This article follows on from a previous article that reviewed LTE (Long Term Evolution, also know as 4G).  Several people asked why I had not included a fuller discussion on the 4G core in that article.  It is because LTE is an access technology; my focus of the article was on the access where there is a lot of hype at the moment.  However, to support LTE a new core is required, as specified by the SAE (System Architecture Evolution). 

In the standards community the names have now become E-UTRAN (Enhanced UMTS Terrestrial Radio Access Network) for LTE, and EPS (Evolved Packet System) for SAE.  Think of the SAE as a pure IP core without RNCs (Radio Network Controller) or SGSNs (Serving GPRS Support Node).  So in principle an operator would need to run two core networks to support the existing 3G network and the new 4G network.  Given the slight benefits of LTE compared to HSPA+, as discussed in a previous article, this would appear to be a significant barrier for LTE adoption.

However, the NEPs (Network Equipment Providers) are providing a range of solutions that enable the existing 3G core to evolve towards the SAE vision such as:

• One Tunnel, moving the SGSN into the control plane;
• Direct Tunnel, moving the SGSN and RNC into the control plane; and
  
• Internet HSPA: control-plane SGSN and RNC is integrated into the NodeB.

The 3GPP core market is roughly $1B in size, and the top three suppliers in this market are: Ericsson (34%), NSN (33%), Huawei (15%).  Who unsurprisingly are the three players behind the three different solutions that evolve the core towards the SAE vision.  Given we're likely to see the number of mobile broadband customers worldwide explode to over 1B over the next 4 years, mobile core costs could potential to explode as well.  Hence the immediate focus on moving the RNC and SGSN out of the data path and into the control plane, to better manage broadband growth.

Specifically the motivations for this early transition are:

• Lower cost/bit - depending on the architecture it has the potential to reduce equipment costs by 80%;
• Preparation for 4G - in other words avoid a dual core situation which would delay operators buying LTE BSRs (Base Station Routers).  Note the base stations are where NEPs make their money, so they're keen to remove any barriers; and
• Ease of integration of non-3GPP access (i.e. network convergence, avoiding multiple cores and service platforms).

Hopefully this sets out why we'll likely see the '4G core' happen before the '4G access.'

LTE (Long Term Evolution, also known as 4G) is entering the hype-cycle, and being rapidly pushed up to the 'peak of inflated expectations', just like IMS (IP Multimedia Subsystem), PTT (Push To Talk), FMC (Fixed Mobile Convergence), and far too many other technologies to name here.  So to cut through the hype and hopefully present a pragmatic view on the technology I thought it timely to make a few points, as I find I'm often repeating myself on this topic (I hope its not old age.)

A few pointers on what the technology can do:

• LTE will not greatly improve spectral efficiency compared with HSPA+ (High Speed Packet Access).  Within a 5MHz slot you could achieve perhaps 80 Mbit/s with HSPA+ (using MIMO (Multiple In Multiple Out) technology), compared to 100 Mbit/s with LTE. A 20% increase is unlikely to have customers demanding LTE.  The only tangible difference will be a slightly lower round-trip delay for LTE perhaps down to 10-20ms compared to perhaps 30-35ms with HSPA+, though with a flat IP core (moving RNC (Radio Network Controller) and SGSN (Serving GPRS Support Node) out of the data path) that could drop to about 20ms for HSPA+.
• LTE enables a higher peak data rates by using more bandwidth, scaling from 1.25 MHz (useful for the CDMA operators, hence Verizon's decision to adopt LTE) to 20 MHz and beyond.  LTE uses OFDM (Orthogonal Frequency Division Multiplexing), the same technology used in DSL (Digital Subscriber Loop), that is lots of little carriers, rather that one big one carrier as in HSPA, which gives LTE its flexibility.
• LTE can use FDD (Frequency Division Duplex) and unpaired TDD (Time Division Duplex) bands bought during the heady days of 3G spectrum auctions, where HSPA and GSM cannot operate in those bands
• LTE is a global standard, with a global frequency plan, hence can leverage global volumes, another reason behind Verizon's decision to adopt LTE, rather than pay an average $15 premium for its (CDMA) devices.  This is also the fundamental reason why the total cost of ownership of WiMAX networks will remain more expensive than LTE.
  
• HSPA has some funny technologies hidden away in it such as macro cell diversity, i.e. a terminal may use 2 or 3 cells at the same time. LTE does away with these complexities so does not need RNC nodes. LTE also has built in operational and maintenance capabilities, such as self-tuning to help control operational costs.
• By 2010 most GSM base stations in Western Europe will be over 20 years old. Most were put in during the "cheap-energy days."  Today, finally, green credentials matter to companies so LTE will enable the power consumption of mobile operators RANs (Radio Access Network) in the long run to be reduced by up to 50%.

A few pointers on the market's development:

• DoCoMo and Verizon are in unique positions that force a move to LTE faster than the rest of the market, so by 2010 they will likely be deploying LTE, and will be the first movers.
• Most in the GSM community will be working through HSPA+, which will significantly delay their need to move to LTE.
• The Flat IP core I referred to previously is a way of leapfrogging to the SAE (System Architecture Evolution), which can be thought of as the 4G Core, while LTE is the 4G RAN.  With the core upgraded, and a relatively fast RAN in HSPA+, most operators are only going to deploy LTE based upon operation needs.  Hence you'll likely see LTE being deployed more broadly in the market around 2013.
• And of course the good old chestnut of handset availability.  This is actually likely to be less of an issue compared to say 3G as most of the customers using LTE will be using a laptop with a USB fob.  Just remember to bring a spare laptop battery when you use LTE!
  

A mobile broadband Tipping Point has been reached: HSPA (High Speed Packet Access) is 'good enough' for customers and prices have fallen by a factor of 16 in less than two years.  Three UK (H3G UK) now offers mobile broadband prepay, 10 GBP ($20) buys up to either 1GB or 1 month of access, and its prepay so for regular travelers are no longer subjected to the extortionate 15 GBP ($30) per night internet access charges at UK hotels.  Specifically on the 'factor of 16' data point using Three UK as an example, in '06 the price per MB was 8p/MB, it is now 0.5p/MB (contract package 15 GBP per month for 3GB).  Mobile broadband is growing faster than any previous service, including voice.  Operators are talking about annual subscriber growth rates of over 400%, in one case 100% per month!  It reminds me of the good old 'mobile-gold-rush' days in the '90s, and aren't we supposed to be in a recession?  Mobile Broadband is generally a USB HSPA modem connected to a laptop.

However, the problem is this has happened at the same time as two other trends:

• The internet has gone 'video,' so data traffic is growing exponentially on these broadband ISPs; and
• Computing has gone personal; laptop penetration in some countries is close to 40%.  As data points: the Asus Eee laptop costs between $300-$400, and there will be roughly 40 million laptops sold this year in both the US and Western Europe.

In the UK, the BBC iPlayer is causing fixed broadband ISPs (Internet Service Provider) to complain, customers are now regularly consuming multiple GB per month through their ISP, most of it watching video.  Also new internet-connected HD (High Definition) devices such as the Sony PS3 provide access to games demos and video trailers (all available for free to the customer) where one demo often requires >1GB of data.  The fixed broadband ISPs are now revisiting their network economics.  

For Mobile Operators they the advantage at the moment that customers do not yet expect 'unlimited' mobile broadband access, so the 1, 3 and 7GB limits are not yet a significant deterrent.  However, even with such limits and customers now more readily filling those limits, hence mobile operators must change their network economics from 1c per MB to 0.1 c per MB.  Note, a typical smart phone uses about only 10MB of data per month on average, so laptop access has the potential to increase usage per device by a factor of 100!   The average mobile data bit rate per subscriber was about 10 kbit/s per session, a fixed broadband ISP's average was 25 kbit/s ('07).  Fixed broadand ISPs are estimating their average rate will grow to 70 kbit/s by (2010 or 2011).  The driver as mentioned before is video consumption over HTTP, iPlayer (P2P video), P2P (Peer to Peer protocol) sharing, Sony PS3 downloads, etc.

This tipping point creates a number of opportunities.

On the services side:

• The Mobile web is not just about smart-phones; it's about mobile laptops.  The web is not just about desktop PC access, it's about mobile laptop access.  The use cases are different, hence the opportunities.
  
• With Bluetooth coming as standard in most laptops sold in Western Europe the opportunities for VoIP bypass are significant.  But it will be interesting to see what substitution really takes place.  It can not replace my mobile phone, but it could help save me a few dollars for expensive international calls when I'm settled at a coffee shop.
• Those places where people sit and wait: train stations and trains, coffee shops, airports, in the back of the car, etc. will be far more likely to have sophisticated internet devices connected.  Presenting opportunities in customer service, customer retention, marketing, ways of selling and doing business.
• For enterprises this also changes the mobile office, enabling greater transparency and security of enterprise applications.
• And as discussed at length in other articles on this weblog, provides new opportunities for the Telco API to enhance the web experience of those mobile laptops.

On the network side:

• The core network of mobile operators is going to need to flatten, and do so quite rapidly.
• The backhaul network in mobile operators is already a well covered topic, announcements between O2 and BT show the solutions being adopted.
• HSPA+ is required not for speed, but for the capacity it offers to meet demand in high traffic zones.  HSPA+ was discussed in my Mobile World Congress Summary.
  
• The usual device delays that 3G and HSPA has suffered, may not impact LTE (Long Term Evolution) as greatly as its first application may not be a smart-phone, rather a USB mobile broadband modem powered from the laptop.

Ovum predicts the number of HSDPA connections will reach 16.5 million by the end of 2008 in Western Europe, thanks in part to the simplicity of plugging in a USB HSDPA modem and it just working rather than the complex configurations and reboots of a data card; as well as the simplicity and attractiveness of the pricing plans at just 15 GBP per month.  Mobile operators are now working on providing value added services on top of this mobile broadband access.  One such service is secure remote access (SRA), i.e. enabling secure access to the corporate LAN and protecting remote corporate devices (laptops and smart-phones).  SRA can add $15-$30 per device per month in ARPU (Average Revenue Per User).

What would appear at first blush to be just a matter of using IPsec (IP Security) or SSL (Secure Sockets Layer), has spawned a whole industry comprising the following groups:  

• Dedicated SRA providers such as iPass and Fiberlink providing a package of dial-up, Ethernet, WiFi and HSDPA access options bundled with a security package for the global traveler;
• Mobile operators' offers range from HSDPA and a simple connection manager, e.g. O2's Mobile Connection Manager; to complete packages of managed security and remote access, e.g. Vodafone's Secure Remote Access;
• Fixed and Mobile network operators offers similarly range from access centric to a complete managed solution across the corporate LAN as well as remote access, e.g. Orange Business Services (which is in part a resell of iPass) and BT MobileXpress;
• IT security vendors such as Symantec and Checkpoint with the unified threat management systems (both LAN, remote access and remote offices);
  
• Both local and global IT system integrators that package together solutions from the above providers; and
• The enterprise's IT department.

To expand a little more on what SRA covers: for global access it's about providing connectivity to the corporate LAN and internet through WiFi, hotel Ethernet, dial-up and mobile broadband.  On security it covers: anti-virus, firewall, anti-spyware; encryption of traffic between the PC and corporate LAN; multi-factor authentication; data protection including encryption, device control, information policy, back-up and restore; one stop connection client; policy management and control of end user behavior to meet IT policies; management reporting; central portal providing IT with improved visibility and control; all backed up with Professional Services and Help Desk.  

So which supplier will dominate?  Based on a recent enterprise survey I ran in the UK, Germany and the US it very much depends upon what the enterprise is buying.  If it's a security solution, then it will be from an IT security vendor or a managed solution from an operator or IT system integrator.  If it's remote access, then the operator (fixed and/or mobile) is the likely choice.  For secure remote access, the choice is a little more complex, and will depend more upon the type of enterprise and its situation.  For example, a large financial services enterprise, with a large IT department will have a tendency to build a solution from an IT security vendor.  Though with that said we are seeing departments within large enterprise select an operator's SRA for their team. For a SME, which has a LAN security solution, but not the remote access component, a solution from an operator will likely be their choice.

This situation puts the operator in an interesting position, it can choose to be:

• Just an access provider, which sets it on the path of being a utility;
• Find a mix of security and access that meets a segment of the enterprise, which is difficult as enterprise IT providers already bundle remote access security solutions into their unified security solutions; or
• Deliver a complete managed access and security solution, which given Verizon Business bought CyberTrust and Vodafone bought Aspective shows this is a growing focus for those operators strong in the enterprise segment.

Perhaps secure remote access will be the tipping point upon which an operator breaks-through and delivers managed services to its enterprise customers, or secede the space and focuses upon access and being a utility.

Some DSL (Digital Subscriber Loop) providers have certainly led the industry in communicating rates for their service that are unlikely to ever be experienced by their customers, with statements such as "Speeds upto 50 Mbit/s,"  note that all-important 'upto' term.  Ofcom in the UK has started an investigation into this practice.  Physical loop limitations mean that unless your house is next to the local exchange, the actual throughput will be much lower, typically one half to one quarter of that rate.

Earlier this year I did a quick survey examining the mobile industry and its claims as multiple wireless technologies are offered to customers.  The US is focusing upon average download speeds and defining the conditions upon which those speeds are achieved.  The rest of the industry uses 'upto' with in some cases guidance on what can typically be expected.

For DSL, through-put is dependent on loop-length, noise at the local exchange (generally Gaussian), concentration in the carrier's network, and congestion on the site being accessed.  For example, at home I know I get 2.8 Mbit/s rain or shine.  However, for my mobile data service the throughput is dependent on my distance from the tower, the number of people simultaneously using that tower, whether I'm indoors, the weather (fading is Rayleigh not Gaussian, so sometimes it just does not work), which device I'm using, and what smarts the operator has in their network to squeeze the data; as well as the concentration in the carrier's network and congestion on the site/service being accessed.

My experience with throughput on my mobile service is definitely more variable.  This raises the question does average download speed mean anything?  Upto speeds have been used in playing marketing games about size.  When really what matters is how long it takes to download an email with a 1MB attachment, or how long will it take for the BBC news website frontpage to download, or how often will a webpage or email download timeout?  It's definitely something that an independent agency, such as JD Power and Associates or Consumer Reports, should be evaluating and comparing across operators as mobile access to the Internet becomes as pervasive as mobile voice services. In an ideal world it would be nice to see a number of measurements around a region, for example NYC metro area, comparing operators' performance with mean and percentage of measurements above some 'adequacy' user experience level.