2008 12 rysavy spectrum demand

8/13/2019 2008 12 Rysavy Spectrum Demand

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MobileBroadband

SpectrumDemand

December 2008

Copyright2008RysavyResearch,LLC.Allrightsreserved.

http://www.rysavy.com


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2MobileBroadbandSpectrumDemand

Table of Contents

EXECUTIVE SUMMARY............................................................................................ 3

FORWARD BY PROFESSOR WILLIAM WEBB............................................................ 4

1 INTRODUCTION............................................................................................... 5

2 MARKET FACTORS............................................................................................ 5

2.1 CRITICAL MASS-MARKET ADOPTION ..................................................................... 6

2.2 USE OF HIGH-BANDWIDTH DATA APPLICATIONS........................................................ 6

2.3 TRUE MOBILE BROADBAND USER EXPERIENCE .......................................................... 7

2.4 SMARTPHONE EFFECT....................................................................................... 8

2.5 APPLICATION INNOVATION EFFECT........................................................................ 9

2.6 INNOVATIVE PRICING......................................................................................10

2.7 FIXED-MOBILE SUBSTITUTION AND FIXED-MOBILE CONVERGENCE..................................10

3 QUANTITATIVE ANALYSIS............................................................................. 11

3.1

GROWTH IN IPTRAFFIC ...................................................................................11

3.2 CURRENT MOBILE DATA GROWTH .......................................................................11

3.3 PROJECTED MOBILE DATA GROWTH .....................................................................12

3.4 CAPACITY OF WIRELESS NETWORKS RELATIVE TO APPLICATION DEMAND ..........................13

3.5 MONTHLY USAGE ANALYSIS ..............................................................................16

3.6 CAPACITY OF WIRELESS NETWORKS RELATIVE TO AVERAGE SUBSCRIBER USAGE .................18

4 OTHER SPECTRUM CONSIDERATIONS............................................................ 20

4.1 NEEDS OF ADVANCED TECHNOLOGY .....................................................................20

4.2 CONSUMER EXPECTATIONS ...............................................................................21

4.3 NEW WIRELESS ARCHITECTURES AND SPECTRUM IMPLICATIONS ....................................22

4.4 SPECTRUM ANALYSIS BY OTHER ORGANIZATIONS .....................................................23

5

CONCLUSION................................................................................................. 24

Rysavy Research provides this document and the information contained herein to you for informational

purposes only. Rysavy Research provides this information solely on the basis that you will take responsibility

for making your own assessments of the information.

Although Rysavy Research has exercised reasonable care in providing this information to you, Rysavy

Research does not warrant that the information is error-free. Rysavy Research disclaims and, in no event,

shall be liable for any losses or damages of any kind, whether direct, indirect, incidental, consequential, or

punitive arising out of or in any way related to the use of the information.


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ExecutiveSummaryTheconvergenceof the Internetandmobilecomputing isaccelerating theconsumptionof licensed spectrum. For

example,watchingaYouTubevideoonamobilephoneorwirelessenabled laptopconsumesalmostonehundred

timesthedatabandwidthofamobilevoicecall. Andwhereasamobilevoicecall typicallyconsumes612kbps,

enhancedhighspeedmobileInternetaccessconsumesupto5Mbpsontodaysdeployednetworks.Thus,withinthe

nextdecade,

licensing

significant

amounts

of

additional

spectrum

will

be

imperative

ifthe

United

States

wants

its

mobileoperatorstocontinueexpandingandupgradingthecountryswirelessbroadbandnetworks.

OtherorganizationshavestudiedthespectrumneedsofemergingwirelessnetworksindepthincludinganITUreport

thatprojectsatotalnationalspectrum requirementofasmuchas840MHzby2010,1300MHzby2015and1720

MHzbytheyear2020.Theseamountsfarexceedcurrentlyavailablespectrum.UnliketheITUReport,thisreportdoes

notidentifyhowmuchlicensedspectrumwillbeneeded,norwhatbandsareoptimal,toensureU.S.mobilenetworks

stay ahead ofexplodingconsumer demand. Rather, this report explains the dynamicsof the U.S.mobile industry,

including the trends behind the growth of the mobile broadband market, and quantifies the amount of data and

spectrumconsumedbynewdevicesandapplications.

Whereas previous wireless networks offered a somewhat sluggish data experience, third generation networks are

providingusers

atrue

broadband

experience.

Faster

speeds,

as

made

available

with

3G

and

other

emerging

wireless

technologies,translatedirectlytousersatisfaction.Currentusagetrendsconfirmthisreality.Ericsson,a leading3G

infrastructurevendor,indicatesdatatrafficisalreadythreetimesthevoicetrafficonsomeUMTSnetworkstheyhave

measuredwithinthelasttwelvemonths.Aleadingnationalwirelessbroadbandproviderpredictsthatby2018,3G/4G

mobiledatatrafficwillexpandbyafactorof250 (conservativeestimate)to600 (aggressiveestimate). Incontrast,

mobilevoicetrafficisexpectedtoonlytripleinthatsameperiod.

Thecapacityofawirelessnetwork (andthereforethenetworksabilitytosupportwirelessbroadbandservicesand

applications)inanygivenlocationdependson spectralefficiency,aswellastheamountofspectrumtheoperatorhas

available. Mobile network operators are currently implementing or considering various mechanisms to maximize

capacitybymanagingbandwidthconsumptionintheabsenceofaccesstomorelicensedspectrum. Whileengineering

greaterspectral

efficiency

and

building

more

cell

sites

will

increase

capacity,

alone

they

are

unlikely

to

address

the

expectedmagnitudeofthedemand. Longterm,morespectrumisneededtoenableU.S.mobilenetworkoperatorsto

keeppacewithconsumerdemandformoreandfastermobilebroadband.

Inaddition tohelpingprovidersmatchdemand,makingmorecommercial licensedspectrumavailablewill facilitate

thedeployment ofnewwireless technologies thatbenefit from deploymentacrosswide radiochannels.However,

allocatingwiderchannelsinexisting,licensedspectrumbandstoaccommodatenewtechnologies,whilecontinuingto

supportlegacytechnologies,istechnicallyandoperationallydifficult. Thisisbecauseoperatorstypicallydonothave

largeblocksofunusedspectrumtheycanaccessacrosstheircoverageareas.Thus,deploymentofnewtechnologies

willbegreatlysimplifiedifdonethroughnew,licensedbands.Asithasthroughoutthehistoryofthewirelessindustry,

thisadditionaldeploymentandexpansionofnetworkcapabilitieswillsupportarobustcycleofinnovation.Justasthe

Internethasprovidedfertilegroundfornewapplications,itisinevitablethatamobileInternetwillspurcomparable,if

notgreater innovation.Forexample,thereareover10,000applications forthe iPhone,eventhoughthedeveloper

toolsweremadeavailablejustthisyear.

Mobilebroadbandnetworkscanonlymeetconsumerdemandsformoreandfastermobilebroadbandthroughaccess

tomorelicensedspectrum,anddeploymentofmoreinfrastructure.Giventhelongtimeframesinvolvedingoingfrom

planningtoauctiontodeployment,planningfornewlicensedspectrumshouldbeginassoonaspossible.


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ForwardbyProfessorWilliamWebbProfessorWilliamWebb,FIEEE

HeadofResearchandDevelopment,Ofcom

London,England

Author,"WirelessCommunications:TheFuture"and"EssentialsofModernSpectrumManagement"

Itappearsthatthetimehasfinallycomeforwirelessdataservices.Aftermanyyearsofhopesandfalsestarts,theuse

of cellulardata cards for laptops and inbuilt data capabilities in smart phones is growing rapidly. This in turn is

dramatically increasingthetrafficflowacrosswirelessnetworks,bothcellularandWiFi.It isdifficulttopredicthow

long this growth will continue for and difficult to know how well placed operators are to make use of network

enhancementsandsmallercellstoaccommodatethistraffic.Iftrafficgrowthcontinuesaspredictedthereisastrong

likelihoodthatcellularoperatorsaroundtheworldwillfaceincreasedcapacityconstraints.Thisreporthelpsprovide

further evidence as to the extent of the growth and discusses possible solutions to the problem. As such it is a

valuablecontributiontoadebatewhichwillunfoldoverthecomingmonthsandyears.

Thisreportsuggeststhatakeypartofthesolutiontoresolvingthiswill lie inoperatorsgainingaccesstoadditional

spectrum;however,asexplained intheReport,morespectrumwillonlybepartofthesolution. Astheyare inthe

process

of

doing

in

the

U.S.,

operators

will

also

need

to

explore

new,

more

efficient

technologies,

or

new

architectures, such as picocells and femtocells and decide on the best balance of all of these solutions to deliver

sufficientnetworkcapacity.

Manyentitiesareinterestedinmorespectrumbutthosethatvalueitthemostwillbetheoneswhocanquicklyput

thespectrumtouseandearnthegreatestreturnonthecapitaltheyinvest.Ensuringthatspectrumismadeavailable

tothosethatvalueitthemostandinatimelymanneristheroleofthenationalregulator theFCCintheUS,Ofcom

intheUK,etc.Someofthemostprogressiveregulatorsaremakinguseofthemarkettoachievethis;usingauctionsas

theonlyeffectiveandtransparentwaytoensurethatclearedspectrumgoestothosethatcangeneratethegreatest

value from itand trading toallow spectrum that is inuse tochangeownershipasoptimaluseschangeover time.

Maximumflexibilityisachievedthrougha"technologyandpolicyneutral"approachthatallowsanypieceofspectrum

tobe

used

by

any

technology

and

without

associated

policy

constraints

such

as

the

need

to

provide

services

to

particularsetsofusersorcommunities(theseimportantrequirementscanbeaddressedinotherways).

The final piece in this puzzle is a recognition that spectrum in the frequency bands below around 45GHz (with

important exceptions) is generally more valuable used in a licensed application rather than licenseexempt or

"spectrum commons." Research in the UK has shown that licensed applications such as cellular and broadcasting

generatefarmorevaluetotheeconomythancommonsusageinthecaseoftheUKonly1%ofthetotalvaluefrom

theuseof spectrum was generated bycommonsusage such asWiFi. Other developedcountriesare likely to see

similarnumbers.Sincemostcommonsusageisshortrangeitthereforemakessensetoplaceitabovethefrequencies

that are readily usable for cellular and broadcasting. However, bands such as at 2.4 GHz are an exception to this

becausetheywouldbeoflimitedusetocellularduetotheinterferencealreadyoccurringintheband.Inpassing,itis

alsoworthnotingthatwhileinnovationoccursincommonsitalsohappensinlicensedbands,andindeedmanyofthe

most important innovations of the last decade such as GPS, wireless email, mobile TV, texting and more have all

occurredinlicensedspectrum.

Cellularcommunicationsprovidesgreateconomicvaluetoacountryandtheadditionofhighspeeddatacapabilities

canonlyincreasethatvalue.Ensuringthatthereareasfewbarriersaspossibletoitswidespreaddeploymentshould

helpgrowthisvaluemuchfurthertothebenefitofallinthecountry.Anyworkthatcanhelpinformthisisavaluable

contributiontothedebate.


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1 IntroductionWirelesstechnologyupholdsavibrantindustryattheheartoftheAmericaninformationeconomywith

morethan264millionsubscribersintheUStoday.ArecentCTIAstudyanticipatesthatthetotalvalueof

mobilebroadbandandvoiceserviceswillexceed$427billionbytheyear2016,contributing$860billion

tothe

Gross

Domestic

Product

over

the

next

ten

years.1

Increasingly,

subscribers

are

using

mobile

data

serviceswithnonvoicerevenuegrowing40%inthefirstsixmonthsof2008.2

The confluence of the Internet and mobile/wireless computing is accelerating the consumption of

spectrum. With data applications able to consume far more bandwidth than voice and with an

increasingnumberofmobileusersengaging inevermorebandwidthintensiveapplications, itisonlya

matteroftimebeforecurrentcommercialmobileradiospectrumisexhausted.

Thisreportsummarizesthemarketfactorsbehindthegrowthofmobilebroadbandincludingitemssuch

as critical massmarket adoption, use of highbandwidth applications, smartphone platforms that

facilitateandstimulatedemandformobiledataapplications,innovativepricing,andacceleratingfixed

mobilesubstitution.

This

report

also

provides

aquantitative

analysis

of

demand

for

licensed

spectrum

anddiscussesthespectrumneedsofadvancedtechnologies.

Within the next decade, significant amounts of additional licensed spectrum will be imperative for

expanding networks towards a ubiquitous mobile Internet, one that provides national economic

advantagesandthathelpsprovidebroadbandtoeveryAmerican.

While some operators have attempted to use unlicensed spectrum to augment or take the place of

widearea, licensed mobilebroadband networks (e.g., municipal and metro WiFi networks), these

unlicensed networks have experienced technical and business difficulties including poor indoor

coverage.Therefore, they remainanunproven solution toexpecteddemand formorespectrum. The

focusof

this

report

is

thus

on

licensed

spectrum

and

the

US

mobile

networks

that

depend

on

it.

2 MarketFactorsWeareatauniqueandpivotaltimeinhistory,inwhichtechnologycapability,consumerawarenessand

comfort with emerging wireless technology, and industry innovation are converging to create mass

marketacceptanceofmobilebroadband.Thesemarketfactorsareactingmultiplicativelytoaccelerate

usageofspectrumbasedservices.TheSr.VPofEngineeringandOperationsatTMobilerecentlystated

Weareonthevergeofanexplosioninmobilebroadband.3

Themarket factorscontributingtothis impendingexplosionareshown inthe followingfigureandare

discussedbelow.

1StudyShowsU.S.EconomyGetsMajorBoostfromWirelessBroadband,May29,2008

http://www.ctia.org/media/press/body.cfm/prid/1755.

2StatisticsreleasedbyCTIA9122008attheCTIAWIRELESSI.T.&Entertainment2008show.

3 Neville Ray, Sr. VP of Engineering and Operations, Operator Panel, 3G Americas Analyst Conference, Dallas,

October14,2008.
http://www.ctia.org/media/press/body.cfm/prid/1755http://www.ctia.org/media/press/body.cfm/prid/1755


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Figure1:MultiplicativeEffectofMultipleMarketFactors

2.1 CriticalMass-MarketAdoptionWith

the

percentage

of

wireless

users

taking

advantage

of

the

mobile

Internet

growing

quickly,

the

market is reachingcriticalmass, inwhich theexpandingmarketjustifiessignificant investmentby

large companies. Recent entrants such as Apple (iPhone) and Google (Android smartphone

platform)aretwovisibleexamples.AsofMay2008,thenumberofactiveusersofmobileInternet

services in the UShaddoubled to 40 million users fromjust two years previously.4 A far greater

numberalreadyusetextmessagingandarepoisedtostartengaginginmoresophisticatedservices.

Ericssonpredictsthatmobilebroadbandsubscriptionswillmatchwirelinebroadbandsubscriptions

onaglobalbasisby2009andwillexceedwirelinebyafactoroffourby2013.5

The result is a rapidly expanding customer base that encourages business investment in new

networks,

in

new

devices

and

in

new

applications,

thus

further

fueling

market

growth.

2.2 UseofHigh-BandwidthDataApplicationsWhereas wireless network deployments were initially driven by voice usage, it is wirelessdata

applications that arenowprimarilydrivingcapacity demand. On latestgeneration networks,data

applications recently started to account for more traffic than voice. Popular applications such as

mobilevideoareparticularlydata intensive.Forexample,watchingaYouTubevideoonamobile

phoneor laptopconsumesalmostonehundredtimesthedatabandwidthofavoiceconversation.

Downloading a Microsoft PowerPoint file of fivemegabyte (Mbyte) size to view it on a phone or

laptopconsumesthesameamountofdataonthedownlinkasspeakingonaphoneformorethan

anhour.

Later

sections

in

this

report

examine

these

application

impacts

in

detail.

4CriticalMass TheWorldwideStateoftheMobileWeb,NielsenMobile,July2008.

5Ericsson,NorthAmericanInvestorRelationsForum,BostonAugust14,2008.



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2.3 TrueMobileBroadbandUserExperienceWhereas previous wireless networks offered a somewhat sluggish data experience, 3G networks

(e.g.,EVDO6fromSprintandVerizon,HSPA7 fromAT&TandTMobile)areprovidinguserswitha

truebroadbandexperienceandaresupportingawiderrangeofbusinessandconsumerapplications

than ever before. These include email, Internet Web access, worker collaboration, enterprise

database access, multimedia such as video, gaming, mobile commerce, connected consumer

services(e.g.,AppleiTunes,AmazonUnbox),andsocialnetworking.Thefollowingtablesummarizes

thekeycharacteristicsofthedifferentgenerationsoftechnology.

Table1:GenerationsofCellularTechnologyandCharacteristics

Generation Technology TypicalData

ThroughputRates

Comments

1 Analog Data generally not

used

First cellular systems. Deployed in the

1980s.

2

Digital

100

thousand

bits

persecond(kbps)

Deployedin

the

1990s.

3 Digital 1 million bits per

second(Mbps)

Deployment began this decade. Now

widelyavailable.

4 Digital 10 Mbps or higher

expected

No standards exist yet, but requirements

being developed. Deployment expected

duringnextdecade.

Asaresult

of

the

improving

throughput

rates

that

make

more

applications

feasible,

3G

users

are

significantly more likely to engage in a higher number of data sessions than 2G users. Lehman

Brothersnotesthat3Gdevicesdrive20%higheraveragerevenueperuser(ARPU)than2Gdevices

and integrated devices (those with QWERTY keyboards) driving almost double the revenue.8

Simultaneously,thenumberofUSsubscriberswith3Gdevices isshowingrapidgrowth,measuring

80%during thepastyear to64.2millionsubscribers.9Agreaternumberofuserswith3Gdevices

engaginginmoredataapplicationsdirectlytranslatestogreaterspectrumusage.Asatisfyingmobile

broadbandexperience inwhichapplicationsarefastandresponsiveencouragessubscriberstouse

6 Evolution Data Optimized, a highspeed data service for Code Division Multiple Access 2000 (CDMA2000)

networks.

7HighSpeedPacketAccess,ahighspeeddataservice forUniversalMobileTelecommunicationsSystem (UMTS)

networks.

8LehmanBrothersEquityResearch,WirelessServices,MobileData:TheEngineBehindWireless,April24,2008.

9comScore,September2008,reportedathttp://www.cellular news.com/story/33436.php .
http://www.cellular-news.com/story/33436.phphttp://www.cellular-news.com/story/33436.phphttp://www.cellular-news.com/story/33436.phphttp://www.cellular-news.com/story/33436.php


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moredataapplications.This,inturn,drivesoperatorstoexpandtheir3Gnetworkdeployments,as

wellastoenhancenetworkcapability,whichthenencouragesdeveloperstobuildnewmobiledata

applications. For example, there are already more than 10,000 applications for the iPhone, even

thoughthedevelopertoolswereonlymadeavailableforitthisyear.10

According to Nielsen, faster speeds, as made available with 3G and other emerging wireless

technologies, translate directly to user satisfaction, As with PC Internet use, faster data transfer

speedscloselyrelatetoconsumersatisfactionandwillhelptodriveoverallinterestandadoptionof

the platform.11 With 4G platforms12 soon to be deployed, user experiences will continue to

improve,furtherstimulatingusage.

We are witnessing the culmination of massive network investment, technology innovation and

development,spectrumdeployment,andusersophistication.Continuedgrowth,however,depends

on operators ability to keep providing users with satisfying network performance. If networks

become overloaded, the result is slower and more erratic throughput speeds, packet delays,

unreliableapplicationbehavior,anddisconnects.

2.4 SmartphoneEffectTheuseofsmartphones,phonesthatincorporatecomputerandInternetcapabilityandthatcanrun

awiderangeofdataapplications,issurging.Thisisbecauseanexpanding3Gnetworkfootprintcan

nowfullysupporttheircapabilitiesand,withrisingvolumesandeconomiesofscale,theyaremuch

moreaffordable,withmanymodelsnowpricedaround$100.MerrillLynchanticipatesthat40%of

phonescouldbesmartphonesby2010.13TheRIMBlackBerry,whichownsasignificantshareofthe

smartphonemarket,hasrevealedthehugedemandforwirelessemail,aswellasotherapplications

such as mobile Web browsing. Similarly, Apples iPhone demonstrates how a powerful handheld

computer that has an intuitive user interface can stimulate usage. Nielsens studies show iPhone

usersare

five

times

more

likely

to

use

the

mobile

Internet

than

the

average

mobile

consumer.14

WirelessWeekreportsRalphdelaVega,CEOofAT&TMobility,assayingthat95%ofiPhoneusers

regularlysurftheInternetwiththeirphonesand51%ofiPhoneuserswatchvideosonYouTube.15

10http://www.10000iphoneapplications.com/.


12Atthistime,thereisnoformaldefinitionof4G.4GrequirementswillbeeffectivelydefinedinanInternational

Telecommunications (ITU) project called International Mobile Telephone Advanced (IMTAdvanced), with

requirementsexpectedin2008andfirstcompliantnetworksexpectedaround2012.Nevertheless,systemssuchas

WiMAXandLongTermEvolution(LTE)arecalled4Gplatforms,sincetheywillbeenhancedinsubsequentversions

tomeetIMTAdvancedrequirements.

13MerrillLynch,GlobalWirelessMatrix,1Q08,July18,2008.


15http://www.wirelessweek.com/article.aspx?id=161884 .
http://www.10000iphoneapplications.com/http://www.wirelessweek.com/article.aspx?id=161884http://www.wirelessweek.com/article.aspx?id=161884http://www.10000iphoneapplications.com/


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GoldmanSachsreportssmartphoneusersasthemobiledataleaderswith88%usingtheirdevicefor

noncallingactivity.16

Other successful smartphoneplatforms includeWindowsMobile,PalmOSandSymbian.Googles

newAndroidplatformforsmartphonesisanotherexampleoftheintensedevelopmentoccurringin

handheld,mobilecomputingcapabilities.This isespeciallyrelevantwithonestudypredictingthat

by2020mobilephoneswillbetheprimaryInternetdevicesformostpeopleintheworld.17

2.5 ApplicationInnovationEffectWhencompaniesbegandeployingbroadbandnetworks,nobodyenvisionedanapplicationsuchas

YouTube.Butcapabilityencourages innovation.JustastheInternethasprovidedfertilegroundfor

new applications, it is inevitable that mobile broadband networks will spur comparable, if not

greater, innovation. This occurs through a virtuous cycle in which more capable networks enable

moreapplications,attractinggreaterusageandsubscriptionrates,encouragingmoredevelopersto

createbetterapplicationsanddevices,furtherstimulatingdemandandmarketgrowth.Operators,

seeing

a

significant

business

opportunity,

are

emphasizing

data

services

in

their

promotions,

offers,

anddevicefeatures.

Furthermore, since mobile broadband networks and the Internet are increasingly intertwined,

innovation in one readily extends to the other. Some of the key applications that appear to be

driving massmarket adoption of wireless broadband include mobile video, social networking,

enterprise productivity, usergenerated content, instant messaging, locationbased services, and

Web 2.0 applications.18 Users, particularly younger ones, are expecting the same Internet

experience on their mobile devices as that available on desktop systems and vendors are

responding.Opera,a leadingmobilebrowservendor,announced inSeptember2008 that itsnew

browser will bring the full desktop Webbrowsing experience including support for JavaScript,

acceleratedvector,

and

video

content

to

smartphones

and

mobile

Internet

devices.19

Using nextgeneration infrastructure enhancements such as IP Multimedia Subsystem (IMS),

operators will be able to make data services even more attractive by allowing applications to

combine multiple types of communications and information dynamically including messaging,

location,pushtotalkandvideo.Forexample,userswillbeabletostartan instantmessagingchat

sessionand,inmidsession,addvoiceorvideocommunications.AT&Talreadyoffersavideosharing

applicationbasedonIMS.TheseIMSapplications,particularlyvideo,willfurtherincreasespectrum

usage.

16 The Goldman Sachs Group, Inc., Americas: Wireless Mobile Data 1.1 Recent Data Points Strengthen the

Theme,June2008.

17PewInternet&AmericanLifeProject,TheFutureoftheInternetIII,December14,2009.

18Web2.0referstotechnologiesenablingrichInternetapplicationswithdynamicandinteractivecontent.

19http://www.opera.com/pressreleases/en/2008/09/09/.
http://www.opera.com/pressreleases/en/2008/09/09/http://www.opera.com/pressreleases/en/2008/09/09/


10/24


2.6 InnovativePricingManyearly serviceplans forwirelessdata,aswellasvoice,werebasedonusage. In1998,AT&T

Wireless introduced the firstbucketplancalledDigitalOneRate,aplan thatprovidedsubscribers

witha largenumberofvoiceminutescombinedwithno longdistanceorroamingcharges.Usage

surged and other operators quickly offered similar plans. Today, most pricing plans follow this

model.

Similarly,flatratepricingplansformodemcardsandsmartphoneshaveresultedinuseracceptance

ofmobiledataandhavesignificantlyincreaseddataconsumption.20

2.7 Fixed-MobileSubstitutionandFixed-MobileConvergenceInsignificantand increasingpercentages,peoplearesubstitutingmobilephonesfortheirfixedline

phones. The Center for Disease Control and Preventions National Center for Health Statistics on

December17,2008announcedinpreliminaryresultsthatduringthefirstsixmonthsof2008,nearly

17.5%ofAmericanswerewirelessonly.21ThisisconsistentwithaNielsenreportthatbyJune2008,

17.1percent

of

US

households

had

substituted

awireless

phone

for

their

landline

phone

with

an

annualgrowthofthreefourpercent.22

Similarly,usersarestartingtousemobilebroadbandconnectionstotheInternetasanalternativeto

wirelineconnectionssuchasDSL.IfpeoplearealreadypayingforwirelessInternetservice,theyare

reluctanttopayseparatelyforwired Internet.Nielsenasserts,Clearly, Internetaccess isthenext

frontierofwirelesssubstitution.23MorganStanleymakesthe followingstatements,Wearealso

starting to see the early signs of wireless data substitution, as laptop cards and smartphones

proliferate. The rollouts of WiMAX and LTE will make wireless data substitution even more

compelling.Sweden&Austriahaveseenasignificant impactonDSLaddsfrommobilebroadband.

Mobilebroadbandaccountedformorethan70%oftotalbroadbandaddsinAustrialastyear.24

Furthermore, a large number of people with access to mobile broadband services may not have

access to wireline services. This is where wireless technology can address the digital divide for

broadbandservices. Infact,this isalreadyhappening forvoiceservices.TheNielsenstudyreports

that many voice substitutors are in lowerincome brackets (46% having a household income of

$50,000orless).

Lastly,todaysteenagers liveandbreathebytheirmobilephonesusingthemforvoice,messaging

and, increasingly,forsophisticatedsocialnetworkingfeatures.Webcentricmobileapplicationsare

20

Note

that

flat

rate

pricing

plans

do

have

terms

of

service

that

apply

some

restrictions,

such

as

amonthly

cap.

21http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless200812.htm.

22Nielsen,CallMyCell:WirelessSubstitutionintheUnitedStates,September2008.

23Nielsen,CallMyCell:WirelessSubstitutionintheUnitedStates,September2008.

24MorganStanley,TelecomServicesCuttingtheCord:VoiceFirst,BroadbandCloseBehind.October1,2008.
http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless200812.htmhttp://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless200812.htm


11/24


ofgreater interesttopeopleunder25thananyotheragegroup.25Manyoftheseyoungerpeople

mayneverhaveanyinterestinawirelineconnection.

Anothermarket driver for spectrum consumption is fixedmobileconvergence (FMC), referring to

the ability to use mobile devices in a stationary (e.g., home) environment by connecting to local

accesspointseitherviaWiFiorvia licensedcommercialmobile radiospectrumusing femtocells.

Thereareavarietyofarchitecturalapproaches forprovidingFMC,but theneteffect isthatusers

will increasingly use their mobile devices in all environments and for all communications, thus

furtherstimulatingspectrumdemand.

3 QuantitativeAnalysisIncreased mobile broadband use such as from the proliferation of smartphones with a consumer

friendlyformfactor isalreadyhavinganoticeable impactonexistingnetworks.YankeeGrouprecently

stated, Few operators today are capacity challenged but they anticipate they will be, and some

operatorsanticipatethiswithurgency.26

Thereareavarietyofofmetricsavailabletosubstantiatetheincreasingamountsofdataandspectrum

thatwirelessapplicationsareconsuming.Suchananalysisprovidesinsightintothecapacityandlimitsof

todaysnetworksandavailablespectrum.

Sincewirelessoperatorsdonotdisclosethepreciseamountoftrafficandloadingontheirnetworks,this

section uses a variety of other information to assess the demand being placed on spectrum. This

includesthegeneralgrowthofInternetProtocol(IP)traffic,currentandprojectedmobiledatagrowth,

andthecapacityofwirelessnetworksrelativetoapplicationandsubscriberdemands.

3.1 GrowthinIPTrafficThere

is

tremendous

growth

in

the

overall

amount

of

global

Internet

Protocol

(IP)

traffic.

Cisco

projects a doubling of IP traffic every two years through 2012.27 This growth will be through

combination of bandwidthintensive applications such as video distribution, and from general

Internet usage. With mobile Internet connectivity becoming the primary wireless application,

Internettrafficgrowthtranslatestomobilebroadbandtrafficgrowth,butatanevenfasterratedue

toarapidlygrowingbaseofusers.

3.2 CurrentMobileDataGrowthMobileoperatorsarealreadyexperiencingnotablevolumesofdatatrafficontheirnetworks.Some

examples of the current growth in mobile broadband data traffic follow. Ericsson, a leading 3G

25AlcatelLucent,EnrichingCommunications Magazine,NorthAmericaEnteringEraof IntegratedBusinessand

TechnologicalInnovation,http://www.alcatel lucent.com/enrich/v2i22008/article_c1a6.html?l=en.

26YankeeGroupWebcast,FindingaFemtoFuture,June26,2008.

27Cisco,ApproachingtheZettabyteEra,June16,2008.
http://www.alcatel-lucent.com/enrich/v2i22008/article_c1a6.html?l=enhttp://www.alcatel-lucent.com/enrich/v2i22008/article_c1a6.html?l=enhttp://www.alcatel-lucent.com/enrich/v2i22008/article_c1a6.html?l=enhttp://www.alcatel-lucent.com/enrich/v2i22008/article_c1a6.html?l=en


12/24


infrastructure vendor, indicates that data traffic is already three times voice traffic on UMTS

networkstheyhavemeasuredwiththeprevious12monthsexperiencingmorethanadoublingof

data traffic.28 Ofcom, the independent regulator and competition authority for the UKs

communications industries, provides data on two European operators in a recent report showing

thatdata trafficonH3Gsnetworkgrewbya factorofseven inasixmonthperiodendingMarch

2008,and

that

Vodafone

is

experiencing

similar

growth

with

data

traffic

exceeding

voice

traffic.29

Theseexamplesdemonstratethe rapidgrowth inmobilebroadband trafficalreadyoccurring.The

nextsectionlooksathowsuchgrowthwillcontinueintothefuture.

3.3 ProjectedMobileDataGrowthAT&Tprojects(againstabaselineof2Gdatatrafficin2007)thatby20183G/4Gtrafficwillexpand

byafactorof250 (conservativeestimate)to600(aggressiveestimate).30 Incontrast,AT&Tshows

voicetraffictriplingduringthatsameperiod. Inotherwords,datatrafficwillgrowatarateabout

onehundred timesgreater thanvoice trafficover thenext tenyears.ACAGR (CompoundAnnual

Growth Rate) analysisof the AT&T figures showsbetween 130 and 170% CAGR of data between

2007and

2010,

and

between

65%

and

80%

CAGR

between

2007

and

2018.

Cisco

projects

125%

CAGRgrowth inmobilebroadbandtrafficthrough2012.31The importanceofthesegrowthrates is

thatitisunlikelythatoperatorswillbeabletodeliversatisfactoryserviceinthefutureatthesehigh

trafficvolumesusingexistingspectrum.

The following figure shows the Cisco projections of global mobile broadband traffic measured in

petabytes(milliongigabytes)permonth.32

28Ericsson,NorthAmericanInvestorRelationsForum,BostonAugust14,2008.

29FinalreportforOfcom,AssessmentoftheUKMobileSector,AnalysisMason,28August,2008.

30HSPA:KeystoaSuccessfulBroadbandAccessStrategy,TomKeathley,VPRadioAccess&Standards,AT&T.HSPA

Workshop,MobileWorldCongress,http://www.3gamericas.org/English/Events/hspaworkshop.cfm.

31Cisco,ApproachingtheZettabyteEra,June16,2008.

32CiscoshowstheUSaccountingfor43%ofglobalIPtraffic.
http://www.3gamericas.org/English/Events/hspaworkshop.cfmhttp://www.3gamericas.org/English/Events/hspaworkshop.cfm


13/24

Figure2:CiscoMobileBroadbandProjection(petabytespermonth)

0

200

400

600

800

1000

1200

1400

1600

2005 2006 2007 2008 2009 2010 2011 2012 2013

Between 2008and 2012, the Cisco projections indicate mobile broadband IP traffic growing by a

factorof23.

3.4 CapacityofWirelessNetworksRelativetoApplicationDemandTo lookatthe impactofdataapplicationsonwirelessnetworks,onemustconsidertheamountof

bandwidthavailableandtheamountofspectrumconsumedbyapplications.Thisallowsonetosee

howmanypeopleusingwhichapplicationscurrentnetworkcapacitycansupportandhowcurrent

capacitywillneedtobeaugmentedinthefuture.

First,there

is

the

question

of

how

to

equate

capacity

with

spectrum.

This

requires

an

understanding

of spectralefficiency, which is the throughput measured in bitsper second (bps) thatacoverage

areacansupportonanaggregatebasisrelativetotheamountofspectrumused,measuredinHertz

(Hz). In other words, determining spectral efficiency tells us the total bandwidth of the network

relativetotheamountofspectrumused.

Todays wireless technologies have a spectral efficiency close to 0.75 bps/Hz (after network

overhead)forthedownlink.Therefore,1MHzofspectruminacellsector33canprovide,onaverage,

0.75 Mbps of total aggregated data throughput for all the users in the coverage area. Future

technologiessuchasLongTermEvolution(LTE)areexpectedtohavespectralefficiencyclosertoa

valueof1.5.ThesespectralefficiencyvaluesarebasedonworkthatRysavyResearchhasperformed

with3GAmericasandrepresentaconsensusviewofmultipleoperatorsandvendors.34

33Cellsitestypicallyaredividedintothreesectors.

34 Rysavy Research, EDGE, HSPA, LTE Broadband Innovation, published by 3G Americas, September 2008.

Uplinkstypicallyhaveabouthalftheefficiencyofdownlinks.



14/24


Thecapacityofawirelessnetworkinanygivenlocationthusdependsonthespectralefficiency,as

wellastheamountofspectrumtheoperatorhasavailable.

Thefollowingtableillustratessomeofthesectorthroughputsbasedonavailablebandwidth.

Table2:AvailableSectorThroughputsBasedonBandwidthandTechnology

Technology BandwidthAssumption SpectralEfficiency DownlinkSector

Throughput

EVDO Oneradiocarrierof1.25MHz 0.75 0.94Mbps

UMTS/HSPA Assumesentire5MHzradio

channelusedfordata

0.75 3.75Mbps

WiMAX 2/3of10MHz(timedivision

duplex)radiochannelallocated

fordownlink

1.0 6.7Mbps

LTE

10MHz

radio

channel

all

availablefordata

1.5

15Mbps

Thesesectorthroughputorcapacityvalues,however,arenot fixed.Operatorscanaugmentthese

capacity amounts by deploying additional spectrum and adding radio channels assuming the

operatorhasaccesstoadditionalspectrum.Forexample,ifaCDMAoperatorhadtwoEVDOradio

channels deployed in a particular coverage area, then the sector capacity would double. As for

actualuserthroughputs,EVDOoperatorssuchasVerizon indicatetypicalthroughputratesof600

kbps (thousandsofbitspersecond)to1.4Mbps (millionsofbitspersecond)andHSPAoperators

suchas

AT&T

state

700

kbps

to

1.7

Mbps.

Actual

throughput

rates

depend

largely

on

signal

quality

andnetworkloadinginaparticulargeographicarea.Asthenumberofactiveusersonthenetwork

increases inaspecificarea,particularlydatausers,throughputsforeveryonedecrease.Essentially,

the capacity of a cell is divided among all active users accessing that cell. A cell will become

saturatedatsomepoint,andtheresultwillbeslowanderraticservice.

Giventhephysicalrealityjustexplained,mobilenetworkoperatorsareimplementingorconsidering

various mechanisms to manage bandwidth usage in the absence of access to more licensed

spectrum. Efforts may include instituting monthly usage caps, encouraging offpeak usage, and

othernetworkmanagementtools.Ifconsumersperceiveanoperatorsmanagementtechniquesas

being

too

restrictive,

however,

the

value

of

the

service

diminishes.

This

could,

in

turn,

reverse

the

consumerdemand trendsummarizedabove,whichwill thenarrest theoperatorsefforts tokeep

enhancingnetworkcapacityandcapabilitytostayaheadofconsumerdemand.

To see how much usage these capacity values can sustain, one can examine the throughputs

requiredfordifferentapplications,asshowninthefollowingtable:


15/24


Table3:ApplicationBandwidthRequirements

Application Bandwidth

Mobile voice call 6 kbps to 12 kbps

Low-quality music stream 28.8 kbps

Medium-quality music stream 128 kbps

High-quality music stream 300 kbps

Video conferencing 384 kbps to 3 MbpsEntry-level, high-speed Internet 1 Mbps

Internet streaming video 1 Mbps

Telecommuting 1 to 5 MbpsGaming 1 to 10 MbpsEnterprise applications 1 to 10 MbpsStandard definition TV 2 MbpsDistance learning 3 MbpsBasic, high-speed Internet 5 MbpsHigh-Definition TV 7.5 to 9 Mbps

Multimedia Web interaction 10 MbpsEnhanced, high-speed Internet 10 to 50 Mbps

Eventhoughnotallsubscribersofanetworkareactiveatthesametime,itisquiteclearthatseveral

userswithin

the

same

cell

sector

engaging

simultaneously

in

high

throughput

applications

(e.g.,

videostreaming)canquicklystrainthenetwork impactingtheuserexperienceforeveryconsumer

accessingthenetwork,even iftheyarenotthemselvesengaging inbandwidthintensiveactivities.

RysavyResearchhasconfirmedthisinactualtestsinwhichfoursimultaneoususersona3Gnetwork

in the same location resulted in decreased throughput speeds of less than60% compared to the

unloadedcase.35Mobileapplicationssuchasmoviedownloadsandvideostreamingarebecoming

more popular and have the potential to consume available capacity in todays mobile networks.

Videoconsumesmorebandwidththanalmostanyotherapplication.AspeopleaccesstheInternet

todownloadmoviesandothervideoentertainment,theamountofdataconsumedbymobilevideo

will balloon, because consumers will not settle for accessing video only through their wireline

connections.They

will

expect

and

demand

that

such

content

be

accessible

through

their

mobile

broadbandconnections.

35RysavyResearchWirelessNetworkAssessment,2006,

http://www.rysavy.com/Articles/Rysavy_Wireless_Performance.pdf.
http://www.rysavy.com/Articles/Rysavy_Wireless_Performance.pdfhttp://www.rysavy.com/Articles/Rysavy_Wireless_Performance.pdf


16/24


Giventhefinitecapacitylimitsexplainedabove,manyapplicationdevelopershaveemployedhighly

efficient wireless application architectures often implemented via mobile middleware, as well as

through highly compressed data objects. These approaches have helped mitigate the bandwidth

consumptionofcertainpopularmobileapplicationswhilealso improvingapplicationperformance.

But application optimization alone will not resolve the bandwidth needs to support continuing

escalatingdemand.

3.5 MonthlyUsageAnalysisThe second approach this report uses to examine spectrum demand is by examining the total

monthlyusageoftypicalapplications.

Toestimate themonthlyconsumptionofdifferent typesofapplications,onemustmakeacertain

numberofassumptionsaboutusage.Someestimatesareasfollows:

EMail. Email volume depends heavily on how many attachments a user downloads.Assuming500messagespermonthof10Kbytes,and50ofthesewith1Mbyteattachments,

thisrepresents

arelatively

modest

55

Mbytes

per

month.

Note

that

handheld

devices

such

asRIMBlackBerryarehighlyoptimized intheirnetworkcommunicationsandconsume far

lessdata.36

WebBrowsing.Theamountofdatacanvaryconsiderably,but forauserbrowsingtypicalgraphical/pictorial content and not viewing video, 10 Mbytes/hour is a reasonably

representativevalue.37Twentyhourspermonthisonly200Mbytes/month,stillarelatively

lowloadonthenetwork.

Internetradio.Internetradiostreamstodayoperateatratesofupto300kbpsconsuming135Mbytesofdataperhour.Twentyhourspermonthis2.7Gbytes/month.

Video.PopularvideostreamingapplicationssuchasFlashorMicrosoftSilverlightcurrentlyoperateatcloseto1Mbps38.Thisconsumes.45Gbytesperhour.Thisisalsocomparableto

downloading a onehour video from Apples iTunes store, which takes about .5 Gbytes.

Twenty hours per month at .45 Gbytes/hour is 9 Gbytes/month, significantly higher than

whatmostwirelessnetworkspermittoday.It is importanttonotethattherearearapidly

increasing number of videodownload and streaming services available to users such as

Amazon Unbox, Movielink, Netflix, MobiTV, Sling Media, Hulu, and shows from the TV

networks themselves. During the 2008 Olympics,NBChadmore contentavailablevia the

WebthanontheirmultipleTVchannels.

36RysavyResearch,WirelessEMailEfficiencyAssessment,April21,2008.

37RysavyResearchmeasurements.Assumessomenumberofdocumentsdownloaded.

38RysavyResearchmeasurements.


17/24

HD movie downloads. Todays highdefinition video requires at least 7.5 Mbps ofbandwidth,whichconsumerswatchedatarateof3.4Gbytesperhour.Justonetwohour

movie per week is 27 Gbytes/month, clearly a challenging application for todays mobile

broadbandnetworks.

The following graph shows the application examplesjust listed. The video applications already

exceedthemonthlylimitsthatmanywirelessoperatorsimposeontheirsubscribers.

Figure3:TypicalConsumptionofApplicationsOverOneMonthPeriod(Megabytes)

0

5000

10000

15000

20000

25000

30000

Email WebBrowsing InternetRadio Vide o

Streaming

HDMovies

While todays mobile networks have sufficient capacity to address current active subscribers and

current usage behavior, emerging multimedia applications will impose significant additional

bandwidthdemands.

The

amount

of

data

that

these

applications

can

consume

is

likely

to

exceed

the

capacityofmanyexistingmobilenetworksonceusagebecomeswidespread.

Somemayarguethatsmallerformfactordeviceslikehandheldswillnotconsumeasmuchdataas

largerdevices.Forexample,ascreenonaphonedoesnotrequireashighabitrateforvideoasa

laptop screen, which similarly does not require the bit rate of a large TV. While this is true,

innovativeapplicationssuchastherecentlyavailableGoogleEarthfortheiPhonecanstillsendlarge

amounts of data to small devices. In addition, resolution of displays on handheld devices is

continuing to increase, and many devices themselves are becoming larger with new device

categoriessuchasMobile InternetDevicesbeingcreated.Thesmaller form factorwill thusnot

alleviatethe

expected

demand

for

more

network

capacity.

Userswillalsoexpectsimilarexperiencesfrommobilebroadbandnetworksasfromfixednetworks,

and many willnot differentiatebetween themjustasusers today donotdistinguish betweenan

Ethernet connection or WiFi connection in terms of capability. Failure to satisfy consumer

expectations in this area could artificially depress demand for mobile broadband and, therefore,



18/24


reverse the trend of expanding the capacityandcapability of wirelessnetworks to stayahead of

demand.

3.6 CapacityofWirelessNetworksRelativetoAverageSubscriberUsageAnotherwayofanalyzingthecapacityofanetworkandthenumberofdatausers itcansupportis

throughan

analysis

of

the

average

throughput

per

subscriber.

This

differs

from

the

previous

sections

that examined instantaneous peak throughputs of different applications and their monthly

consumption.

Wireline broadband services have been available for quite some time, and trends in data

consumption are fairly well understood. Based on this information, wireline Internet service

providers (e.g., cable modem or DSL) design their networks to accommodate the total average

demand of their subscribers. These data consumption values apply directly to mobile broadband

networks as people in increasing numbers turn to mobile devices for Internet access. Siavash

Alamouti,CTO of the Mobile Wireless Group at Intel, states that the killer application for mobile

broadband

networks

such

as

WiMAX

is

anything

the

Internet

can

provide

today

and

possibly

more.39 In other words, the Internet is the application, so Internet consumption trends are

particularly relevant for understanding mobile broadband network demands. A Goldman Sachs

comment on smartphones concurs, The larger screen size and improved user interface of these

newdevicesarehelpingtomorecloselymatchtheuserexperienceinthewirelessworldwiththat

ofthewiredworld.40

A typical average throughputperInternet subscriber value used today is about 50 kbps per

subscriber.Forinstance,aNovember2007DOCSIS(DataoverCableServicesInterfaceSpecification)

analysis indicatedaverageusageof40kbpsdownstreamand20kbpsupstream.41A40kbpsvalue

may seem extremely low compared to the multimegabitpersecond throughputs available with

DOCSIS,but

this

value

takes

into

account

that

only

asubset

of

users

are

active

at

any

one

time

and,

of these, only some are communicating data at any moment in time. The average loadper

subscriberisthusanimportantnumberforpredictingthedemandonthetotalnetwork.

Theseaveragedemandvalueswillkeep rising forbothwirelineandwirelessnetworksas Internet

usagecontinuesto increase.DiscussinghowtoplanWiMAXnetworks,NokiaSiemensNetworks,a

wireless infrastructure vendor, projected in 2007 persubscriber, average throughput rates of 50

kbpsto100kbpswithinthreeyears.42

39MobileWiMAX:Vision&Evolution,http://www.ieeemobilewimax.org/downloads/Alamouti.pps.

40 The Goldman Sachs Group, Inc., Americas: Wireless Mobile Data 1.1 Recent Data Points Strengthen the

Theme,June2008.

41CommunicationsTechnology.November1,2007,DOCSISMigrationMethodology,FromAtoBto"3",BySaifur

Rahman,http://www.cable360.net/ct/operations/bestpractices/26403.html.

42http://www.telecomasia.net/article.php?type=article&id_article=4742&id_sector=16.
http://www.ieee-mobilewimax.org/downloads/Alamouti.ppshttp://www.ieee-mobilewimax.org/downloads/Alamouti.ppshttp://www.ieee-mobilewimax.org/downloads/Alamouti.ppshttp://www.cable360.net/ct/operations/bestpractices/26403.htmlhttp://www.telecomasia.net/article.php?type=article&id_article=4742&id_sector=16http://www.telecomasia.net/article.php?type=article&id_article=4742&id_sector=16http://www.cable360.net/ct/operations/bestpractices/26403.htmlhttp://www.ieee-mobilewimax.org/downloads/Alamouti.pps


19/24


One can apply the average demand value to mobile networks as follows. Assuming a 50 kbps

averagethroughputpersubscriber,andusingthepersectorcapacities inTable2,onecanreadily

seethattheHSPAcellsectorcouldsupportonly75subscribers(3.75Mbpsdividedby50kbps)and

theLTEcell sector could support300 subscribers (15Mbpsdividedby50kbps). In theUS today,

there are, on average, over 1,000 subscribers for the major operators per cell site or over 333

subscribersper

cell

sector.43

Clearly,

the

HSPA

cell,

with

one

radio

channel,

could

not

accommodate

all of its subscribers using data at current Internet levels. While today there are not a sufficient

numbersofmobilebroadbanduserstosoakupallavailablecapacity,Internettrends indicatethat

capacitywilleventuallybeconsumed.

There is another important consideration with respect to demand, namely peak geographic

demand. The previous discussion was based on average persubscriber demand but, in practice,

peaknetworkdemandsareoften localized (e.g.,Presidential Inauguralevents inWashington,DC,

large sporting events, roadtraffic situations, highdensity residential areas). Peak geographic

demandscanbesignificantlyhigherthanaveragedemands.Theindustryneedsenoughspectrumto

accommodate

both

average

demands,

as

well

as

peak

geographic

demands.

Therearethreewaysof increasingnetworkcapacity: increasedefficiency(e.g.,spectralefficiency)

ofnewwirelesstechnologies,morecellsitesanddeploymentofadditionalspectrum.

Operatorsemployallthreemethods.Theevolutionfromanalogtodigital,andnowto3Gandnext

generationsystems isoneof improvingspectralefficiency. Increasedspectralefficiency,however,

requires progressively more complex radio implementations and works best in lowmobility, low

noiseandlowinterferenceenvironments.Moreover,thereareboththeoreticalandpracticallimits

to spectral efficiency and current systems are approaching these limits.44 Improving spectral

efficiencyisanimportanttoolforcreatinggreaternetworkcapacity,butalonewillnotbesufficient

toaddressthemagnitudeoftheexpecteddemandformorebandwidth.

Increasingthenumberofcellsitescanalsodramatically increaseoverallnetworkcapacityandhas

beenthetooloperatorshaveusedmostfrequentlytoexpandcapacitysincetheinceptionofcellular

networks.Thewholebasisofcellular istoefficientlyreusespectrumand thesmaller thecell, the

greaterthecapacityperunitarea(e.g.,todayscellsitesareeasilyonetenththediameterofearly

sites).Operatorswillcertainly increasethenumberofcellsitestheydeploybut,aswithincreasing

spectralefficiency,sotootherearepracticallimitstowhatcanbeaccomplishedbyaddingcellsites.

Operatorsarealsodeployingpicocellstoaugmentcoverage,butthisonlyaddressescoverageand

capacityforverylocalizedareas.

43Basedonindustryestimatesofapproximately220,000cellsitesintheUS.Forexample,seePaulWeiss,Current

TelecomDevelopments,December5,2008.

44Foramoredetaileddiscussionofthespectralefficiencyofwirelesstechnologies,andevolutionofcapability,

refertotheRysavyResearchpaper,EDGE,HSPA,LTEBroadbandInnovation,September2008,

http://www.rysavy.com/Articles/2008_09_Broadband_Innovation.pdf.
http://www.rysavy.com/Articles/2008_09_Broadband_Innovation.pdfhttp://www.rysavy.com/Articles/2008_09_Broadband_Innovation.pdf


20/24

So,whilegreaterspectralefficiencyandmorecellsitesarecriticallyimportant,theyareunlikelyto

beabletoaddressincreasingcapacitydemandalone.Longterm,asshowninthefollowingfigure,it

willrequireacombinationofthesemethodsandtheadditionofspectruminorderforoperatorsto

growtheirnetworksandstayaheadofconsumerdemand.

Figure4:AddressingDemandThroughaCombinationofEfficiency,IncreasedSites,andAddition

ofSpectrum

4 OtherSpectrumConsiderationsThereare otherconsiderations that relate to spectrum for mobile broadband services.These are the

needs

of

advanced

technology,

maintaining

wireline/wireless

consistency,

spectrum

implications

of

new

wirelessarchitectures,andspectrumanalysisbyotherorganizations.

4.1 NeedsofAdvancedTechnologyNew wireless technologies such as dualcarrier HSPA, LTE, and WiMAX benefit from deployment

acrosswideradiochannelsdeliveringhigherpeakdataratesandmoreefficientuseofthespectrum.

Thesechannelsaresignificantlywiderthanthoseusedbyprevioustechnologies.Forexample,dual

carrier HSPA operates in 10 MHz (frequencydivision duplex), WiMAX currently in 10 MHz (time

division duplex), LTE in up to 20 MHz (FDD and TDD), and forthcoming technologies such as LTE

Advancedinupto40MHz(FDDandTDD)radiochannels.

Allocatingwider

channels

in

existing,

licensed

spectrum

bands

to

accommodate

new

technologies

while continuing to support legacy technologies is technically and operationally difficult, because

operators typically do not have large blocks of unused spectrum available across their coverage

areas. Deployment of new technologies will be greatly simplified if done through new, licensed

bands.ThisisverylikelythereasonoperatorssuchasVerizonhaveindicatedtheywilldeployLTEin



21/24


theirnewlyobtained700MHzband.Beyondcoexistence,manyexistingbandsaresimplynotwide

enoughtoaccommodatetheseforthcomingwirelesstechnologies.

Thespectrumneedsofemergingmobiletechnologieshavebeenaddressedbyorganizationssuchas

NextGenerationMobileNetworks (NGMN),whichstates:Fulldeploymentsofnextgenerationof

mobilenetworksrequire20MHzchannels.Morethan120MHzofharmonisedspectrumwouldbe

neededtoaccommodatecommonlyenvisageddeploymentscenarios(involvingparameterssuchas

number of channels, number of operators, and choice of FDD or TDD technology). NGMN also

states To reach the full potential of next generation mobile networks, larger channels (up to

approximately100MHz, inhigherfrequencybands)willbeneeded.45Further, itshouldbenoted

that the ITU is already developing requirements for nextgeneration systems that will include

operationinupto40MHzradiochannels,whichiswiderthanmanyexistingbands.46

4.2 ConsumerExpectationsAswirelinespeeds increase,userswillexpectcomparableexperienceswithmobilenetworks.Any

huge

discrepancy

will

hamper

adoption,

because

users

will

find

the

wireless

experience

unsatisfactory relative to wireline. For instance, if a user usually experiences a download time of

secondson awirelinenetwork for aWebpage,he or she isunlikely tobe satisfiedbydownload

timesof20secondsorgreateronawirelessnetwork.

Historically, there has been about a 10:1 difference in maximumthroughput speeds between

wirelineandwirelessservices,asshown inFigure5.Withpremiumconsumerwirelinespeedsnow

at50MbpsdownstreamthroughDOCSIS3.0andfibertothehome,enhanced3Gnetworksand4G

technologiesneedtobedeployedinsufficientlywideradiochannelsandwithsufficientcapacityto

offercomparableuserexperiences.

45 Spectrum Requirements for the Next Generation of Mobile Networks, NGMN White Paper on terrestrial

networks,June2007.

46 Requirements, evaluation criteria and submission templates for the development of IMTAdvanced, 2008

http://www.itu.int/ITUR/studygroups/docs/imtadvancedAtt7.2.doc.
http://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.dochttp://www.itu.int/ITU-R/study-groups/docs/imt-advanced-Att7.2.doc


22/24

Figure5:WirelineVersusWirelessDownlinkCapabilities(ActualUserThroughputs)

20102000 2005

100 kbps

10 kbps

1 Mbps

10 Mbps

100 Mbps

2G

40 kbps

Initial 3G

350 kbps

Current 3G

1 Mbps

3G+

5 Mbps

Pre 4G

10 Mbps

2G+

100 kbps

DSL/Cable

1 Mbps

DSL/Cable

3 to 5 Mbps

DSL/Cable

10 Mbps

Cable/Fiber

50 Mbps

Cable/Fiber

100 Mbps

4.3 NewWirelessArchitecturesandSpectrumImplicationsSomehavepointedtonewwirelessarchitecturessuchasfemtocellsandmobileTVbroadcastasa

meansofoffloadingthewideareanetworks.Whiletheseapproachesarequiteeffective,theyhave

limitations.Figure6showsthefemtocellconcept,namely,tohavetinybasestations(accesspoints)

locatedoncustomerpremises.Thisapproachallowsspectrumtobereusedatamuchhigherfactor

than the widearea network, effectively giving each subscriber the full bandwidth of the radio

channel.

Figure6:FemtoCellsforCapacityIncrease

Macro-Cell

Coverage

Femto-Cell

Coverage

Aggregate femto-cell

capacity far exceeds

macro-cell capacity

for same amount

of spectrum

Forapplicationssuchasmediatransfer,femtocellswillsignificantlyoffloadthewideareanetwork.

The femtocell architecture, however, assumes that a customer already has a wireline Internet

connection to provide the backhaul connectivity between the access point and the operator



23/24


network.Thus, femtocellsdonotwork if thegoal is formobilebroaband tobeanalternative to

wirelineconnectivity.Secondly, it isnotyetknownhowviable femtocellswillactuallybe,asthey

pose massive logistical problems in terms of spectrum management, interference (between

adjacentapartments,forexample),configurationandmanagement.Operatorstodaymanagetens

ofthousandsofcellsites,butthenumberoffemtosites,eachsimilartoacellsite infunctionality,

willnumber

in

the

millions.

Finally,whileusersmayacceptsomedegreeofenhancedcapabilitywhenincoverageoftheirfemto

cell,theywillexpect largelysimilarcapabilitieswhenusingthenetworkat large.Theneteffect is

some amount of yettobe determined capacity relief but, by themselves, femto cells are not an

alternativetoprovidingnecessaryspectrumformobilebroadbandnetworks.

Similarly,mobileTVprovidesameansofbroadcastingvideocontentsothateachuserreceivesthe

samesetofchannels.Thisismuchmoreefficientthanhavingadedicatedvideostreamtoeachuser.

Effective use of mobile TV will alleviate some network load for video content, but it is not an

alternative formanyvideoorientedapplicationssuchasYouTubethatdonotwork inabroadcast

model.

4.4 SpectrumAnalysisbyOtherOrganizationsThediscussionabovedoesnotseektoquantifyhowmuchspectrumwillbeneededbywhen;rather,

itseekstoshowthatcurrentmarketandtechnologytrendswillverylikelyresultintheexhaustionof

currently available spectrum. Other organizations, however, have studied the spectrum needs of

emerging wireless networks in depth. In particular, the International Telecommunications Union

(ITU) conducted a highly detailed analysis of spectrum needs as a basis for work on the IMT

Advanced Project. The ITU report, titled Estimated Spectrum Bandwidth Requirements for the

FutureDevelopmentofIMT2000andIMTAdvanced,47projectsatotalspectrumrequirementofas

muchas

840

MHz

by

2010,

1300

MHz

by

2015

and

1720

MHz

by

the

year

2020.

Even

at

alower

marketdevelopmentrate,theprojectionsare760MHzby2010,1300MHzby2015and1280MHz

by2020.

In the United States, only 194 MHz are currently available nationwide for CMRS use.48 However,

even when one considers the total theoretical amount of spectrum that has been allocated

specifically forCMRS (354MHz)49orthetotalamountof licensedspectrumtheoreticallyavailable

47ReportITURM.2078,http://www.itu.int/publ/RREPM.20782006/en.

48 Cellular, broadband PCS, and SMR currently in use. AWS1 spectrum is subject to clearing and relocation of

incumbentgovernmentusersand700MHzspectrumissubjecttotheDTVtransition.

49Comprisingthecellular,broadbandPCS,SMR,AWS1,and700MHzbands.
http://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/enhttp://www.itu.int/publ/R-REP-M.2078-2006/en


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for mobile services (approximately 680 MHz)50, that figure still falls well short of the spectrum

neededtosatisfyprojecteddemand.

The ITU report has been endorsed and referenced by the organization Next Generation Mobile

Networks, in their white report Spectrum Requirements for the Next Generation of Mobile

Networks,June2007,states,Therefore,sufficientnetworkcapacity isamusttosatisfytheend

userexpectationsintermsofservicequality,namelythroughputandlatency.

5 ConclusionWidespread use of mobile broadband technology will not only support a thriving industry, but it will

increaseoverallbroadbandpenetration,which showsa strongpositivecorrelationwith thecountrys

economicwelfare.Forexample,onestudydoneacrossmultiplecountriesshowsacorrelationinwhich

every1%increaseinbroadbandpenetrationcorrespondsto$2,000percapitahigherGDP.51

This report hasdemonstrated that the capacityof mobile networks based oncurrentlyallocatedand

available licensed spectrum is finite and exhaustible based on current and expected broadband and

Internetusageandinnovationtrends.

There are a number of market factors that are acting together to increase spectrum demand at an

acceleratingpace includingevermoremobile life andworkstyles,greaterdevicesophistication,new

bandwidthconsumingapplications,an increasingpercentageofmobileuserstakingadvantageofdata

applications,andongoingindustryinnovation.Furthermore,formobilebroadbandnetworkstoprovide

acrediblealternativeandcomplementtowirelinenetworks,theymustbeabletomaintainpacewith

respecttoperformanceandcapacity.Mobilebroadbandnetworkscanonlymeettheseneedswiththe

timelyadditionofnewspectrum.Giventhelongtimeframesinvolvedingoingfromplanningtoauctiontodeployment,asexperiencedwith theAWSand700MHzbands,planning fornewspectrumshould

beginas

soon

as

possible.

50 This figure includes 50 MHz of cellular spectrum, 24 MHz in the SMR bands, 120 MHz of broadband PCS

spectrum,90MHz intheAWS1band,70MHz in the700MHzbands,195MHz intheBRSandEBSbands,and

132.425MHzinofMSSATCspectrum.

51TrendsinAccessibilityofServicesandNetworks,P.Tournassoud,

http://www.alcatel lucent.com/enrich/v2i12008/article_c1a5.html.
http://www.alcatel-lucent.com/enrich/v2i12008/article_c1a5.htmlhttp://www.alcatel-lucent.com/enrich/v2i12008/article_c1a5.htmlhttp://www.alcatel-lucent.com/enrich/v2i12008/article_c1a5.htmlhttp://www.alcatel-lucent.com/enrich/v2i12008/article_c1a5.html

2008 12 rysavy spectrum demand

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