Hands up, those of you who thought the LTE (long term evolution) wireless communications standard was only applicable in the telephony environment.
While it’s true that is where it began its life, increasingly it’s finding key applications in areas far removed from that marketplace, as technology early adopters display an apparently insatiable appetite for data.
Uppermost among those application areas is automotive, where users want to employ high volumes of data while they’re out and about – and that mobility could be at considerable speed. Consider streaming video while on the move in a fast car. That’s asking a lot of a technology.
Evolution of the standard
The LTE standard has progressed greatly since it was first proposed in 2004 and finalised in 2008. Even at that point, the download speeds specified were far beyond those available with the second and third generation (2G and 3G) mobile technologies the specification was designed to replace. Indeed, they were way beyond the technical capabilities of the time.
LTE design was also based around the notion of packet switching, rather than the circuit-switched design of its predecessors – a clear indication of the progression from an essentially telecoms-based network to one optimised for data communications. Another key difference is in the wide range of frequencies specified for LTE – this time a clear indicator of the realisation of the potential for vastly increased volumes of traffic and network operators. LTE is efficient in its use of spectrum, enabling many more users to be used on each frequency band than its predecessors.
In 2008, the 3G technologies then in use were theoretically capable of providing a download speed of 14 Mbps. The first LTE specification set out a mobile download speed of around 100 Mbps. Compare that with current LTE Category 4 product offerings, which are now capable of providing download speeds of around 150 Mbps, and the Category 6 products on the near horizon that will offer download speeds of 300 Mbps.
The next generation, LTE Advanced, which will be a true 4G standard, has been specified, with mentions of download speeds in the region of 1 Gbps. The massive increase in download speed is a clear indication of how successful the initiative is proving. It also aims to take advantage of advanced mixed-topology heterogeneous networks in which a mixture of different sized radio or microwave cells are integrated and are optimised for power and for better handover between cells for users on the move.
Demand for data
Present-day users of communications systems are hungry for data. Video is particularly demanding in terms of its data requirements. In a recent survey of smartphone users, analyst IDC found that 54% of them stream video content and 27% of US users purchase videos on their smartphones. The comparable figure globally for the latter category is 23%.
In 2015, Vodafone said that video streaming accounted for 48% of its data traffic, while data usage itself grew by a massive 80% in comparison with the previous 12 months. The company says that typically when customers move from 3G to 4G, their data usage doubles. Only 13% of its European customers currently use 4G, so there is huge potential for growth, both in terms of a move to the technology itself and of data.
Investment and revenue
LTE service figures themselves speak volumes for the popularity of the technology. A report by SNS Research in 2015 estimated that LTE service revenues would be in the region of $170 billion in 2015, and will grow at a CAGR (compound annual growth rate) of 30% each year to 2020.
Figures from ReportsnReports in May last year put global LTE service revenue at some $500 billion by 2018, up from $78 billion in 2013 and showing a CAGR of 46% over this five year period. This firm of analysts expects that most (83%) of this revenue will be realised from North America, Western Europe and Asia Pacific, although it believes that there is considerable business potential in the underdeveloped markets of Africa and Asia. Ovum has released figures showing that the total number of subscriptions to LTE services topped 1 billion in the final quarter of 2015, with China accounting for by far the largest proportion of these.
Given that the LTE wireless interface is not backwards-compatible with 2G and 3G architectures, realisation of those revenues obviously means that service providers will have to invest heavily in infrastructure. SNS expects that expenditure on LTE infrastructure will account for nearly $33 billion by the end of 2020, while ReportsnReports’ estimate is that by 2018, total capital expenditure globally on LTE will have reached $180 billion.
Some players are not even attempting migration, but going straight for the new technology and infrastructure. In Pakistan, following a (very brief) period of trials, Warid Telecom began rolling out its LTE network in December 2014, moving directly from 2G to LTE technology, so with no fallback to 3G technologies. This is in direct contrast to the approach taken by earlier entrants to the marketplace, such as AT&T and Verizon in the US, whose networks offer direct fallback to 3G technologies where LTE coverage falters.
Bifurcation of the market
In a sense, Warid’s bold move highlights a split that is becoming evident in the LTE market as the technology rolls out and develops. Certainly many early adopters are keen to develop new service offerings as well as wanting – or demonstrating the ability – to use vast quantities of data. However, the picture is complicated by the growing existence and emergence of devices that have only a limited need to transmit small quantities of data intermittently.
These are devices that would operate happily over existing 2G and 3G infrastructures. However, while they have no need of the high bandwidth capability LTE offers, they will continue to be required to operate into the future, past the likely ‘sell-by’ date of current cellular technologies such as GSM, CDMA and UMTS. This means that they will need the promise of continuity from the backbone technology on which they rely, so as to ensure that they can keep operating.
LTE and IoT
These machine to machine (M2M) devices, which include smart meters, asset tracking systems and alarm panels, are typical of the growing category of devices that form part of the Internet of Things (IoT) which is widely expected to represent the future of computing. LTE is one of the strands that will help to enable this technology. For the main part, these IoT devices are static rather than mobile devices.
According to a press release issued by ITU (International Telecommunication Union, the United Nations specialised agency for information and communication technologies – ICT) and based on a report from ITU and Cisco, “machine-to-machine (M2M) information flows across networks will soon greatly outstrip human-generated digital information. ITU’s flagship regulatory report ‘Trends in Telecommunication Reform 2015’ identified M2M communications over mobile cellular networks as the fastest-growing ICT service in terms of traffic. ITU estimates that over one billion wireless IoT devices were shipped in 2015, up 60% from 2014.”
Figures put out by Machina Research in May 2015 and contained in a report from Nokia: ‘LTE-M – Optimising LTE for the Internet of Things’, say that of an estimated 30 billion connected devices that will be deployed by 2025, 7 billion of them will be cellular IoT (i.e. 2G, 3G and 4G technologies used for IoT but not specifically optimised for IoT) and low-power wide-area (LPWA) modules. The cellular network will therefore need to offer support and full coverage for a massive number of devices as well as a low cost of deployment, while the devices themselves will need to be low cost and offer long battery life.
Realising that there is a growing requirement for LTE to support low speed, machine optimised devices, the most recent releases of the standard –12 and 13 – specify support for lower power devices in the shape of Category M or MTC: LTE for machine type communications. The extension of the LTE standard enables these devices to share the spectrum and operate alongside the higher speed, higher power ones for which the standard was originally developed.
Although a variety of proprietary technologies for supporting IoT and low power devices are being developed and vying for market share, LTE-M would seem to offer a more straightforward route to supporting businesses as they develop, by enabling both low- and high-power devices to utilise the same backbone. For the moment, Category 1 (Cat. 1) chipsets, with a maximum throughput of 10 Mbps, are available and can be used on current LTE implementations with no need for a system upgrade.
They are filling the gap until the LTE backbones are upgraded to cater for Cat. 0 devices, with a maximum downlink speed of 1 Mbps and the ability to support power save mode (PSM). This allows devices to go into sleep mode for hours or weeks at a time, come to life, be ‘pinged’ for data – and then sleep again until their next ‘wake’ time is up.
Support for IoT devices will then really come into its own. Remotely connected devices will be able to operate for up to 10 years from one AA size battery, making this a highly cost-effective solution for companies needing to monitor locations on an occasional basis. This is where the volume in the marketplace will really be seen.
For more information contact Andrew Hutton, RF Design, +27 (0)21 555 8400, andrew@rfdesign.co.za, www.rfdesign.co.za
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