Accelerating 4G

Months ago, I conjectured that given the growth 4G technology and slow customer adoption of 3G, India may jump to 4G sooner. While Indian operators are slowly ramping up their 4G network deployment, 4G is not likely to see strong growth before 2014. But showing all signs that 4G is gaining strength faster, Verizon reported that they are banking on 4G data growth to fuel their revenue growth in a saturated subscriber-base of US.
In its recently published report, Verizon said that almost 50% of its all present data traffic is on its 4G LTE services, covering more than 260 million Americans. Verizon also said that it now had a total of 21.6 million LTE-enabled devices on its network, a rise of 23.3% on last year.
That shows clear sign of 4G acceleration. However it does not tell us whether that growth is happening at the cost of Wi-Fi or CDMA/3G. In US, Wi-Fi is more ubiquitous compared to other developed countries. So data growth could be at the expense of CDMA/3G or it could be simply complementing Wi-Fi hotspots. However from its report, it appears that Verizon is converting its CDMA data connections to LTE. Verizon may start supporting voLTE this year. That would initiate complete switchover to 4G for its subscribers. AT&T and Sprint are not too far behind. Both have already started 4G data service and fast expanding 4G coverage in more US cities [ source: techradar].
Europe's scenario is little complex with each country at different phase of 3G/4G adoption. Telecoms.com lists plan from various networks in Europe for launching 4G service. Europe's recessive economic condiiton has slowed down 4G adoption a little. The question whether it is more profitable to continue with 3G or it makes better economic sense to transition to 4G, is going to linger with European operators this year.  A recent study from Arthur D. Little and BNP Paribas seems to warn that European operators with present inclination to keep 3G and LTE data tariff same, may not see growth in next 3 years. Now if the operators increase LTE tariff, it is bound to have a slow-down on overall adoption rate of LTE in Europe. Since Economics always has the upper hand, European operators may focus on near-term profitability and instead of committing a full-scale overhaul from 3G to 4G, they most likely will take a staggered approach.
 Japan on the other hand has traditionally been first-adopter in wireless telecom space. DoCoMo launched its 3G network in Japan when 3GPP were still debating about the 3G standard. In fact 3G proliferated lot faster in Japan compared to any other developed country. So to understand whether 4G is really being considered as replacement for 3G, we need to look at Japan. 
In a clear signal that Japan may transition to 4G sooner than anticipated, CN reports that 
 • Japan’s total mobile infrastructure (2G, 3G, 4G) market surged 78% in 2012, to $3.9 billion, owing to a strong LTE push fueled by NTT DOCOMO, KDDI, and SoftBank Mobile and
• 3G declined 11% in Japan in 2012

"LTE revenue in Japan soared 188% and will keep its momentum this year, driven by accelerated rollouts and the increasing willingness of service providers to shut down 3G,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

ABIresearch, another reputed research firm, projected LTE data traffic to grow by 200% this year. "4G LTE traffic is accelerating, with a growth rate of 207% in 2013 compared to 99% for 3G traffic.", it said. In India. Reliance announced yesterday that it received Govt''s permission to start testing of its LTE network including voLTE service.  And if one has to go by the local buzz, Airtel and Vodaphone are planning full voLTE launch by early next year.

So it looks like that US and Japan are going to see strong wireless data growth over LTE this year. Europe will see slow transition from 3G to 4G. China and India will most likely see comprehensive data and voice growth over LTE by early 2014.

India one step closer to pan-India 4G adoption

Reuter reports that Indian Government has taken a decision this Monday to allow all the wireless broadband airwave holders to support voice over 4G by paying a one time fee of $306 million. This will remove the last regulatory hurdle to deploy LTE as the technology for both data and voice. Three large players, Reliance, Vodaphone and Airtel are expected to go full-steam in this year with LTE. For voice however, technology is still in the catch-up mode. Ideally, with LTE, the bearer protocol for the voice was expected to be voice over LTE. But voice over LTE still has some distance to cross before the technology can mature to substitute existing circuit-switched voice service provided by GSM. This is a case where market is moving faster than the technology.  For countries like India, who do not have large technology R&D investment in LTE or 3G wireless, market driving technology is in fact a boon. India does not need to follow a particular country (e.g. USA) or a technology, it has the freedom and latitude to follow the best of the breed. Fact is although GSMA adopted voice over LTE as the bearer protocol service for LTE technology in 2010, world's first ever commercial deployment of voice over LTE happened only in last quarter of 2012 when SK Telecom of South Korea launched the service with Ericsson and LG as the technology partner in September, 2012 [news announcement].
Operators in US and Europe have been trying with alternatives to voice over LTE as an interim solution but none of them match the spectral efficiency that VoLTE can provide. Heavyreading article provides a good summary on the alternatives that operators are trying for providing voice service over LTE. I have pasted their summary table here for those who are hard-pressed for time.
 As one can imagine, lack of clear choice impacts not only the network readiness but the handsets too. Huawei spokesperson stated last year that the aim is to bring voLTE enabled handset by 2013. Operators definitely want a single IP-based voice delivery solution, for LTE, which can simultaneously deliver voice, video and data so that it becomes credible deterrent against existing VoIP service like Skype. So there is no doubt that all the handset manufacturers would focus their resources to bring out fully voLTE capable handsets but challenge of interworking with multiple evolving technologies can be a serious hurdle. The hurdle can be somewhat reduced if the handset manufacturers work together. For a service to function smoothly, handsets from different manufacturers must agree on a single common procedure for voice call transfer, or voice/video call switch or roaming service. Some of them are part of the standard, but many are design artefacts which handset manufacturers must settle between themselves. For the first generation voLTE smartphones [from LG or ZTE] call switch quality appear to be satisfatory but power consumption appear to be on higher side [source]. Fallout of all these is, we may have to wait till the end of 2013, to see fully functional voLTE handsets from leading handset manufacturers like Samsung, Nokia or Sony-Ericsson. Indian operators have another hurdle. Indian operators have adopted LTE-TDD, as opposed to LTE-FDD that European operators adopted, following China and other Asian countries [check my previous posts]. This may mean that Indian operators may have to depend on Huawei or ZTE to bring the first set of handsets for Indian LTE voice/video consumers.Incidentally Airtel last year launched LTE multimode based Huawei smartphone, in India, that actually use 3G CS fallback alternative for voice calls [first alternative in the table]. In other words they do not support VoLTE yet.
So what does all these mean to you? If you are a technology enthusiast looking forward to buy a 4G smartphone, it means that you perhaps would like to wait till the end of the year when voLTE enabled handsets will be launched. Otherwise you are quite likely to replace your handset with another 4G handset in 2014.

will India leapfrog to 4G directly?

All the recent news in the aftermath of cancellation of 122 2G licenses, India's wireless telecom segment looks a bit uncertain. At least two foreign operators publicly stated that they are exiting India. However if one looks carefully, there are more positives than the negatives. The verdict makes every stakeholder more careful and focused on the long term. Also DoT's Telecom spectrum handling is expected to be more transparent and consistent across. The fact that India's mobile population is growing and has much younger user-base, makes it more attractive to the operators compared to other markets. Also it appears that India's mobile users are getting more interested to use their mobile phone for internet access. That will eventually make mobile data traffic way higher that voice traffic which opens a multiple avenues for new revenue generation compared to plain voice traffic.
  As per the September, 2011 data from TRAI, India's mobile subscription base stands at 907 million and most of them are on the voice network. A large chunk of this userbase is expected to upgrade themselves to smartphones and are expected to generate more data traffic than voice.
With 2G network still growing in India and are expected to continue the trend for another year or so, India's challenge is to allow the 2G operator continue generating revenue while preparing the network for high speed wireless broadband.
In 2010, India had the first auction of Broadband Wireless Access spectrum. The 4G Auction carried on the back of 3G Auction saw 5 winners: Infotel (22), Qualcomm (4), Bharti (4), Tikona (5), Aircel (8) and Augere (1) excluding state-owned BSNL and MTNL. It is interesting to note that top 3 winners are new operators. More interesting aspect is that almost all of them signed up for LTE technology. Now LTE is the most dominant 4G technology with an adoption slowly encompassing the whole world, as per the latest report from GSA (Global Mobile Supplier Association).
For record, GSA report from January, 2012 tells that 285 operators globally are investing in LTE. And DailyWireless reported last year that all the 4G auction winners [barring state-owned operators] have chosen LTE-TDD as the technology.
It is particularly important to mention that China too has chosen the LTE-TDD as the technology for their 4G network. With World's two most populous nation picking LTE-TDD, it is quite apparent that LTE-TDD will enjoy the dominance across world.
What is LTE-TDD
LTE-TDD or Long Term Evolution - Time Division Duplexing [for unpaired bands] was standardized in 3GPP Release 8 as the fourth generation cellular wireless technology. While the back-end is all-IP nework [unlike 3G], LTE comes in two different Radio access variants: Time Division and Frequency Division. TDD variant is asymmetric [between uplink and downlink speed] and therefore promises higher spectral efficiency [i.e. more bits per frequency channel]. Since it uses single carrier frequency, it is also relatively simpler to deploy. Recent trials from Ericsson, Huawei and others claim to reach downlink data rate of 100 MBPS, making it ideal for IP-TV type of broadcast service. With dynamic asymmetric configuration the downlink rate can be  4-9 times faster than uplink rate making it adaptable for different types of data services.
The architecture is made such that an operator can have both TD and FD network helping immensely to retain CAPEX investment made in either of the technologies. 3GPP identified 30+ frequency bands so that spectrum availability does not become a constraint. It can interwork with 3G technologies which means migration from 3GPP is smooth. Since LTE can be deployed over older GSM/GPRS bands, it can also become the upgrade technology for 2G. However that will require complete overhauling of network infrastructure.
There is one chink though, 3GPP did not define the voice technology for LTE. To address the gap, GSMA adopted the GSMA voice over LTE initiative that tries to define VoIP service over 3GPP standardized IMS [IP Multimedia Service] although that service is not part of LTE standard.

Salient points about LTE-TDD

• Technical Standards part of 3GPP release 8
• High theoretical peak user rates of 170 / 54 Mbps (downlink/uplink, 20 MHz)
• Asymmetric uplink/downlink rates to match traffic types for good efficiency
• Peak spectral efficiency as good as competitive standards e.g. WiMAX
• Network infrastructure compatible with LTE-FDD
• Voice over LTE standard is being developed by GSMA
• emerging as the most dominant 4G technology as per the operator adoption is concerned

Migration Path

Migration path from 2G to 4G can be through 3G or bypassing 3G depending on how much the operator is invested in 3G and how many subscribers have adopted 3G. Given that India is lagging behind other countries in 3G adoption, it probably could leapfrog to 4G directly since in India 4G band is allocated far outside the GSM/GPRS band. It is interesting to note that both China and India have allotted the 2.3 GHz band [3GPP band 40] for LTE-TDD service. It would not only save the operator CapEx of 3G infrastructure, it also will be operationally simpler with 4G deployement requiring new model of handset.

Incidentally China Telecom is the first large provider to commit itself to LTE-TDD. In India TRAI is recommending LTE-TDD for femtocells. Femtocells are very small cells, with a diameter of few meters, recommended for wireless broadband access in urban areas.
It's still far by at least one and half years
While the commitment to the technology is quite strong and trials in different parts of the world are very promising, it also should be noted that commercial availability of this technology [both network and handset] is still one and half years farther making it all the more attractive choice for leapfrogging especially for those operators who have a very small 3G footprint. In the meantime, if you are buying a smartphone try not to spend a lot of money since you may need to replace it soon!
Further Updates
There was one aspect that I intentionally did not touch upon. India's Telecom Policy 2011 draft [to be published this April] did not mention about DoT approach on 4G. As if to answer that yesterday Mr. Kapil sibal announced that further auction for 4G is to happen this year. It is to be noted that BSNL has surrendered their 4G spectrum [that was allotted to them in 2010] to Govt. couple of months back. Govt. also can refarm unallotted 2G and 3G spectrum for 4G which means that there are enough spectrum available to launch 4G service.
Update from March, 6, 2012:
Govt. decided to refarm 700 MHz spectrum for 4G service, pooling up more spectrum for 4G auction.[ Report: http://www.thehindu.com/todays-paper/tp-business/article2965040.ece]

From independent standpoint, right approach should be that Govt allot unified licenses to the operators and auction spectrum without association specific generation of technologies and let the operators decide which band they want to use for 2G or for 4G. To protect 2G investment of new operators, Govt is very likely to continue bar roaming in 3G and 4G for next couple years but eventually all technologies will merge to 4G with unrestricted roaming across circles and technologies [i.e. 2G/3G/4G]. That will take some time but handset manufacturers also need some time to build truly multimode [2G,3G,4G] handset. In summary, India's cellular wireless segment is going to be exciting for at least next four years.