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January 23, 2013

Expert reaction: 4G Auction

Ofcom has announced that the first round of bidding for 4G spectrum has begun and expects operators to rollout services by this spring. CBR rounds of expert opinions on the auction, 4G services and the transition from 3G to LTE.

By Tineka Smith

Lyn Cantor, President and CEO, Tektronix Communications

The opportunities of 4G (LTE) are here and they’re here now. The dilemma is that they bring a number of sizeable challenges with them. Operators are concerned about integration and handovers, among other things – straddling what will eventually become a transition from the 2G and 3G environment to the new world of LTE.

Tektronix Communications has one of the largest deployments of LTE monitoring, and service assurance, systems in the world and is already monitoring commercial services over LTE. Network analytics have revealed that while many operators are concerned about potential revenue loss to OTT service providers, or simply through not being fully prepared for the transition, others are ahead of the curve. They are not only preventing ARPU erosion, they are reversing the trend. These are the companies that are maintaining their challenger carrier status by gathering the real and actionable insights into the customer experience.

The adoption of a simple KPI approach, customised for an operator’s specific business and performance goals can cover network, services and subscribers across all technologies and enable an operator to address issues arising both from legacy networks and from LTE. Since 2G and 3G will remain with us for some time to come, network analytics must straddle the transition. There is no immediate point in time when subscribers will upgrade en masse, so the fact is the operator has to provide a service that is all things to all subscribers. It has to be sure also that it can benchmark vendors to ensure continuity of service. And that’s where the competitive edge ultimately lies.

Anukool Lakhina, Founder and CEO, Guavus

"With £3.5bn worth of investments on the table in relation to 4G, operators really need to think about the real-world value of the contracts they are pitching for. It’s easy to get carried away with the possibilities that 4G can open up; but operators need to look at the actual returns that they can expect to generate. Many operators ended up overpaying for 3G licenses, and to avoid doing so again they should be looking to learn some lessons by leveraging Big Data analytics to ensure they are getting a fair deal with optimum ROI.

"Using Big Data analytics operators can track the trends in uptake in 3G, as well as looking at current customer data to assess who has a 4G enabled phone? Who is due an upgrade soon? Which customer profiles are most likely to upgrade or move to 4G straight away and which will wait? Where are the biggest data consumers located? Having the
answers to questions such as these will help in capacity planning and help to determine the level of investment required to generate optimum revenue returns."

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Doug Suriano, CTO, Tekelec

As UK mobile operators invest in LTE, a sophisticated signalling infrastructure will be required to handle the huge surge in Diameter messages triggered by LTE effectively. The LTE Diameter Signalling Index predicts that LTE Diameter signalling traffic in EMEA will see a 320% CAGR from 2011 to 2016, making it the second fastest growing region in the world.

Always-on smart devices and advanced services will require Diameter signalling to set-up data sessions, authorise subscriber activity, authenticate subscribers and accurately charge for data usage. The constant ‘pinging’ and orchestration will require that UK operators either proactively manage Diameter traffic now using Diameter Signalling Routers (DSR) at the earliest stages of LTE, or invest in DSR solutions once the network builds out.

The LTE Diameter signalling increase will require more sophisticated roaming arrangements than at present, concurrent data sessions, video streaming, QoS guarantees and behavioural changes via social networking. All of these trends will create exponential increases in Diameter signalling volumes that operators must manage.

Waiting could increase the risk of outages and add costs when deploying in markets where smartphone uptake is increasing and the sophistication of services is on the rise.

Richard Stone, Senior Solutions Manager of Mobile, Compuware

For operators struggling to keep up with ever-increasing customer demand for rapid data and internet access, 4G might just sound like the answer to their prayers. However, unless operators start to look at the entire service delivery chain, rather than just viewing their immediate networks, then they will never really understand what is causing data congestion or eating bandwidth. As a result, they run the risk that 4G may be a big (and expensive) disappointment to them, and their customers: they’ll be in exactly the same place of unhappy customers and overloaded networks.

Why? The forecasted capacity of 4G networks (from real Wireless) is expected to be about 5 times the capacity of 3G, but the growth in demand is forecasted to be 8 times greater than today. This means that without additional spectrum or topology, 4G networks in 2015 will be at the same level of capacity (and congestion) as 3G networks are today. In other words, we’ll be right back to a ‘capacity deficit’ (and the associated performance issues) in just 3 short years. They need to take a holistic view of the network and the data that’s flowing across it. A significant but poorly understood fact is that not all data is "good" data. Recent tests have shown a considerable amount of the data is actually wasted data – data that the user never asked for, and pre-fetched data that subsequently doesn’t get used. This particularly noticeable with video, where the tests revealed entire videos being downloaded in anticipation that the user would watch them – this amounts to many MB of wasted data clogging up already overloaded networks. Having insight into where data is being wasted enables operators to have the right conversations with the right people, for instance OEMs and OTTs. This in turn will mean operators can significantly improve the utilisation of their networks, and finally start making good on the promise of 4G, rather than trusting it to do the job by itself.

Ian Brown, CEO, Axell Wireless

The UK regulator, Ofcom has stipulated that in-building LTE coverage must be made available to 98 per cent of the UK population by the beginning of 2017. This demand has, in turn, stimulated the in-building wireless market. Indeed, a recent report from ABI Research has revealed that the global market for in-building wireless equipment is on course to amass to over $2 billion by 2013.

The in-building wireless market is witnessing increasingly high levels of investment from UK operators. The realisation that the vast majority of mobile data usage is emanating from within buildings – from office blocks and shopping centres to airport terminals and sports stadia – has gone a long way towards prompting this increased investment. This has led to a situation in which many operators are now building their networks from the ‘inside out’ rather than the ‘outside in’, which represents a substantial change in mind-set from a few years ago. However, it should be noted that this increased investment is not solely the result of an LTE ‘gold rush.’

While Ofcom have released both the 800MHz and 2600MHz bands to provide operators with a much needed increase in spectrum to help support newly introduced LTE services, in-building coverage systems will still need to support multiple frequency bands, including existing 2G and 3G services. In addition, many operators are seeking to "re-farm" historical 2G and 3G frequency bands such as 900Mhz and 1800Mhz in order to free up more spectrum for high speed LTE services. Therefore, it is critical that the in-building system allows 2G, 3G and 4G services to all co-exist within the same frequency band.



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