While outdoor small cell products supporting both technologies have previously been announced, this is the first intended for small locations such as offices, shops and homes. It delivers up to 112.5 Mbps (DL) / 37.5 Mbps (UL) in LTE mode alongside a 14 Mbps W-CDMA mode. It will be launched commercially from December.
- The combined total of reserve prices is £1.3 billion
- Provisional application date is 11th December
- Bidding begins in January
- The outcome depends on the bidding process, but bidders should know what they have won and its cost in February/March
- Ofcom expects resulting services to be launched in May/June
- Press release
- Full statement
The UK’s first 4G service has just gone live with others set to follow next spring, but some people are asking whether anyone really needs faster 4G speeds yet.
In addition, the amount of spectrum that can be used for mobile services is more than doubling with the 4G spectrum auctions that have or will soon take place in Europe. So the future’s bright … our mobile and wireless networks should have the capacity to meet the future demands of consumers and businesses for using our smart phones and wireless broadband services?
However, the amount of data we consume through our mobile devices has been growing frenetically and many expect that growth to continue, particularly as smart phones and tablets become more widespread.
The chart below shows a series of market forecasts that vary widely but all show rapid growth – the Mid forecast shows roughly a 100 times increase in demand for mobile data over the next 10 years. NOTE – it’s plotted on a logarithmic scale which gives a compressed view of how fast demand for data is predicted to increase. Going up one notch on the vertical axis represents an ten-fold increase in demand (not a doubling). So is there perhaps a question to answer despite the imminent arrival of 4G and so much new spectrum. And what could we do if there were a risk of a mobile network capacity crunch in the future?
Source: Real Wireless
Does or can government help industry meet soaring demand?
One reason to consider this now is because, if we do need to bring more spectrum on stream in the future, the process is cumbersome to say the least – potentially years of international negotiations and heaps of technical work. In order to get more spectrum in 10 years’ time, we might need to set the wheels in motion quite soon.
The key things to consider are:
- how fast demand for mobile data may grow in the future, taking into account that some of the demand might be carried over Wi-Fi or indoor small cells (i.e. a mini femtocell or picocell base station inside a home or office)
- what spectrum may be available for mobile in the future – it also makes a difference whether other countries are considering doing the same thing
- potential future developments in technologies which could improve mobile network capacity.
My associates, Real Wireless, experts in mobile technologies mapped out the potential future technology enhancements that could increase the capacity of mobile networks in a study for Ofcom. Generally we can identify quite a few techniques now which could be introduced over the next 10 years (despite the uncertainty inherent in technology forecasts):
- deploying more infrastructure – either outdoor small cells (micro / picocells) or full scale base stations (macrocells)
- improvements to 4G technologies e.g. LTE Advanced should enable mobile networks to use spectrum more efficiently and flexibly and increase the top speeds mobile networks can deliver
- techniques to use mobile frequencies more efficiently – e.g. increased sectorisation and use of multiple antenna technologies (MIMO)
- distributed processing and sharing of traffic loads across multiple cell-sites – e.g. Coordinated multi-point and Cloud RAN.
Real Wireless worked out a number of plausible combinations of these techniques and looked at how much additional spectrum Ofcom is currently predicted to make available for mobile use over the next 20 years – up to 350MHz (which compares well to the 200MHz of 4G spectrum currently being released in Europe). This enabled them to make a good forecast (using information on real geographic areas) of how mobile network capacity is likely to increase in the future.
This allowed mobile data demand to be matched against mobile network capacity (once the fluctuations of mobile data demand during the day were taken into account to get a measure of the peak demand).
Spectrum currently earmarked for mobile could be exhausted in just over a decade
The result is that that there may well be a network capacity crunch, in as little as 10 to 12 years’ time in some areas, even given the likely technological improvements and increased spectrum we currently expect to come on stream.
By capacity crunch we mean that the mobile operators will have exhausted all the techniques for increasing capacity we can currently forecast, and the only way to increase capacity would be a significant expansion in base station sites. This would not only be costly, but physical and planning limitation could mean that a major expansion was unlikely to be feasible, particularly in urban areas.
The result was derived by evaluating the costs of the alternatives for increasing mobile network capacity, i.e. using more of the spectrum available for mobile vs. new technologies vs. deploying more base stations. The most cost effective way to increase capacity to meet demand was calculated on a rolling 2-3 year basis. The result is shown in the graph below.
Source: Real Wireless
What could be done to provide more capacity?
The option that is most in the control of governments and regulators is to try to allocate more spectrum for mobile. It’s likely that any suitable candidates are already being used for something else, hence there would be a cost to society in switching over such spectrum to mobile.
The 700MHz band is one possibility. Although currently used for terrestrial TV broadcasting, moves are afoot in Europe and in other regions to consider possible future mobile use. The 700MHz band is attractive because it may gain broad international support. This would make it more likely that leading handsets would work on it. Also, its physical characteristics mean that it can provide more reliable coverage, and hence capacity, compared to the majority of existing mobile spectrum.
700MHz could alleviate the potential capacity crunch
Our research shows that mobile operators could save substantial sums of money by deploying 700MHz spectrum at the key point in the future, instead of deploying more base stations. Consumers should benefit as well through lower prices and more consistent service quality.
However the timing of when 700MHz is available is important, particularly the closer we are to the worst case scenario of when mobile broadband demand is high and the government cannot release as much spectrum for mobile as it currently expects over the next 10 years.
If 700MHz spectrum were available in 2020, the benefits for mobile operators (and consumers) would be much greater than if it were only available when current 700MHz licences expire in 2026.
If 700MHz is not available until 2026, mobile operators would have to start deploying new base station sites when the capacity crunch hit in 2022 to 2024. Deploying new sites would lock the operators into a certain course of action (to exploit the new sites to the full). The potential cost savings from using 700MHz would be much lower than if 700MHz had been available before the new sites were deployed. In other words, there is a risk that the industry could get locked into the wrong technology path.
Despite the exciting changes that 4G is likely to make to our smartphone and tablet experiences, regulators and mobile operators have to keep an eye on the future needs of the mobile networks. Our technological inventiveness may not be enough to avoid a capacity crunch 10 years down the line, hence the mobile sector is likely to need even more spectrum, preferably harmonised on a European or wider basis.
The 700MHz spectrum is potentially a good prospect, but the cost savings it could bring need to be offset against the costs of clearing out the existing broadcasting users.
Full details of the work, including an illustrative video, download of the full report and a link to Ofcom’s use of analysis in their UHF strategy consultation are available at:
We have been supporting Virgin Media Business’s trials of a hosted managed small cell service. The trials have involved two small cell vendors: Alcatel-Lucent and Airspan, who worked with the Virgin team to trial LTE small cells mounted on lampposts in Newcastle and Bristol. The measurements included both indoor and outdoor locations.
Our role has been to provide independent analysis of the trial data and determine how it informs some of the key questions regarding small cells, including:
- How well do small cells work?
- Where should they be placed?
- How many are needed?
The results so far are very promising as indicated in Virgin Media’s press release. And the potential was brought to life in a compelling
demonstration yesterday, including representatives from mobile operators and the city councils. The shoebox – sized small cell was mounted outdoors but provided impressive service to a host of devices indoors, providing seven (yes, 7) high-quality video streams, 4-way video conferencing and web browsing – simultaneously!
But there are plenty of open questions and challenges ahead, including the practical challenges of gaining access to the right street furniture and of providing suitable backhaul. A hosted, managed service (for which we have coined the term SCaaS – Small Cells as a Service) looks like a promising option to help with both of these.
Yesterday’s event was also well-attended by the press – here’s a selection of the resulting articles:
- ITPro Virgin to boost UK’s 4G infrastructure with Small Cell technology
- TechWeekEurope Virgin Media Business To Offer Small Cell Wholesale Service
- TechWorld Virgin Media Business to offer “small cells as a service”
- WallStreetJournal The Boring Old Street Lamp May Hold the Future to Wireless Cities
- Huffington Post Small Cells Will ‘Supercharge Internet Connectivity’ For Mobiles
Broadband connections, whether on fixed or mobile networks, tend to get sold to customers on the basis of their headline (or ‘up to’) data speed or on the size of the monthly data allowance. Aside from the obvious additional issue of the price, that’s often about all that seems to differentiate broadband offers. Regarding the headline speed, service providers are quite reasonably coming under increasing scrutiny because those speeds are rarely available to customers. On average, Ofcom estimates that UK download speeds are only 45% of the advertised ‘up to’ speed.
For mobile networks it’s even harder to make specific claims about differentiation between offerings from different networks. As well as experiencing the same contention issues of fixed networks which make it hard to guarantee service when there are other heavy users in the same area, mobile connections are also subject to interference from surrounding cells, signal levels which can vary by factors of thousands over distances of a few centimeters, and even users daring to hold their phones.
Meanwhile, the “net neutrality” debate is raging around the world about the extent to which it is legitimate to manage traffic in order to avoid a small number of heavy users massively degrading the service for everyone else. Verizon and Google in the US have come up with a joint policy proposal, which argues that mobile networks do need such management. However, the FCC appears underwhelmed by the proposal. The European Commission is also consulting on the issue, while Ofcom in the UK is joining the debate.
One argument (and broadly the situation which applies in Europe today) holds that no regulation is necessary, and traffic management should be permissible, because consumers will vote with their feet against excessive restrictions. This relies on the broadband market being sufficiently competitive that consumers can easily switch providers and have other providers with different policies to switch to. The counterargument is that this is all too hard for consumers and the internet should be free and open without discrimination to any service.
An important approach to resolving this is for regulation to focus on transparency, so that consumers are told in clear terms when traffic management is applied. This may also require some definition of the types of traffic management which are permissible.
The quantity of mobile spectrum, the viable size of network and the spectrum efficiency are all finite and are bound to lead to capacity limitations from place-to-place and from time-to-time. It then seems to me that traffic management is essential to protect consumers, ensuring they get a service which is useful despite the excesses of others in the network. It’s a bit like a trip to the pub: one loud and obnoxious drinker can spoil the enjoyment for all, so I have no objection to the publican having powers to eject those who breach accepted norms. I would however object if only one type of drink was available.
Further, the application of appropriate traffic management process may have another positive side effect for consumers. Systems like LTE are capable of assigning very different quality-of-service levels to different users, even though they share the same spectrum. So one user could get a best-efforts web browsing service , contending with other users on the same service for the resources allocated for this, while others can gain access to a guaranteed bit-rate service which ensures (within reason) that they’ll always get a solid service with a given level of quality.
This feature of LTE is much less talked about than LTE’s speed, but is potentially far more significant. I hope it leads to a wider range of choices for consumers and ultimately a better service. Here’s an example from the fixed world, where the service is sold as much on its latency as its speed.
So less focus on speed and more on other service quality dimensions could be good for mobile operators and consumers alike, while supporting the need for transparency under any future net neutrality regulations.
Apple’s recent recession-bucking third-quarter results have been widely reported, with continued growth of sales of the iPhone (a staggering 626% on the previous year) and its associated apps as a major driver. Just as interesting to my mind, however, is the associated fall of 7%) in sales of the iPod. The iPod was responsible for Apple’s recent resurgence, yet now it is just one more app – albeit a tightly-integrated one – amidst the many on the iPhone.
So it seems that users value the wireless connectivity on the iPhone particularly highly. What’s more, they value the wide-area (cellular) connectivity compared with the small-area (Wi-Fi) connectivity of the iPod touch, which is otherwise virtually identical in terms of functionality. And the price premium that this wide-area connectivity demands is enormous, when you factor in both the initial purchase price of the devices and the ongoing service costs.
It’ll be interesting to see if this value translates into other devices. One potential example is the Amazon kindle e-book reader, whose wide-area(3G) connectivity contrasts sharply with the need to sideload books onto the main competitor’s devices (Sony). One factor which helps is that Amazon appear to have delivered global connectivity for the Kindle via a single deal with AT&T. As well as simplifying the deal-making for Amazon, this also delivers the potential for users outside the US to gain unparalleled coverage, accessing any network which is available to them even in their home country (see Disruptive Analysis’ speculation on this deal).
These may be early examples of a new wave of embedding wide-area wireless in a wider range of devices. For example, the Wireless World Research Forum has set out a bold vision for 7 trillion wireless devices serving 7 billion users by 2017 (http://www.wireless-world-research.org/). Clearly that implies that most of the growth is going to come from machine-to-machine communications, or if you prefer, the Internet-of-things, enabled by low cost next-generation wireless modems, particularly using next-generation LTE/WiMAX/IMT-Advanced technologies.
Do you want wireless with that?