LTE: Telco’s Long Term Evolution
Although some hurdles exist, it is good for cable in the short term.
In the maddeningly acronym-laced world of telecom, LTE stands for Long Term Evolution. This is shorthand for the 3GPP (Third Generation Partnership Project) Release 8 effort to replace current third-generation mobile technology with IP-fueled voice/data networks that are faster than anything now available over the air and, in many cases, even through wires.
For the cable industry, LTE equates to WWHaLT – or Wow, We Have a Little Time – because by even the most optimistic predictions, LTE won’t be out in the market for another few years. Before then, it’s entirely possible that cable will get its act together as part of the Sprint Nextel-backed new Clearwire WiMAX venture and have its own fourth-generation IP-mobile technology in the market. Even more remotely, the cable industry could do its own version of LTE with that 1.9 GHz spectrum it’s hoarding.
Both of these possibilities are iffy, considering the past history of cable wireless ventures and the fact that WiMAX, unlike LTE, must be developed and deployed from scratch market by market.
“Who knows how long the WiMAX thing lasts,” said Peter Jarich, research director for Current Analysis. “It’s not like they’re going to be owning that network; they have rights to it.”
Figure 1: MME and UPE have been split into two entities at the last SA.
OWNING THE NETWORK
Wireless operators, of course, will own anything that evolves off of their current technology, and all of them, excepting of course Sprint Nextel, back LTE.
That includes at least one MSO. Cox Communications, which bought 700 MHz spectrum last year, plans to build its own 3G wireless network and migrate to 4G LTE. Bresnan Communications also purchased 700 MHz licenses and may well do likewise.
“We have a very smooth path to get us to 4G,” said Mark Siegel, a spokesman for AT&T Mobility. “One of the better extraordinary virtues for us is that it’s backward-compatible with our current technology so that even if a customer is not on an LTE-type network, when the future comes they can still go back to the previous generations of technology that support it. We think it is absolutely the right way to go.”
Sprint and Clearwire, of course, differ. They’ve placed their bets on WiMAX and their recently re-branded Clear network. Sprint launched Clear (originally called Xohm) in Baltimore in September and is expected to spread nationwide in coming months, both as a standalone business and as part of the new Clearwire joint venture that includes Comcast, Time Warner Cable, Bright House, Google and Intel as major investors.
“WiMAX is not slideware; it’s here now,” said Sprint CEO and advertising icon Dan Hesse, while conceding, “It will take a while to get this new network built ubiquitously.”
Not as long as it’s going to take LTE, said Barry West, former president of Sprint’s WiMAX network business unit and now president of Clearwire.
“There is nothing available to them for at least two years,” West said. “Not only that, they then have to justify that investment in the face of all the other investments they put in place. We are the only company with all the assets available and a technology that works today.”
If one thing is certain in an age of technological uncertainty, it’s that the telecom industry will inexorably move to its next level. It may happen more slowly if there’s no competition, or, as is probably the case with LTE, more quickly because someone’s already jumped into the space. But it will happen.
Figure 2: LTE vs. WiMAX. Winner may not be who's fastest,
but who covers the market first.
AN EVOLUTIONARY PROCESS
“You have to look at an evolutionary process that covers not just LTE, but LTE Advanced, as well,” said Adrian Scrase, head of the 3GPP Mobile Competence Center. “Right now we have [advanced third-generation High-Speed Downlink Packet Access] actively deployed in the marketplace, roughly 14 Mbps [downstream] on the more advanced commercial networks, 7 Mbps on those networks which are less mature. The next step is LTE.”
That next step will untether the Internet the way mobile untethered telephones.
“A lot of people either laugh, cough or sputter when you talk about hundreds of megabits per second,” Scrase said. “Ten years ago the advanced networks were doing 300 kbps. In 10 years we’ve gone from 300 kbps to 14 Mbps. If you extrapolate that to where we’re going to be in the next 10 years, these figures of over 100 Mbps are entirely realistic. While they sound a little far-fetched at the moment, time will prove they are not science fiction, they are reality.”
They are the kind of game-changing numbers that could make consumers reconsider whether they need wireline cable or telco service.
“It’s definitely a competitive threat from that perspective,” said Todd Mersch, senior product line manager for Continuous Computing. “You have a huge installed [mobile] customer base, so economies of scale can drive better value for the mobile operators, and you have performance specifications for upwards of 100 Mbps on the downlink.”
That sounds scary, but it also sounds like an opportunity, however slight, for the cable industry.
“The general gist is to participate how you can, while you can. WiMAX is ready now and LTE has some time,” said Jim Orr, principal network architect at Fujitsu Networks, an “arms dealer” for both WiMAX and LTE users.
For sure, WiMAX is a good idea – now – but LTE is, as its name suggests, the probable long-term winner, Continuous Computing’s Mersch said.
“Cable still has to build a more expansive macro WiMAX network, whereas a mobile operator has 3G, already has a [High-Speed Packet Access] network, and can lean on that and rollout LTE in specific areas where it makes sense,” he said.
Figure 3: Forecast growth in service traffic
for a typical mobile user in a developed market.
In other words, cherrypick. Verizon, which has a wireless arm that’s pushing LTE, found that to be a great way of building a customer base with its fiber-to-the-home FiOS offering.
Cable could conceivably make peace with the enemy and provide its fiber infrastructure to backhaul the increasingly heavy loads of data on the wireless networks.
“It’s not a weird thought at all,” said Fujitsu’s Orr, whose company specializes in fiber backhaul. “It’s an absolute possibility; it’s probably a certainty. If there’s fiber out there and it’s anywhere close to a basestation, that would be something that would participate in the backhaul, even more so because the backhaul networks for LTE are all IP, and the cable companies’ networks are optimized for that.”
That, of course, would be conceding that LTE is the winner and cable has to pick up the crumbs, which has not been the modus operandi for the industry in the past. Still, cable’s experience selling video content to competitive satellite and telco providers suggests that the industry is not unwilling to play nice when it means making a little extra money.
Of course, that’s all in the future because, as Mark Lowenstein, managing director of Mobile Ecosystem pointed out, LTE shouldn’t have “any immediate effect on the cable industry.”
“Once it’s deployed in a reasonable coverage area … it could compete for the home broadband in some areas,” Lowenstein continued.
That’s because, in addition to the flexibility of being mobile, LTE will also bring beaucoup bandwidth, and, as a staunch cable ally said, bandwidth is everything.
“You can never get enough bandwidth,” said Clearwire’s West.
One hundred megabits of mobile bandwidth would seem to fill that premise, and LTE would seem to be the one to fill it.