|Issue:||North America 2008|
|Topic:||3G and 4G – collaboration, not competition|
|Title:||Founder, Chairman & Executive Director|
|Organisation:||CDMA Development Group|
Perry LaForge is the Founder, Executive Director and Chairman of the CDMA Development Group (CDG), an association comprised of over 120 of the world’s leading wireless operators and manufacturers. Mr La Forge has led the development and worldwide commercialization of CDMA since the first proof of concept trials in 1988. He has over 24 years of experience working with high-technology companies including as Vice President and Partner of the international management-consulting firm of Pittiglio Rabin Todd and McGrath (PRTM). Mr La Forge has been a keynote speaker and moderated panels at conferences in over twenty countries and has worked with governments throughout the world to develop telecommunications policies. Mr La Forge is a frequent guest columnist for a number of publications and has appeared on CNN, CNBC, Chinese Television Network, Bloomberg Business News and Dow Jones. He is frequently quoted in publications, such as Forbes, Fortune, Reuters, The Wall Street Journal, Wireless Week, RCR and BusinessWeek. Mr La Forge has a Bachelor of Engineering Degree (magna cum laude) and a Masters of Business Degree (MBA) from the Amos Tuck School at Dartmouth College.
Demand for higher bandwidth services is driving both 3G and 4G mobile services. The leading 4G contenders are Ultra Mobile Broadband (UMB), Long Term Evolution (LTE) and Mobile WiMAX. The switch to 4G will take years to complete, but 4G will assist 3G survival by providing affordable backhaul for 3G services. Given the superior propagation and penetration of frequencies below 1GHz, fewer base stations and backhaul links are needed, so technology-neutral regulation of lower frequencies can facilitate lower-cost 4G expansion.
As cycles of innovation in wireless telecommunications have come and gone, operators once again find themselves at a crossroads in selecting the services and capabilities that will give them dominant market share well in the future. While the industry evaluates the technology options available to achieve this goal, two major truths emerge. First, a ‘one technology fits all’ or ‘one network fits all’ strategy no longer suffices in today’s competitive markets. Second, all things considered, wireless 3G CDMA technologies, such as CDMA2000® and UMTS/HSPA, will satisfy the demand for most mobile services, while OFDM (orthogonal frequency-division multiplexing) based network overlays will supplement these networks to provide additional broadband capacity and support broadcast and backhaul services. Under most circumstances, 3G networks and wider-bandwidth OFDM-based technologies, commonly referred to as ‘4G’,work hand-in-hand just like 3G, mobile broadcast and WiFi technologies do today. CDMA2000’s evolution path will continue to provide operators with more capabilities than competing technologies, ¬and OFDM-based solutions will complement 3G to enhance its power for years to come. 3G today When examining today’s wireless, one can’t deny that most mobile voice and data services are covered. Most consumers only use their phones for talking and sending short messages. However, a growing number of people are using their mobile phones more often for Web browsing, email, games, music and video downloads, occasional location-based services, and snapping-and-sending photographs or videos at the spur of the moment. Current 3G digital networks, and their evolutionary upgrades in existing spectrum, will continue to carry the load for these wireless voice and data services well into the future. Complementary mobile broadcast networks, such as DVB-H, MFLO, ISDB-T and DMB-T/S, will handle mobile television broadcasts – the most bandwidth-intensive service known today – and 802.11/a/b/g/n will handle the demand for wireless Internet access in hotspots. From an enterprise perspective, things are a bit more demanding due to the need for heavier network utilization, but 3G is still more than capable of handling this increasing demand. Wireless email – the most common enterprise application – continues to proliferate via smartphones and Blackberry devices, and pushing email with attachments to a user’s palm is easily handled by current 3G broadband data networks. Meanwhile, EV-DO Revision A (Rev. A) PC cards and embedded modules have enabled laptops to send and receive email with large attachments, and access the Internet and corporate Intranet most anywhere at speeds comparable to DSL and WiFi, making the concept of the full-featured mobile office a reality. So what is 4G and what kind of applications and services will it enable in the future? 4G terminology While the term 4G has yet to be defined, it will most likely be an enhanced version of OFDM-based systems such as Ultra Mobile Broadband (UMB), Long Term Evolution (LTE) or Mobile WiMAX (802.16m). All will support multi-megabit-per-second data delivery to users, carrier-grade VoIP and other real-time and broadband-intensive applications and satisfying customers. These broader bandwidth pipes will be used to support consumer-oriented applications such as mobile TV, streaming video and other bandwidth-hungry applications such as uploading user-generated content and see what I see (SWIS) services. For businesses, most of the excitement will be about having immediate and unlimited access to virtual private networks, and large corporate files and databases while on the move, as well as other productivity-enhancing applications such as video conferencing. The future of 3G It is logical to assume that 4G will immediately replace 3G. However, not all operators will have access to bandwidths greater than ten MHz suitable for OFDM-based technologies; for those that do, it will take time for them to provide ubiquitous coverage, affordable handsets and global roaming; and their low-tariff (depreciated) circuit-switched voice networks won’t disappear overnight. Therefore, a collaborative environment will persist, rather than fierce competition and cannibalization. The capacity of 3G CDMA broadband networks will be more than sufficient to deliver most voice and broadband data services, and will continue to be the leading and most economical platforms to deliver mobile communications for the foreseeable future. Yet, for those operators that require greater amounts of bandwidth especially in high-traffic areas, OFDM-based technologies offer certain economic benefits and will enable them to complement their 3G services, features and coverage. Like any new technology, next-generation OFDM-based technologies will take longer than expected to become commercially viable. Mature OFDM-based solutions will be built-out over time as the demand for broadband services grows and spectrum becomes available. These solutions will complement 3G by providing large amounts of bandwidth for backhaul, broadcast and broadband applications in ‘hot-zones’. Mass adoption of these wide-bandwidth OFDM-based solutions will take years, as coverage is expanded and economies of scale are built. Meanwhile, with its significant market momentum and large economies of scale, 3G will continue to play a key role in the future of the wireless industry. Despite this outlook, some incumbent operators and new service providers are considering the purchase of additional spectrum and deployment of OFDM-based systems. Regardless of the operator’s approach to 4G or its existing technology roadmap, no single network will address all of an operator’s service demands 100 per cent of the time. Recognizing this, CDMA operators are positioning themselves to take advantage of OFDM-based technologies sooner and more cost-effectively. As demonstrated by Sprint Nextel and Verizon Wireless, there is no need to purchase a GSM or UMTS network to overlay an OFDM network. Migrating In-band and the case for lower frequencies When considering the merits of 3G and 4G technologies, a key factor is the spectrum allocation and frequency bandwidth being utilised. For narrow band deployments, CDMA technologies can achieve some of the highest data throughputs possible, while OFDM-based technologies can offer cost efficiencies within wider radio channels – namely clear and contiguous bandwidths equal to or greater than ten MHz. With wider radio channels, OFDM-based technologies, such as UMB, LTE and Mobile WiMAX, have emerged as viable options to deliver the next generation of mobile broadband services, including applications such as multicasting, where economically feasible. For next generation mobile broadband networks to be economically feasible may require leveraging the improved propagation characteristics of lower frequency assignments (e.g., below 1 GHz). Lower frequencies provide greater coverage, thus requiring less cell sites and fewer backhaul connections – leading to lower deployment and operating costs, or total cost of ownership (TCO). In the future, deploying fewer cell sites will become increasingly important when you consider current 3G broadband cell sites are already using between four to ten E-1 backhaul connections to support peak data rates up to 7.2 Mbps. When data rates increase beyond 30 Mbps, the bandwidth requirement or cost (lease) of each backhaul will increase dramatically. Since its inception, the CDMA2000 migration path has sought to maximize performance and minimize costs by sustaining an evolutionary path that eliminates the need for expensive ‘forklift’ upgrades or building a completely new network. CDMA2000 1X, EV-DO Release 0 (Rel. 0) and EV-DO Rev. A – all ITU-approved IMT-2000 3G technologies – are designed to operate in a single 1.25 MHz channel and allow operators a smooth upgrade to deliver higher performing and more affordable services by incrementally adding channels only as necessary when demand increases. This commitment has resulted in a higher degree of backwards compatibility between new and legacy technologies within a CDMA2000 network, which in turn leads to a faster time-to-market, lower capital and operating expenditures, and the preservation of existing investments. Also, due to its economies of scale, CDMA2000 will retain a significant cost advantage over OFDM-based technologies when it comes to handset pricing. Analysts forecast that by 2010, there will be 548 million mobile broadband users worldwide, and 94 per cent of them will be using iterations of Evolution-Data Optimized (EV-DO) and HSPA, which will eclipse all alternative broadband technologies. Entry level CDMA2000 handsets already cost less than US$30 in many developing markets, and will continue to drop in price – making it difficult for newer multi-mode (CDMA/ OFDM) handsets to gain market share based solely on price. 3G, 4G or Both? To some extent, the relationship between 3G and 4G networks is very similar to the relationship between 3G and WiFi. Just as WiFi complements 3G in ‘hotspots’, mobile OFDM technologies will complement 3G by providing large amounts of bandwidth for backhaul connectivity, multimedia broadcasting and delivering broadband-intensive applications to ‘hot zones’. Yet, deploying an OFDM-based network will depend upon each operator’s unique circumstances, including market opportunities, assigned licenses, available spectrum, previous technology selections, vendor relationships and propensity for risk. In other words, service providers will choose the path and technologies that best meet their market and economic requirements. The decision to deploy an OFDM system ultimately will be determined by a business case, which in turn will depend on the availability of revenue-generating applications and affordable devices, the market demand for bandwidth-intensive applications and the economic benefits they offer to the operator. The industry has yet to develop a clear business model for wider-bandwidth OFDM-based services, and as the experience with 3G demonstrates, it will take time for a sustainable business model to evolve. Thus, the timing of the mass market adoption of these solutions remains uncertain. Meanwhile, 3G will continue to work hand-in-hand with OFDM-based technologies and remain the core network technology for hundreds of carriers until well past the year 2020.