Mobile broadband for all

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1 ericsson White paper Uen Rev B March 2015 Mobile broadband for all optimizing radio technologies As operators roll out LTE 4G networks, WCDMA/HSPA 3G technology is rapidly shifting from the front of the mobile broadband evolution into a mobile broadband vehicle for all. At the same time, GSM continues to be an attractive proposition for entry-level mobile subscribers and machine-to-machine applications, while offering the world s broadest coverage. As subscriber numbers and traffic levels continue to rise, operators need to take a holistic view of their spectrum resources and balance investment across all technology generations. This way, they can make best use of resources to maximize user experience and revenue across 4G, 3G and 2G networks.

2 Growth across the board While new LTE rollouts hit the headlines, WCDMA/HSPA continues to enjoy huge subscriber growth and is expected to continue this expansion for many years to come. At the end of 2014, WCDMA/HSPA subscriptions were growing at 60 percent year-on-year, and the technology is expected to cover 90 percent of the world s population by 2020, when it will serve some 4.5 billion subscribers [1], as shown in Figure 1. At the same time, many subscribers and machine-to-machine (M2M) applications still rely on GSM connectivity, thanks to its wide availability and the low cost of handsets and chipsets. Figure 1: Global mobile subscriptions by technology. The big question for operators is how to satisfy demand for GSM and WCDMA/HSPA efficiently, maintain a high-quality user experience and maximize their revenue potential as they roll out LTE 4G networks. Given WCDMA/HSPA s key role in delivering mobile broadband to the mass market, operators will need to find ways of building and enhancing their 3G coverage and capacity. Therefore, 3G will offer an excellent mobile broadband experience both in its own right, and as a complement and supporting technology to LTE 4G. This is especially important as a growing number of subscribers become accustomed to mobile broadband and will be more inclined to switch service providers if they are not getting the performance they expect. A WCDMA/HSPA network that can handle smartphone users demands well outside LTE coverage may also enable operators to sustain a premium LTE consumer experience. While GSM is currently the dominant everywhere standard for seamless mobility coverage, WCDMA/HSPA is increasingly adopting this role, especially for voice. A recently published report found that the top reason for continuing to invest in 3G networks (cited by 73 percent of operators) was to support growing voice traffic. Another key driver was 3G providing an important complement to LTE (cited by 47 percent of respondents), while 40 percent cited the more cost-effective 3G device supply as a reason for continued investment in 3G networks [2]. Operators need to balance their investments across all technologies to make the most efficient use of available radio spectrum, while delivering more consistent network performance and high-quality user experience everywhere leading to improved revenue. Mobile broadband for all Growth across the board 2

3 Subscribers drive technology choice WCDMA is the predominant mobile broadband technology in use today. A major factor in WCDMA s success is the diverse ecosystem of affordable, high-capability WCDMA/HSPA smartphones that support all current applications an application suite that is still growing. One reason for this success is the falling average selling price of WCDMA/HSPA smartphones, which has dropped dramatically over the past few years and is expected to continue to drop to below USD 50. This enables large populations to access many more applications, like social networking and financial services. GSM continues to thrive as an affordable technology for entry-level phones and M2M applications. It s all about affordability As economies of scale develop, device prices for LTE-HSPA smartphones are also falling, but the prices are coming down from higher levels, and it will be some time before prices reach a level that is appropriate for the mass market. There will be a large number of WCDMA/ HSPA-only capable smartphones that will rely on the mobile broadband performance of the WCDMA/HSPA network. WCDMA/HSPA subscriptions are growing, and the market for WCDMA/HSPA smartphones is picking up pace, especially in the entry- (USD 36-99) and mid-level (USD ) price bands, as shown in Figure 2. The market for LTE smartphones is taking off in the high-end (USD ) and premium (USD 300-plus) segments, and is beginning to experience growth in the mid-level price band. Put simply, handset affordability is a key factor for most subscribers. This is why massmarket mobile broadband is being driven by WCDMA/HSPA-capable smartphones in many parts of the world, and will continue to be for some years to come. Figure 2: Smartphone technology choice is driven by price. Mobile broadband for all Subscribers drive technology choice 3

4 Good app coverage, everywhere Although LTE coverage is growing quickly in urban, suburban and rural areas in many countries, there are still several places where WCDMA/HSPA will determine consumers smartphone experience over the next three to five years and beyond, as the coverage comparison in Figure 3 shows [3]. LTE also drives ever higher consumer data usage, which, in turn, spills over to WCDMA/HSPA networks, driving an increase in 3G traffic where LTE has been rolled out. Subscribers will be looking to get the best mobile broadband performance they can, everywhere they go, whichever technology they are connected to. Figure 3: World population coverage by technology. Traffic flows from LTE to WCDMA/HSPA Even when subscribers are making use of LTE coverage, they are frequently moved from LTE to WCDMA/HSPA during periods of high LTE loading or during voice calls, as illustrated in Figure 4. In effect, many LTE subscribers will have their mobile broadband experience delivered by WCDMA/HSPA networks that need to handle higher loads than before, often with fewer carriers as a result of refarming to LTE. Figure 4: Traffic flows from LTE to WCDMA/HSPA. In LTE networks that provide relatively complete coverage, there are still a number of coverage-related reasons for LTE devices to be shifted to WCDMA/HSPA. Generally, the LTE Mobile broadband for all Subscribers drive technology choice 4

5 FDD variant provides greater coverage than the TDD variant. Devices in an FDD system transmit continuously, which enables them to achieve cell edge rates further from the base station. Devices in a TDD system transmit periodically (half or one-third of the time compared with FDD), which means they cannot achieve comparable cell edge rates as for FDD at similar distances (there is an estimated 5dB advantage for FDD in today s LTE networks). Where operators want to offer premium services over LTE, it may be necessary to offload users to WCDMA/HSPA, where a substantial proportion of subscribers can be served perfectly well. Voice connections will also contribute to a large flow of LTE-capable devices to WCDMA/ HSPA, as relatively few of today s LTE handsets support voice natively. The result is that operators must invest in their GSM and WCDMA/HSPA networks to ensure they deliver the best possible app coverage for the largest number of people. Not investing in GSM and WCDMA/HSPA will threaten subscriber retention and increase churn if app coverage quality does not meet subscriber expectations as the mobile broadband market continues to grow, LTE coverage expands and 5G arrives on the scene. Mobile broadband for all Subscribers drive technology choice 5

6 Shaping up across the generations Even in markets where LTE 4G networks have been rolled out, users still need to move between 3G and 4G coverage, not just for voice but also for data. Many markets will have 4G coverage islands for the foreseeable future. It is important that mobile broadband users experience does not fall dramatically as they move from 4G to 3G. There will also be many mobile broadband subscribers who do not own 4G-capable devices for years to come. To protect and enhance their reputation and revenue streams, operators need to ensure their 3G networks are delivering the best possible performance in the most efficient way. The improvements can be dramatic: field measurements have shown a fivefold difference in capacity between the worst-performing and best-performing WCDMA/HSPA networks. New radio features and improved network optimization capabilities mean it is now relatively straightforward to configure a modern WCDMA/HSPA network to deliver a smartphone experience not far off that provided by a state-of-the-art LTE network. As well as ensuring good WCDMA/HSPA performance through implementing the right features and configurations, operators can also optimize WCDMA/HSPA usage by considering smartphone functionality and applications, capacity, coverage, feature evolution, spectrum refarming and transport strategies in a multiband, multilayer and multi-access technology context. Making 2G as efficient as possible GSM networks still serve more than 4 billion (GSM-only) subscriptions while offering 95 percent global population coverage and by far the lowest-cost handsets on the market. They handle at least 80 percent of voice traffic in developing markets, as well as dominating the M2M market. This means the vast majority of operators need a way to look after their GSM 2G networks as they roll out and expand mobile broadband coverage and capacity in 3G and 4G over the coming years. For most operators, a one-off investment in multi-standard radio technology, with the latest automated configuration and optimization features, provides an attractive way forward. By deploying multi-standard radios, baseband units, transmission and controllers, operators can spread their capital and operating costs across all generations of radio technology and shift traffic handling capacity to the technology that needs it. Hardware efficiency and energy efficiency are both enhanced. The latest self-organizing networks technology, with features like Automatic Neighbor Relations, helps operators automate their 2G networks and keep them running at peak performance with minimal manual intervention. This will be a key issue as GSM radio expertise becomes a rarer commodity. With an efficient, high-performance and future-ready GSM network, operators will be in a better position to refarm much of their 2G spectrum to 3G to meet the growing demand for mobile broadband. This thin layer GSM network offers a very efficient way of handling 2G voice and M2M traffic until such time as 3G and 4G networks are ready to take the load. In many markets, 3G is already starting to become the radio technology of choice for delivering seamless coverage (especially for voice), and this trend is likely to continue for some years to come. Mobile broadband for all Shaping up across the generations 6

7 Maximizing 3G performance Live network experience shows that simply getting the existing WCDMA/HSPA 3G network into shape, through tuning, optimization and introduction of the latest features, can boost traffic capacity by as much as 100 percent (using the same spectrum). Evidence from existing operators also demonstrates that when subscribers have access to faster, more responsive networks, their data usage increases providing a recurring revenue boost. Typically, the changes that many operators need to make to their 3G networks include adjusting parameter settings, activating existing features in the right way, and introducing some newer features. For example, they can prioritize voice while allowing users to stay connected to 3G (and not fall back to 2G). They can introduce powerful HSPA enhanced uplink functionality to improve mobile broadband performance, make radio parameters consistent across all sites, and activate important smartphone features like Enhanced Uplink Forward Access Channel, High Speed Forward Access Channel and Continuous Packet Connectivity as described in a recent joint Qualcomm Ericsson white paper [4]. By introducing newer WCDMA/HSPA capabilities, such as multi-carrier technology, operators can substantially increase the throughput offered by 3G networks. For example, three-carrier High Speed Downlink Packet Access (HSDPA) boosts downlink speed to 63Mbit/s, while dual-carrier High Speed Uplink Packet Access boosts uplink speed to 11Mbit/s. Making best use of spectrum Spectrum is a key asset for operators, so it makes sense to use all available spectrum to maximize mobile broadband performance for all users. Operators who are able to refarm a portion of their low-band 2G 900MHz spectrum to 3G can use these frequencies to greatly improve cell edge and indoor performance compared with 2100MHz-only coverage. When WCDMA/HSPA has been rolled out in low band spectrum everywhere, operators could choose to switch off Inter Radio Access Technology handover to GSM: WCDMA/HSPA offers a much better smartphone experience than GSM. To further improve mobile broadband experience, multi-carrier HSDPA should be implemented everywhere. This will provide a doubling of user speeds throughout the whole cell and up to 30 percent capacity increase due to improved spectrum utilization (compared with single-carrier mode). Over time, operators could choose to refarm increasing amounts of spectrum to LTE 4G, while maintaining seamless WCDMA/HSPA 3G coverage in certain bands (900MHz or 2100MHz, or both). Mobile broadband for all Shaping up across the generations 7

8 As they increase the spectrum allocated to LTE, operators would be well advised to keep at least 20MHz of spectrum for WCDMA/HSPA (low and high bands), with at least 5MHz (preferably 10MHz) allocated in a low-band frequency, to secure the best mobile broadband experience. The target split of spectrum between 2G, 3G and 4G might look like that shown for a European operator in Figure 5 (it is a similar picture for operators in other parts of the world, but with differences in actual frequency bands). Figure 5: Target spectrum allocation in a multiband, multi-standard and multilayer context for a typical European operator. Multiband, multi-standard, multilayer Many operators already have three technologies (GSM, WCDMA/HSPA and LTE) in commercial service, and the future is all about adding more bands for capacity and the growing demand for mobile broadband. Most operators will have at least five bands deployed in the near future. To get the maximum performance from each band, most or all of the bands will be multilayered (combining macro and small cells in a heterogeneous network). This will make features like coordination between the bands, layers and standards vitally important, with a strong need for carrier aggregation and heterogeneous management features. By introducing performance-enhancing features in their 2G and 3G networks, and ensuring that existing 3G devices are directed away from 2G and onto 3G networks as much as possible, operators not only enhance user experience and revenue, they also make the most efficient use of their spectrum and infrastructure investments. Mobile broadband for all Shaping up across the generations 8

9 Conclusion LTE adds new value for mobile operators in terms of its superior network capacity and higher throughput needed for high-performance mobile broadband services (especially video). However, WCDMA/HSPA is a mature, but still developing, technology that offers cost-efficiencies, established voice support, mass-market appeal and coverage advantages that means it will offer an efficient delivery vehicle for excellent smartphone experience for years to come. To maintain and grow market mobile broadband share, operators need to carefully balance their investments across GSM, WCDMA/HSPA and LTE over the next three to five years. This way, they can continue to provide GSM coverage as efficiently as possible, and ensure WCDMA/ HSPA offers the best possible mobile broadband experience not only as a high-quality complement to LTE, but also as a way of delivering mobile broadband coverage to very large populations for the first time. With a suitable investment, WCDMA/HSPA will complement and support LTE (and not just be a fallback), and will enable operators to maximize revenue by delivering good network performance and a seamless experience across their 3G and 4G networks. Mobile broadband for all conclusion 9

10 References [1] Ericsson, November 2014, Ericsson Mobility Report, available at: ericsson-mobility-report-november-2014.pdf [2] Current Analysis, February 2015, 3G Wireless Investment Motivations Why do mobile operators continue to invest in 3G wireless infrastructure?, available at: [3] Ericsson, November 2014, Ericsson Mobility Report, op. cit. [4] Ericsson & Qualcomm, February 2015, White Paper: 3G smartphones optimizing user experience and network efficiency, available at: GLOSSARY CS HSDPA M2M TD-SCDMA circuit-switched High Speed Downlink Packet Access machine-to-machine time division synchronous code division multiple access 2015 Ericsson AB All rights reserved Mobile broadband for all references & GLOSSARy 10

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