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Broadband Library: Two Sides to Every Story: Spring 2010 (March)
Broadband Library is distributed quarterly to all members of the Society of Cable Telecommunications Engineers (SCTE). Our "Two Sides to Every Story" columns appear on facing pages to present contrasting viewpoints on a cable/telecom industry topic.
Our columns in the Spring 2010 issue looked at the 4G technology choices faced by cable providers. With mobile services playing a growing role in consumers lives and bundled services, cable providers have had to make the difficult choice between LTE and WiMAX.
Sandy noted that because LTE is the direction of incumbents, it will benefit most from economies of scale.
Dave argued that WiMAX has first-mover advantage since it is already being deployed around the world.
With mobile services playing a growing role in bundled offers, 4G mobile technologies are now arriving on the market. As cableís wireline competitors started positioning themselves to add LTE mobile broadband to their quad-play offers, cable operators faced a decision on which 4G technology to embrace for their own mobile broadband services: LTE or WiMAX. Two major North American MSOs (Cox and Rogers) have taken the LTE route, and there are good reasons for their having done so.
LTE is the mainstream direction of incumbent mobile providers around the globe. According to the GSMA (a trade association for mobile communications), over 50 mobile network operators in 24 countries — including AT&T and Verizon — have selected LTE. This will provide LTE with major economies of scale in infrastructure equipment and especially in handsets.
LTE has already started to roll out. TeliaSonera launched its LTE network in Stockholm and Oslo at the end of 2009.Verizon has set a goal of deploying LTE service in 25-30 markets in 2010, with AT&T following in 2011. In Canada, Bell Wireless and Telus Mobility are also committed to LTE.
It is important for carriers to have appealing handset models, since they are a strong determinant of a consumerís choice of service. AT&Tís iPhone has been the poster child for the power of handsets to sell mobile services. Since most experts predict that LTE will become the dominant 4G technology, mobile handset manufacturers aiming to capture the biggest market share are likely to design their leading-edge products for the LTE market. It is up to the service providers to negotiate good contracts with mobile manufacturers, but having the widest possible range of phones to choose from provides flexibility to offer what proves most popular with consumers.
But handsets are only part of the mobile device market. Mobile broadband will also be integrated into a wide range of consumer electronics devices. The Kindle book reader from Amazon is an early 3G demonstration of this direction, as are some netbooks. The expectation is that mobile broadband will increasingly be embedded in such devices as notebook and netbook PCs, ebook readers, music and video players, gaming consoles and digital cameras. When consumer electronics manufacturers consider which 4G mobile technology to embed, they will be driven to where the largest market is expected to be — and that is LTE.
Todayís mobile technology is primarily used in handsets for connecting people together for voice communications. If each person had a mobile phone, the penetration of wireless services would be 100%. Ivan Seidenberg, Verizonís CEO, thinks the potential penetration is much higher. As mobile technology is increasingly built into additional devices, mobile technology will enable people-to-machine and machine-to-machine communications; Seidenberg says a future consumer could own five different mobile-connected devices.
In the same way that Apple created the App Store for the iPhone, there will be App Stores for many of these non-handset devices. When application developers are faced with a choice of technology platforms, the expected dominance of LTE will drive most to focus their investments on LTE, relegating WiMAX to an afterthought.
Because LTE was developed after WiMAX, it adopted most of the same technological advances and built on them. Chip makers who have long served the vast global cellular market are now turning their attention to LTE. Chip makers who have had great success with WiMAX see LTE as a much larger potential market and are now bringing LTE chips to market. Thus LTE draws on both the traditional cellular and emerging WiMAX ecosystems.
Unlike WiMAX, which was originally designed for the fixed and nomadic markets, LTE was designed from the outset for excellent performance while moving. Key elements, such as handoffs between cell sites, have been designed with all the experience that comes from earlier generations of mobile technology.
By the same token, LTE is designed for interoperability with existing 3G and 2G networks. Most devices with LTE will be able to fall back to 3G and 2G in places where LTE is not yet available.
Mobile devices are often used across different geographies. With LTE expected to become the dominant global 4G technology, deploying LTE will let a service providerís customers roam most widely with their existing devices.
Although WiMAX may be further ahead in the short term, that temporary advantage will disappear and be reversed as LTE gains worldwide momentum.
While AT&T Mobility and Verizon Wireless struggle with their limited 3G capacity and disgruntled smart phone customers, Comcast, Time Warner Cable, and Bright House have joined with Clearwire and Sprint to roll out mobile WiMAX on an aggressive timetable. WiMAX provides a substantial competitive advantage over the 3G services now offered by the incumbents. WiMAX is much faster than 3G, and — unlike AT&T and Verizon — Clearwire has plenty of 4G spectrum to fulfill the promise of mobile broadband.
Although the incumbent mobile providers are getting ready to deploy LTE — their 4G mobile broadband competition to WiMAX — their infrastructure and devices are far behind Clearwire. LTE is far more complex than WiMAX; it is essentially a complete replacement for the existing cellular infrastructure. System integration and testing are very complex and time consuming. The cable operators will have several years of first-mover advantage to deliver on AT&Tís and Verizonís failed promises for data services.
Clearwire plans to cover up to 120 million people by the end of 2010 — a much faster rollout than the incumbent mobile carriers are planning for LTE. Clearwire has already launched Clear 4G service in many cable areas, and Comcast and Time Warner Cable have launched their own branded mobile broadband services (Comcast High-Speed 2go and Road Runner Mobile) based on Clearís 4G and Sprintís 3G networks.
These initial 4G offerings are based on USB ďdonglesĒ to enable WiMAX reception on mobile computing devices such as notebook and netbook PCs. Some already have WiMAX built in, with many more coming this year.
By making a deal with Sprint, the cable operators can leverage Sprintís extensive 3G network while Clearwire rolls out the 4G WiMAX network. Cable customers can choose between a 4G-only WiMAX service in their local area, or a combined 4G/3G if they want to use WiMAX where it is available, with fallback to Sprintís 3G network.
Mobile WiMAX is rolling out all over the world--there are already more than 500 WiMAX network deployments in more than 145 countries. In addition to Clearwire in the US, there are large deployments in India, Russia, Brazil and Malaysia. Analysts estimate that mobile WiMAX will have reached 2 million subscribers in January 2010.
The WiMAX Forum has created an extensive ecosystem of chip, infrastructure and device suppliers. Many innovative companies are creating hardware and software optimized for WiMAX. More than 150 devices have already completed WiMAX certification testing, and many more are on the way. As these devices roll out in the global market, their cost will drop quickly.
Unlike LTE, WiMAX was designed from scratch for data services, optimized for the efficient delivery of media over IP. It is not encumbered with the extensive back compatibility requirements that make LTE so complex and will drag out its deployment cycle.
Clearwire is far ahead of the incumbent carriers in the deployment of 4G. More than a year ago, Clearwire formally launched its first WiMAX system in Portland, OR, and Sprint deployed its first Xohm WiMAX service in Baltimore, MD. By joining forces in late 2008, Sprint and Clearwire combined their 4G spectrum and experience in deploying WiMAX, and were able to bring in Intel and Google as investors along with the cable operators.
Intel has been a long-time promoter of WiMAX. As part of its participation in Clearwire, Intel committed to building WiMAX into its Centrino 2 chip sets, aiming to make WiMAX as ubiquitous as Wi-Fi. Intelís first-generation Wi-Fi/WiMAX mini-PCI modules, released in 2008, are embedded in several notebook and netbook PCs. Its second-generation modules were released early in 2010 and will be in PCs later this year.
Google could also bring its power and support to WiMAXís success. As the creator of the Android mobile platform and an investor in Clearwire, Google could leverage the Clearwire network and Sprintís 3G by adding a WiMAX model to its Nexus family.
While AT&T Mobility and Verizon Wireless continue to fight each other over the speed and coverage of their limited 3G services, the cable operators are ahead in providing far better 4G services to their customers. By the time Verizon and AT&T get their LTE deployments under way, Comcast, Time Warner Cable and Bright House should have many happy customers.