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© 2007 AT&T Knowledge Ventures. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures.
Expanding Mobile Wireless Capacity:
The Challenges Presented by Technology and Economics
Richard N. Clarke Assistant Vice President AT&T – Global Public Policy [email protected]
Phoenix Center Annual U.S. Telecoms Symposium
Washington, DC
3 December 2013
Page 2
Overview of presentation
What is the challenge?
What methods are available to expand capacity?
How effective has each been?
How effective may they be in the future?
Without much more raw spectrum, these methods will not be able to keep up with forecasted demand
Alternatively, more severe price adjustments may be necessary to equilibrate the market
The analyses and data presented in this paper are intended to portray the U.S. mobile wireless industry on a national average basis. They may not be representative of any particular U.S. geographic region or mobile operator, including AT&T. No proprietary AT&T data were used in performing these analyses. The conclusions developed in this paper are those of the author, alone, and should not be construed as representing any official position of AT&T.
© 2007 AT&T Knowledge Ventures. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures.
What is the challenge?
Page 4 Page 4
Rise in data usage is driving mobile demand
Notes: Reported traffic does not include DVB-H, Wi-Fi, or Mobile WiMax. Voice does not include VoIP. M2M traffic is not included.
Total global traffic on mobile networks, 2007-2013
Page 5 Page 5
And U.S. forecasts predict this to continue
Notes: Voice and Data TB figures for 2010-2012 are from Fig. 1. Forecasted 2013-2022 Voice demand growth assumes Voice TB remain flat at 2012 levels. Cisco (2013) figures for Data TB are used for 2013-2017 Data demand. These Data TB figures are extrapolated forward for 2018-2022 assuming that Cisco’s forecasted demand growth rate for 2016-17 decays by 10% each year over the 2018-2022 period.
© 2007 AT&T Knowledge Ventures. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures.
What are the tools to address growing demand?
Page 7 Page 7
More spectrum
By deploying more radio spectrum, capacity is increased
But the spectrum usable for mobile wireless is very scarce
It is being used for TV or by the government
These entities have had little economic incentive to relinquish it
U.S. Spectrum Growth
0
50,000
100,000
150,000
200,000
0
100
200
300
400
500
600
1983
1984
1985
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1988
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2007
2008
2009
2010
2011
2012
Traf
fic in
TB/
mon
th
MH
z of
Spe
ctru
m
Spectrum in 4G LTE use
Spectrum in ~3G use
Spectrum in 2G use
Spectrum in 1G use
Total Allocated Spectrum
Traffic
Page 8 Page 8
More spectrally efficient technologies
Newer wireless technologies can carry more bps/Hz
As customers are migrated to these technologies, more total traffic can be handled by a given amount of spectrum
Spectral Efficiency (bps/Hz) Growth of Effective Capacity
0
0.5
1
1.5
2
2.5
1
21
41
61
81
101
Ind
ex
of
Re
lati
ve S
pe
ctra
l C
apac
ity
(19
85
=1
) 4G LTE capacity
~3G capacity
2G capacity
1G capacity
Page 9 Page 9
Increased “reuse” of spectrum
By deploying more towers and splitting cells, capacity within a geographic area is increased by “reusing” spectrum
This has been done intensively, but it is expensive as its cost scales fairly linearly with cell counts
U.S. Cell Site Growth Cell Splitting
1 3
2
4.1 4.3
4.2
4.4
4.5
4.6
4.7
-
50,000
100,000
150,000
200,000
250,000
300,000
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Page 10 Page 10
Relative contributions
Historically, more spectrum, more efficient technologies and increased reuse have allowed capacity growth to keep pace with traffic demand, but this is about to change
Capacity growth relative to traffic growth
Note: Displayed historical capacity index doesn’t include improvements in network packing that may have occurred from 1985-2000.
1
10
100
1,000
10,000
100,000
1985
1986
1987
1988
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1991
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2011
2012
Loga
rithm
ic sc
ale
(198
5=1)
Reuse Index
Spectral Capacity Index
Total Capacity Index
Traffic Index
© 2007 AT&T Knowledge Ventures. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures.
Will future tools be adequate?
Page 12 Page 12
4G LTE and LTE-Advanced
These technologies offer substantial improvements through:
Orthogonal frequency division multiple access (OFDMA)
Multiple input multiple output (MIMO) transmissions
Coordinated multipoint (CoMP) transmission/reception
Lift in spectral efficiency over current ~3G is roughly 45% for LTE and 135% for LTE-Advanced
Supports more functional small cells (Het-nets) which make more intensive spectrum reuse more economic
Reduced latency permits VoLTE to replace separate voice networks, which enables more efficient network packing
But LTE’s higher throughput speeds and lower latency increase mobile wireless’ functionality – which encourages further usage growth!
Page 13 Page 13
Contributions to future capacity growth
300 MHz more spectrum by 2015 is promised in the FCC’s National Broadband plan, but so far little has been allocated
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Gro
wth
Ind
ice
s (2
01
0 =
1.0
0)
Raw Spectrum
Migration to Higher G Technologies
Reuse with 4G+ Het-net Lift
Network Packing
Dashed lines assume 300 MHz spectrum augment
Page 14 Page 14
But all of these may still be inadequate
300 MHz more spectrum is not adequate to keep capacity ahead of expected demand growth over the 2012-22 period
About 560 MHz needs to be added to prevent deficits
1
10
100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Gro
wth
Indi
ces
-Log
arit
hmic
sca
le (
2010
= 1
)
Capacity Index with Current Spectrum
Capacity Index with 300 MHz of additional Spectrum
Demand Index
© 2007 AT&T Knowledge Ventures. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures.
Summary
Page 16 Page 16
Summary
Mobile wireless technologies have become ever more capable
Faster speeds
Lower latency
Greatly improved data carrying capacity
But demand is growing even faster
Meeting the challenge will require:
Even more capable technologies; and
Even more intensive spectrum reuse; and
Much more raw spectrum – about 560 MHz
The alternative is price adjustments to equilibrate the market, which may suppress desirable usage growth
Full paper is forthcoming in Telecommunications Policy,
and is currently available at: http://ssrn.com/abstract=2197416