IS THE BACKHAUL REALLY THE BOTTLENECK FOR LTE?

aviat networks IS THE BACKHAUL REALLY THE BOTTLENECK FOR LTE?

BOOMING DEMAND DRIVES BOTTLENECK CONCERNS IS THERE A SPECTRUM SHORTAGE FOR LTE ACCESS? The popularity of smart phones and tablets, motivated by the launch of the iphone TM (2007) and the ipad TM (2010) have created a dramatic increase in mobile data consumption [1]. The need to provide higher throughputs at the base station level to serve this demand has concerned operators, equipment vendors and industry watchers about a possible bottleneck in the backhaul network. The basis for this concern is that microwave technology will not be able to provide sufficient capacity, and that only fiber is able to meet the capacity needs of 4G/LTE networks. This apprehension is being capitalized on by some optical network providers who argue that fiber connections are needed to provide gigabit levels at each base station. Although a gigabit connection in each base station is desirable, extremely high costs, slow deployment and inflexibility of fiber optic networks prevent this from being a viable option for operators who are CAPEX and OPEX constrained. Although LTE network operators are demanding more spectrum allocations (especially in North America), there are some industry commentators that argue that the claimed spectrum shortage is largely exaggerated [7]. These commentators argue that techniques are available to mitigate any potential shortage, such as the employment of smarter antennas, the offload of mobile traffic to Wi-Fi, the use of small cells, and the deployment of new technologies such as agile radios, all of which can potentially prevent any crisis [8]. However, although these measures could provide relief to enable operators to keep up with increasing traffic demand, operators will need economic incentives and time to study the feasibility of these potential solutions for eventual implementation. The mix of economic and technical aspects faced by operators and regulators makes access to LTE spectrum an issue more complex than the congestion on the backhaul spectrum side for urban environments. Aviat Networks studies, based upon our early involvement in some of the largest LTE network deployments, show that an average of 100 to 200 Mbps of backhaul capacity per LTE cell site is more than adequate [2], which is easily achievable with current microwave technologies. At the short and medium term the spectrum situation is more consistent at LTE base station side, where the shortage of available spectrum, and the implementation of more spectrum efficient solutions will take considerable investment in time and capital [6]. This situation is driving North American operators to threaten price increases and service caps if more allocations are not provided by the FCC [3] [4]. In Europe, where operators have been slower to deploy LTE, and are in many cases in early trials, operators must confront a fragmented frequency band arrangement as well as the lack of availability of sufficient spectrum, to make their business models work [5]. AVIAT NETWORKS 3

LTE SPECTRUM IN THE NORTH AMERICA In the USA, the FCC plans to increase available spectrum for operators by 300 MHz by 2015, with an additional auction of 200 MHz by 2020. This plan will double the spectrum from the amount available to operators in 2010 [9]. During the course of the next year the FCC is expected to make a series of decisions that will determine which companies will get access to the available spectrum. Some of these decisions include approval for license use, swaps, and re-writing of auction rules [10]. Figure 1 shows the percentage of spectrum holdings based on data from the FCC [11]. The most desired LTE frequencies are in the 700 MHz band due to the favorable propagation conditions at lower frequencies that enable larger (ie: fewer) cells and better in-building coverage. of 12 MHz in the 700MHz band [13], perhaps in an attempt to ease concerns from competitors and the FCC that it is trying to dominate the spectrum landscape in the US. Another very important decision by the FCC was to delay granting Dish Network a waiver to use its spectrum reserved for satellite communications to implement a terrestrial 4G network [10]. The decision came shortly after a refusal from the FCC to allow LightSquared to build its own 4G Network by using a similar waiver, based on widespread concerns of interference with the band that is also used by GPS satellites and devices. The Dish decision is important because it could strengthen Sprint, T-Mobile or AT&T if a partnership with Dish is reached [10]. Figure 1. Percentage of Spectrum Holdings (all technologies), September, 2010 In the meantime, there is significant activity in the market by operators who are jockeying and looking to do deals to acquire more spectrum from other smaller and/ or regional operators. For example, Verizon is seeking FCC approval for deals it reached with Spectrum Co for $3.6 Billion to purchase unused spectrum, and with Cox Communications worth $315 million. However, the FCC is taking a cautious approach to prevent the larger players monopolizing spectrum, leading it to reject a bid from AT&T to buy T-Mobile-USA. The FCC did approve a smaller deal for AT&T to purchase spectrum from Qualcomm [12]. Verizon has also announced that it will sell off two blocks Other operators in the US market have also not been idle, with T-Mobile entering an agreement with Leap Wireless to exchange wireless spectrum in various markets subject to approval by the FCC [12]. Sprint has plans to release spectrum from its iden customers and move them to CDMA in order to liberate spectrum in the 800 MHz for use in LTE [14]. In contrast to the activity in the US, in Canada mobile operators like TELUS, Bell and Rogers are using their 1.7-2.1 GHz AWS frequency bands (Canada has the same spectrum distribution as the US), but plan to participate in auctions next year to move to 700 MHz [15]. 4 AVIAT NETWORKS

LTE SPECTRUM IN EUROPE In Europe, 4G LTE rollouts are not progressing at the same rate as in North America, and in many cases auctions of spectrum licenses are still either planned or are in progress. These spectrum auctions are concentrating on both FDD (frequency division duplex) and TDD (time division duplex) channel arrangements for 800 MHz, 900 MHz, 1800 MHz and 2600 MHz frequency bands. The 800 MHz spectrum, which was originally allocated for analog TV broadcast, is now being re-farmed as part of the European Union Digital dividend [16]. Auctions have been completed in Germany, France, Spain, Portugal, Italy and Sweden. One pan-european operator, Orange/France Telecom, has made a commitment to deploy LTE networks in 10 European countries by 2015 and in the UK by the end of 2012 [17]. However, a major concern of European operators is spectrum fragmentation, as the lack of harmonized spectrum plans can force equipment vendors (in particular device manufacturers) to support many disparate frequencies making devices more expensive and hampering the ability to be globally compatible to support international roaming. To demonstrate the extent of the problem, a survey completed last year found that by 2015 there will be more than 200 networks with 38 different frequency combinations, worldwide [18]. The ITU (International Telecommunications Union) is attempting to find a solution by indentifying the 700 MHz as a potential global frequency band for LTE. In a meeting of ITU s World Radio Conference (WRC-12) held in February 2012 (this meeting takes place every 3 to 4 years), a resolution was passed that proposed the establishment of 700 MHz in ITU Region-1 (Europe, Africa and Middle East), but many countries in this region utilize this band for Digital Terrestrial Television (DTT). Although decisions of the ITU are influential, they are not binding, with the final decisions are made by local regulatory entities in each country. Assuming that these and other technical challenges can be overcome, a final decision for ITU Region-1 is expected in 2015. ITU-Region 2 (North and South America) and ITU- Region 3 (Asia Pacific) already have the go-ahead and are in early stages of pre-planning [19]. Figure 2. Spectrum Fragmentation of LTE Frequency Bands in Europe AVIAT NETWORKS 5

CONCLUSIONS The current LTE spectrum landscape in North America is of fierce competition between operators that strive to control the scarce available spectrum, and are concerned of not having enough to support the growing demand. In Europe, and the rest of the world, spectrum fragmentation could restrain the enthusiasm of some network operators to deploy LTE until the issues are resolved. Attempts like the US National Broadband Plan and the utilization of 700MHz as a universal LTE band, could provide more spectrum for LTE operators. But even if these initiatives are successful it is unlikely that operators will find enough LTE spectrum to support the maximum theoretical download speeds that the technology promises. While operators grapple with these spectrum issues, there is no doubt that there is still the need to upgrade the capacity and flexibility of their existing backhaul networks. In contrast, microwave and new millimeter wave frequency bands support numerous options to provide backhaul bandwidth (Figure 2) [20], [21], as well as new improvements such as multi-channel link aggregation, header compression, co-channel dual polarization, (CCDP), and adaptive coding and modulation (ACM) [22]. These advances, added cost effectiveness, flexibility and speed of development, make microwave transmission systems an ideal backhaul solution for new LTE networks for many years to come. Figure 3. FREQUENCY ASSIGNMENT CELLULAR 3GPP (LTE) AND MICROWAVE Source: ITU-R F.746 and 3Gpp TS.36.101 6 AVIAT NETWORKS

REFERENCES [1] U.S. cell phones, tablets outnumber Americans. By David Goldman @ CNNMoneyTech, October 12 2011. HTTP://MONEY.CNN.COM/2011/10/12/ TECHNOLOGY/CELLPHONES_OUTNUMBER_AMERICANS/INDEX. HTM?IID=EL [2] LTE Lessons Learned So Far. By Errol Binda, Aviat Networks, February 14, 2012. HTTP://BLOG.AVIATNETWORKS.COM/2012/02/14/ LTE-LESSONS-LEARNED-SO-FAR/ [3] AT&T Mulls Price Increase as Spectrum Crunch Looms. By Margaret Rock. Fri Jan 06, 2012. HTTP://WWW.MOBILEDIA.COM/NEWS/122953. HTML [4] As spectrum for mobile-phone use nears capacity, companies aim to fend off shortages. By Andy Vuong. The Denver Post. April, 15 2012. HTTP://WWW.DENVERPOST.COM/RECOMMENDED/ CI_20394172#IXZZ1SVEXBT9U [5] Regulators face tough choices on LTE spectrum. By Caroline Gabriel, Wireless Watch. March 26, 2012. HTTP://WWW.TELECOMSEUROPE. NET/CONTENT/REGULATORS-FACE-TOUGH-CHOICES-LTE-SPECTRUM [6] Determining if there really is a spectrum shortage. By Rich Tehrani. HTTP://WWW.TELECOMSTECHNEWS.COM/BLOG-HUB/2012/APR/20/ DETERMINING-IF-THERE-IS-A-SPECTRUM-SHORTAGE/ [7] Carriers Warn of Crisis in Mobile Spectrum. By Brian X. Chen, New York Times. April 17, 2012 HTTP://WWW.NYTIMES.COM/2012/04/18/ TECHNOLOGY/MOBILE-CARRIERS-WARN-OF-SPECTRUM-CRISIS- OTHERS-SEE-HYPERBOLE.HTML?_R=4&PAGEWANTED=1 [8] The Spectrum Shortage That Isn t. By Steve Wildstrom. May 9, 2012. HTTP://TECHPINIONS.COM/THE-SPECTRUM-SHORTAGE-THAT- ISNT/6816 [9] Connecting America: The National Broadband Plan. HTTP://WWW. BROADBAND.GOV/PLAN/ [10] Upcoming FCC decisions to shape spectrum policy. By Marguerite Reardon, March 19, 2012, HTTP://NEWS.CNET.COM/8301-30686_3-57400261-266/UPCOMING-FCC-DECISIONS-TO-SHAPE-SPECTRUM- POLICY/?TAG=MNCOL;TXT [11] FCC Wireless Competitive Report, June 2011. HTTP://HRAUNFOSS. FCC.GOV/EDOCS_PUBLIC/ATTACHMATCH/FCC-11-103A1.PDF [12] T-Mobile Statement: Leap Spectrum Exchange. Bellevue, Washington, April 9, 2012. HTTP://NEWSROOM.T-MOBILE.COM/ARTICLES/LEAP- SPECTRUM-EXCHANGE [13] Verizon Plans to Sell off Some Mobile Spectrum. By Grant Gross, IDG News, April 18, 2012. HTTP://WWW.PCWORLD.COM/BUSINESSCENTER/ ARTICLE/254033/VERIZON_PLANS_TO_SELL_OFF_SOME_MOBILE_ SPECTRUM.HTML [14] Sprint planning to deploy LTE on 800MHz spectrum by 2014. By Alex Wagner. April 13, 2012. HTTP://WWW.PHONEDOG.COM/2012/4/13/ SPRINT-PLANNING-TO-DEPLOY-LTE-ON-800MHZ-SPECTRUM-BY-2014/ [15] Canada gets two new LTE networks thanks to Rogers. By Kevin Fitchard. Apr. 2, 2012. HTTP://GIGAOM.COM/BROADBAND/CANADA- GETS-TWO-NEW-LTE-NETWORKS-THANKS-TO-ROGERS/ [16] LTE Spectrum and Network Strategies. By Arthur D Little, March 2012. HTTP://WWW.ADLITTLE.COM/VIEWPOINTS.HTML?&NO_ CACHE=1&VIEW=534 [17] Orange pledges LTE across Europe by 2015. By Benny Har-Even. March 22, 2012. HTTP://WWW.TELECOMS.COM/41580/ORANGE- PLEDGES-LTE-ACROSS-EUROPE-BY-2015/ [18] Forecasts Indicate That By 2015, There Will Be More Than 200 Live LTE Networks Using 38 Spectrum Frequency Combinations. PRNewswire. Dec. 16, 2011. HTTP://WWW.PRNEWSWIRE.COM/ NEWS-RELEASES/GSMA-WIRELESS-INTELLIGENCE-REPORTS- THAT-GLOBAL-ROLLOUT-OF-LTE-WILL-ACCELERATE-TO-2015-BUT- SPECTRUM-FRAGMENTATION-MUST-BE-ADDRESSED-135719748.HTML [19] World telecoms: Banding together. By THE ECONOMIST INTELLIGENCE UNIT. April 16 2012. HTTP://VIEWSWIRE.EIU.COM/ INDEX.ASP?LAYOUT=IB3ARTICLE&ARTICLE_ID=1448961729&FS=TRUE [20] ITU-R F.746 : Radio-frequency arrangements for fixed service systems. HTTP://WWW.ITU.INT/REC/R-REC-F.746-9-200709-I/EN [21] E-UTRA; User Equipment (UE) radio transmission and reception 36PP TS 36.101. HTTP://WWW.36PP.ORG/FTP/SPECS/HTML-INFO/36101.HTM [22] Microwave Capacity: Examining Techniques to Improve Throughput, By Gary Croke, Aviat Networks, November 7, 2011. HTTP://BLOG. AVIATNETWORKS.COM/2011/11/07/MICROWAVE-CAPACITY-EXAMINING- TECHNIQUES-TO-IMPROVE-THROUGHPUT/ AVIAT NETWORKS 7

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