By Bob Wallace, Principal Engineer
The adoption and deployment of LTE is presenting challenges across all aspects of the mobile industry. On the technical front, carriers are making large capital investments to upgrade the infrastructure in their access networks in order to satisfy the subscriber’s demand for bandwidth. Likewise, upgrades to the core networks are also required to handle both the increased bearer traffic as well as the signaling traffic. But the change LTE is driving reaches far beyond the technical challenges.
LTE enables a different kind of mobile. Initial roll-outs are offering bandwidth that is comparable to fixed broadband access, and the technology offers a roadmap with continued bandwidth growth. The subscriber devices connecting to LTE networks also have much greater processing power, allowing the subscriber to effectively perform tasks previously reserved for desk-top devices. This combination of available bandwidth and the processing power to take advantage of it has the mobile world on the brink of an unprecedented transformation. Far more important than the technology introduced with LTE will be the emergence and development of entirely new usage models and business models.
During the initial roll-outs, carriers must rely on traditional services and business models to fund their investments. Virtually all of the traffic carried on initial LTE networks will be data, and existing data services are billed simply by volume of traffic. This means that even though subscribers are using more bandwidth for a greater variety of applications, the revenue returned from the increased bandwidth will grow at a reduced rate. The biggest challenge for carriers will be to develop new services and business models which allow them to capitalize on these new usage models, while in the interim focusing on minimization of cap-ex and op-ex.
Carriers are caught between these two opposing forces – subscriber demand for more mobile bandwidth and reduced “cost-per-byte” value of that bandwidth. There is more than enough demand (revenue) to justify the network infrastructure to carry the increased bandwidth, but there is not enough demand to justify multiple network infrastructures. In other words, carriers can’t afford to provide complete vertical solutions as they do today. On the low end, backhaul from the access nodes to the core network will be shared by multiple carriers. On the high end, individual carriers will not be able to keep pace with the rate of innovation demanded for application content and other services. In order to compete in this environment, carriers will need to open their networks – and their business philosophies.
Most carriers seem to be embracing one of four basic approaches to mobile data development and growth:
- Completely open networks. Flat rate data access, no caps, no traffic classification.
- Controlled access to networks. Even these carriers acknowledge there are going to be Over-The-Top (OTT) services that they can’t exert control over. However, there is an expectation that the carrier will partner with 3rd parties and enterprises to create Value-Added Services which are unique to their networks. Not quite the “walled garden”, but not really embracing fully open concepts either.
- Open access networks with a new set of Value-Added Services (VAS) through CoS/QoS, API’s for unique network information (presence, location, etc.), and other “smart pipe” features.
- Broadband service for unserved / underserved subscribers. These carriers are using the lower “greenfield” deployment costs of LTE wireless service to bring broadband access to rural users who do not have cost-effective fixed broadband access.
Depending on which of the above approaches a particular carrier has adopted, the degree of the impact LTE has on network architecture and security will be different. However, in all cases it is important to understand that LTE networks require a new approach. While past experience and philosophies won’t be abandoned, the differences in LTE networks reach beyond technical changes to the underlying usage and business models. As a result, value propositions for products and services that worked in the past may not work in the future.
Bob is a Principal Engineer at Tekelec, with a focus on core signaling systems architecture. He has more than 16 years of experience in the telecom industry, and more than 25 years in development engineering.