FDD and TDD [Source: Analysys Mason, 2012]

 

There are a number of drawbacks to TDD that must be overcome. In earlier generations of cellular technology, such as 3G, a major issue was that the integration of TDD with FDD did not emerge in a timely way in most world regions. One reason for this was that the TDD and FDD modes of 3G use different air interface schemes. However, in LTE both the TDD and FDD modes are based on a similar scheme – orthogonal frequency division multiple access (OFDMA) – resulting in greater commonality between the two modes, which should facilitate TDD–FDD integration.

One drawback of TDD is that it requires a guard period between the uplink and downlink transmissions during which the signal can travel between transmitter and receiver before the direction of the communication is reversed (see Figure 1 above). However, this gap is proportional to the distance between the transmitter and the receiver, so the inefficiency is minimised if TDD is used to provide short-range services, as in capacity cells.

Another issue with TDD is that operators using adjacent blocks of spectrum need to synchronise their networks so that both are sending uplink and downlink transmissions at the same time. If there is a misalignment, the base station trying to receive uplink traffic will receive interference from the base station transmitting downlink traffic. The same problem can occur between handsets. Currently, synchronisation requires operators to put in place a separate network element that aligns the two networks’ transmissions. However, the TDD mode of LTE-Advanced may simplify the process through the use of ‘over the air’ synchronisation, thereby making synchronisation more affordable to implement. However, the adoption of this into the standard is yet to be confirmed.

The success of unpaired spectrum depends on the availability of devices that can use it. Traditionally, devices are designed to operate in up to four bands, although more-recent developments suggest that support for at least six bands may be required for LTE. For reasons of backwards compatibility and international roaming, three of these are likely to be taken up by the low-frequency coverage bands of GSM, HSPA and LTE networks used in different world regions. In addition, operators will employ a number of FDD capacity bands, such as the 1800MHz, 2.1GHz and 2.6GHz bands. Therefore the fourth slot (and possibly the fifth and sixth) will be contested by a number of options. There are two solutions to this problem: either manufacturers will find a way to cost-effectively combine more bands in a single device, or they may customise devices for individual operators by allowing them to choose the bands to be supported. The second option would result in significantly higher prices because of the reduced economies of scale possible for customised devices.

This may leave operators with the option of focusing their TDD services on USB modem users, as the bands supported by a USB modem can be customised at little additional cost. However, this would not allow operators to fully exploit newly acquired unpaired spectrum because the volume of USB modem traffic is insufficient to fill the additional capacity – at least so far. Manufacturers will also require a number of years to adapt to demand for devices with more bands or customised bands. Therefore, the capacity potential of unpaired spectrum has yet to be unlocked.

Source: Analysys Mason – http://afridigital.blogspot.nl/2012/08/unpaired-spectrum-and-promise-of.html#!/2012/08/unpaired-spectrum-and-promise-of.html

AT&T Expects to Close its GSM Network by 2017

­USA based AT&T has announced that it expects to close its GSM networks by 2017 at the latest.

In a filing with the SEC, the company said that at the end of June 2012, just 12 percent of their postpaid customers were using 2G handsets. The company didn’t break down the figures for its prepay customers, although its prepay base is only around 11% of its total customer base anyway.

AT&T says that it is facing significant spectrum and capacity constraints on its wireless network in certain markets. They also expect such constraints to increase and expand to additional markets in the coming years. As such, they plan to move forward redeploying radio spectrum currently used for basic 2G services to support its 3G and LTE networks.

Throughout this multi-year upgrade process, the company said that it will work proactively with customers to manage the process of moving to 3G and 4G devices, which will help minimize customer churn.

They do not expect this transition to have a material impact on operating results, but will continue to evaluate the financial impact of transitioning customers from 2G devices to 3G or 4G devices.

Source: http://www.cellular-news.com/story/55707.php – Published on: <:TIME datetime=”2012-08-05T17:27Z”>5th Aug 2012

SMS Boom Days Are Over

SMS, perhaps one of the most profitable legal products ever, looks to be going the way of traditional voice, international direct dial (IDD) and other great telecom earners.

For most of the past decade the service has delivered margins of 90 percent or more for mobile operators.

Now, inevitably, it is just one more telecom service that’s being disrupted.

According to research firm Ovum Ltd. , worldwide SMS revenue grew 12 percent in 2010 and 7 percent in 2011, but predicts that growth rate will shrink to 4 percent this year and 3 percent in 2013.

Other statistics suggest the decline may be even sharper.

According to regulator Office of the Telecommunications Authority (OFTA) , the number of text messages sent in Hong Kong on Chinese New Year’s Day, usually the busiest day of the year, fell by 16 percent year-on-year to 24.5 million, the first ever decline. On Chinese New Year’s Day in 2011 the year-on-year volume increased by 3 percent and in 2010 it grew 17 percent.

Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY), the biggest Singapore operator, gave up on what used to be a revenue windfall over that holiday period and actually offered free texts.

But it’s not only Asia/Pacific that’s noticing the shift. Europeans sent fewer traditional text messages during the Christmas 2011 holidays. Finnish SMS traffic dropped 22 percent, according to statistics sourced from TeliaSonera AB (Nasdaq: TLSN) and cited by Citigroup in a report that suggests prepaid operators in Spain and Italy are especially at risk from a dip in text-related revenues during the next 12 months.

All of these trends are worrying for operators that are already having to plan for the inevitable further decline in traditional voice revenues. Text messaging is a GSM network feature that was initially overlooked by operators but has become the industry’s biggest non-voice revenue stream during the past decade.

It still accounts for the biggest share of data revenue, but that too is changing fast. The difference, of course, is mobile broadband, which is enabling alternative methods of near real-time communication via Facebook, Twitter and the use of downloadable messaging apps such as WhatsApp.

Smartphones are also eating away at SMS. Research In Motion Ltd. (RIM) (Nasdaq: RIMM; Toronto: RIM)’s free BlackBerry Messenger app has been one of its main attractions for teenagers, while Apple Inc. (Nasdaq: AAPL)’s recent launch of iMessaging may well accentuate the trend.

Clinging on to SMS
Operators contacted by Light Reading were wary about sharing either specific data or their views on the fate of the messaging market.

SingTel, a major shareholder in India’s biggest mobile operator Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and a brace of other operators in south-east Asia, said SMS usage across its business was “steady.” A spokesperson acknowledged that consumers now have more messaging options, but said SMS remains popular because it is “more reliable and faster” than alternatives.

Australia’s Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) said it didn’t expect the popularity of operator texting to change “in the near future.”

The fact is, almost every operator is now offering very large packages or bundles of all-you-can-eat SMS. And at the same time mobile operators need to deal with a more complex messaging environment, involving social features and multimedia.

New opportunities
One emerging opportunity, according to Ovum, is the combination of SMS and new applications. Apps such as group messaging have created a service with an IP-based interface but which “still depend on the reliable channel of SMS.”

And there’s a sweet spot for the future of SMS to be exploited, too — application-to-person (A2P). This includes information-based content such as news and sports results, along with advertising and vertical content. It currently accounts for around 16 percent of SMS traffic and is set to grow to more than 20 percent in the next two years, Ovum predicts.

But in the long term, the decline of SMS is part of the trend towards communications services becoming free bundled apps. Industry analyst Paul Budde says voice and (increasingly) SMS are being used to attract people to certain apps, “and it is within these apps that future revenues will be generated — the comms will be given free of charge as an incentive.”

Source: http://www.lightreading.com/document.asp?doc_id=217906 – Robert Clark, February 24, 2012