umts forum report#42 june 2009

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LTE Mobile Broadband

Ecosystem:the Global Opportunity

REPORT N 42

www.umts-forum.org


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LTE Mobile Broadband

Ecosystem:

the Global Opportunity

UMTS Forum, June 2009

UMTS Forum Report 42


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Copyright Ovum & UMTS Forum 2009. All rights reserved. Reproductions of this publicationin part for non-commercial use are allowed if the source is stated. For other use, please contactthe UMTS Forum Secretariat, Russell Square House, 10-12 Russell Square, London WC1B 5EE,UK; Telephone +44 20 7331 2020. Email [email protected].


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Ovum - UMTS Forum 2009 Report No. 42 3

Table of contents

1 Foreword ....................................................................................

1 Executive summary ..................................................................................

2 Introduction ..............................................................................................

3 LTE enabled services ................................................................................

3.1 Mobile data applications will drive LTE..........................................................................

3.2 Consumer services..................................................................................................................

3.3 Enterprise services vertical sectors .............................................................................

4 Devices and infrastructure.................................................

4.1 Overview.....................................................................................4.2 Chipset vendor LTE roadmap .............................................................................................

4.3 Device vendor LTE roadmap ...............................................................................................

4.4 Infrastructure supplier LTE roadmap ..............................................................................

4.5 Test component .......................................................................................................................

5 Drivers and barriers of the LTE ecosystem.............................................

5.1 Reasons and drivers for the deployment of LTE .........................................................

5.2 Barriers to the adoption of LTE...........................................................................................

6 End user survey results ............................................................................

7 Conclusions and recommendations...............................................................

7.1 Drivers and risk factors for LTE deployment and adoption ...................................

7.2 End user expectations and needs ....................................................................................

7.3 Recommendations...................................................................................................................

Annex A: LTE global ecosystem development.......................................................

A.1 Global LTE ecosystem roadmap .........................................................................................

A.2 Regional ecosystem variations.......................................................................................................A.3 Impact of LTE standardisation .......................................................................................................

A.4 Industry view on future LTE development scenarios.............................................................

A.5 Trials and industry activities............................................................................................................

Annex B: Supporting initiatives..............................................................................

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Ovum - UMTS Forum 2009 Report No. 424

Table of figures

Figure 2.1 Illustration of LTE ecosystem.

Figure 2.2 What does the ecosystem foundation group comprise? ......Figure 2.3 Each generation ecosystem increases in size..

Figure 2.4 Key components for service access..

Figure 2.5 Different services share common components ..

Figure 2.6 Overview of LTE ecosystem roadmap ..

Figure 3.1 Consumer services enabled and enhanced by LTE ..

Figure 3.2 Content / devices preferences..

Figure 3.3 Business services enabled and enhanced by LTE

Figure 4.1 Overview of chipset vendor roadmap..

Figure 4.2 Overview of device vendor roadmap...

Figure 4.3 Overview of infrastructure supplier roadmap..

Figure 4.4 Public LTE and SAE vendor announcements ..

Figure 5.1 LTE ecosystem interactions ..

Figure 6.1 Current/future preferred mobile broadband services by country..

Figure 6.2 Current/future preferred mobile broadband services by age...

Figure 6.3 Mobile broadband services growth ..Figure 6.4 Service/application priority list ..

Figure 6.5 New services and applications by country ..

Figure 6.6 New services and applications by age..

Figure 6.7 Device preferences for embedded mobile broadband..

Figure 6.8 Preference for embedded mobile gaming.

Figure 6.9 Preference for separate mobile phone and video/music device ...

Figure 6.10 Feature preferences for mobile device .Figure 6.11 Preference for mobile netbook device .

Figure 6.12 Preference for mobile TV capability .

Figure 6.13 Price to pay comparing with current fixed broadband offer..

Figure 6.14 Price to pay comparing with current mobile broadband offer..

Figure 6.15 Adoption of higher performance mobile broadband ..

Figure 7.1 Drivers and risks in LTE ecosystem..

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Table of figures

Figure A.1 Overview of LTE ecosystem roadmap ....

Figure A.2 LTE roadmap in US .Figure A.3 LTE roadmap in Western Europe..

Figure A.4 LTE roadmap in China..

Figure A.5 LTE roadmap in Japan ..

Figure A.6 LTE roadmap in South Korea

Figure A.7 LSTI Proof of Concept - Predicted end user data rates ...

Figure B.1 Examples of NGMN requirements

Figure B.2 LSTI activity timing...

Figure B.3 Industry LTE demonstrations....

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Foreword

Mobile broadband is changing the way the world communicates. The UMTS Forum helps allplayers in this dynamic new value chain understand and profit from the opportunities of 3G/

UMTS networks and their Long Term Evolution (LTE).The UMTS Forum participates actively in the work of the ITU, ETSI, 3GPP, EC and CEPT as well asother technical and commercial organisations globally. It also contributes to the timely licensingand deployment of mobile broadband globally through regular dialogue with regulators andresponses to public consultations. A strong promotional voice is maintained via a high-profilepresence at conferences, seminars and workshops as well as regular briefings to the media,analysts and other stakeholders.

Membership of the UMTS Forum draws together everyone with an interest in mobile broadband,including network operators, regulators and the manufacturers of network infrastructure

and terminal equipment. Since its launch in 1996 The UMTS Forum has been supporting theinterests of its membership with a range of studies, reports and other outputs. Principal focusareas include markets trends, mobile broadband services and applications, key growth markets,spectrum & regulation, technology & implementation. While centered around the promotion of3GPP technologies and their long term roadmap, the studies of the Forum nevertheless embracea range of complementary mobile and wireless access technologies that can deliver broadbandmultimedia and the personal Internet.

This UMTS Forum report n 42,LTE Mobile Broadband Ecosystem: the Global Opportunity,is a first step in understanding the critical enablers for LTE. Offering significant benefits in speed,

capacity and support for new services, LTE will dominate the global market for mobile broadbandas operators start to deploy networks over the next few years. LTE will be characterised by acomplex ecosystem that includes not only operators, infrastructure providers, terminal vendors,standard bodies and regulators, but also chipset manufacturers and consumer electronicsvendors, to name a few. Supported by a healthy ecosystem, LTE will also see the emergence ofdynamic new business models not hitherto experienced in the mobile space.

This report explores a number of key parameters and success factors, the level of readiness ofthe industry, and gives a series of recommendations for successful LTE deployments. It is alsointended to serve as the foundation for further studies by the UMTS Forum that will examinespecific elements of this new value chain in greater depth.

I would like to thank the Ovum team for their extensive research work and in particular StewartAnderton, Yim Ling and Lei Xue. I would also like to thank the UMTS Forum Steering Group andthe following UMTS Forum colleagues for their dedication in the preparation and direction of thisreport: Eduardo Snchez Fernndez, Paul Le Rossignol, Bosco Fernandes, Jean-Paul Rissen,Jean-Paul Pallois and Colin Chandler.

June 2009

Jean-Pierre Bienaim

Chairman, UMTS Forum


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The UMTS Forum commissioned this report from Ovum Consulting to provide a globalanalysis and insight into key issues surrounding the LTE/SAE1,2, ecosystem. The reportconsiders the relationship between LTE and other mobile broadband technologies; thenew services, devices and applications which will drive the success of LTE; and thedrivers and risk factors in the LTE ecosystem. The report is based on over 30 interviewswith operators, vendors, regulators and standards bodies, and end user research with550 respondents in the US, Korea, Japan, Germany, France, Italy, the UK and Spain. Thereport is supported by Ovums insights derived from continuous analysis of the industry.

LTE has industry commitment

The report findings are very positive and show that there is considerable commitment andco-ordination across the industry, with most leading mobile network operatorsplanning to deploy LTE.

NTT DoCoMo in Japan is a very active supporter of LTE, driven by the demand for highspeed data services in the country and the companys commitment to deploying new,market-leading technologies rapidly. In the US, Verizon is a leading supporter of LTE,with plans to introduce the first commercial services in the second half of 2010. ChinaMobile is actively involved in LTE trials with vendors, and the company has announcedplans to build a TDD (Time Division Duplex)-LTE pre-commercial network in China fromthe middle of 2010, followed by commercial trials in late 2010. It is Ovums assessmentthat commercial TD-LTE services will be launched in China in the first half of 2011.

LTE is also active in Europe, where TeliaSonera has started network roll-out, with acommercial launch planned in 2010. NTT DoCoMo, Telia Sonera, KDDI and VerizonWireless have all announced their LTE and SAE Evolved Packet Core suppliers.

Many major operators have already declared their intent to deploy LTE as the ultimatestage of 3G Evolution. This will allow them to take advantage of performanceimprovements in the radio access network and the service and operational benefits ofan all-IP core network. Nevertheless, global European operators such as Orange and

Vodafone will rather deploy LTE in 2011-2012, optimizing their legacy investments andnetwork costs. In the longer term, LTE, together with major business transformationby the operators, will provide the business environment which will allow capital andoperational cost reductions in an increasingly competitive market. All major systemsvendors have LTE product roadmaps and these companies are engaged in jointprogrammes of technology trials in line with their market and company strategies.Major alliances span the ecosystem which will enable end-to-end solutions, withdevices and applications to be offered in the early markets before the broaderecosystem emerges.

1 Long Term Evolution / System Architecture Evolution (LTE/SAE) is an evolution of the current 3GPP 3G wireless network

standards. LTE relates to the radio access network and SAE to the core network.2 References to LTE in this report relate to both the LTE radio access network and the SAE core network, unless it is only the

SAE core network which is being referenced.

1 Executive summary


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The LTE standards are being implemented by chipset vendors and early pre-standardchipsets and devices are being used in interoperability and performance trials. Thesetrial and testing initiatives receive cross industry support through the Next GenerationMobile Networks (NGMN) Alliance3and the LTE-SAE Trial Initiative4(LSTI), the latterbeing instrumental in the breadth of test and proving activities.

Ecosystem drivers support LTE

The introduction of icon-based mobile devices such as the iPhone has stimulatedmobile broadband, which is increasingly being used as a fixed broadband substitute. Theavailability of higher quality content, including audio and video, will cause a significantincrease in data traffic. A projected six-fold increase in global IP traffic between 2007and 20125 (driven mainly by video) will impact mobile as well as fixed networks, withmobile data projected to double every year from 2008 to 20136. This growth projection

will be supported by LTE operators initial focus on data services. Network operatorscarrying this traffic will benefit from the increased radio network efficiency of LTE;indeed, a recent report published by the UMTS Forum7indicates that the cost permegabyte for LTE services will be 83% lower than Wideband Code Division MultipleAccess (W-CDMA) and 66% lower than High-Speed Downlink Packet Access (HSDPA).End users are enthusiastic for mobile broadband in laptops and netbooks and also inmobile phones and personal media players. An improved user experience is critical anddevices must provide intuitive access interfaces to content and applications. The lowerlatency and higher capacity access inherent in LTE will reduce functional delays andrender a wide range of applications and services more accessible. Survey results fromregular users of 3G data services indicate that LTE will stimulate the greatest growthin demand in video and media services (35%40%), but it is access to email, webbrowsing/search, online shopping and social networking that will be the most usedconsumer services with usage growth of 15%25%. Location-based (GPS-linked) andin-car services are seen as major application areas that end users will find attractive.

Broadband users are demanding increasingly higher bandwidths to enable them toaccess media-rich content. The primary demand for bandwidth is not just from musicand video downloads: newspapers, blogs, social web sites, commercial and topic websites are increasingly media-rich and benefit from being accessed through higher speed

and lower latency connections. Whilst these and many other services will developrapidly in an LTE environment, no one application (existing or new) will dominate theconsumer or enterprise markets. This breadth of demand will significantly reduce therisk to the industry of LTE being dependent on only a small number of drivers.

3The Next Generation Mobile Networks (NGMN) Alliance: http://www.ngmn.org/ (see Annex B)4 The LTE-SAE Trial Initiative (LSTI) is a global industry group which aims to drive industrialisation of 3GPP LTE and SAE technology anddemonstrate its capabilities against 3GPP and NGMN requirements. These activities stimulate development of the LTE ecosystem. http://lstiforum.org/5

http://newsroom.cisco.com/dlls/2008/ekits/Cisco_Visual_Networking_Index_061608.pdf6 http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf7 Global Mobile Broadband: Market potential for 3G LTE. http://www.umts-forum.org/component/option,com_docman/task,doc_download/gid,1902/Itemid,12/


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To support these service demands, end users will expect improved performance fromtheir network, which LTE will provide. On 20 MHz bandwidth, it can offer a peakdownload rate of over 150 Mbit/s, a peak upload rate of 50 Mbit/s and up to 200 usersper cell. This contrasts with HSPA+ over 5 MHz bandwidth which is typically limited to

28 Mbit/s per cell. In practical situations, modelling of typical user environments showsthat typical LTE user data rates of 2-4 Mbit/s will be achievable, with capability to burstto far higher rates.

It will be essential for LTE devices to be multi-standard capablee.g. LTE/HSPA(+),CDMA/LTE, GSM/UMTS/LTE, UMTS/LTEand also to be multi-band capable, dependingon the target market for the device and the frequency bands used in that market.For example, devices for a North American market will require 700 MHz for the homemarket, and, if intended for roaming in Asia and Europe, at least the 2.6 GHz and2.1 GHz bands also. The underlying capabilities are being developed by vendors and

decisions on the mix of capabilities will be determined.Devices will become more complex, some with application-specific form factorswhich vendors will have to understand and develop. New devices will need improvedcharacteristics: greater processing capability to deal with video processing andapplications; larger screens to provide a clean, usable, multi-touch interface; multi-standard and multi-frequency band capable of operating in other networks for roamingand to increase coverage area; multiple antennas; improved battery life and higherprocessing capabilities. The industry will require focus to meet these challenges:fortunately, however, not all of them have to be concurrently met in every device.

It is expected that high end smart phone devices will be a priority, although powermanagement strategies will be needed to handle higher processing and video demands.

There is a range of machine-to-machine applications currently supported by mobilenetworks. The higher capacity of LTE will enable new areas, e.g. remote healthcare fileaccess and news reporting, but these will not be a major driver of LTE uptake.

The all-IP architecture of LTE, with a core network architecture which is able tointerwork with a wide range of radio access network technologies, will provide inherentoperational advantages and long term reductions in operating expenses. With broadindustry co-operation, the roadmaps of different sectors of the ecosystem are well

aligned creating momentum for LTE, which will help the mobile industry develop theexpected new business models to serve new vertical markets.

A key factor for LTE deployment is spectrum availability. Alignment within and betweenregions is required to support roaming and create market scale for devices. The 2.6 GHzband has been reserved as a 3G extension band and is suitable for LTE, WCDMA/HSPA/HSPA+ and WiMAX. The interest for additional spectrum in the 2.6 GHz band lies in theavailability of large channel bandwidth (up to 20 MHz bandwidth) which will enableLTE to fulfill its potential. In Europe, Norway and Sweden awarded 2.6 GHz spectrum tooperators in 2007 and 2008, respectively, and other countries will follow suit from early 2009.


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The key band in the US is 700 MHz, while the 2.1 GHz band will be most prevalent inChina and Japan.

During the 25 year growth of the mobile industry, many valuable lessons havebeen learned in terms of standards development, concept testing and ecosystemdevelopment. These have led to an essential, more structured approach being taken todevelop the new ecosystem. The LTE ecosystem will incorporate a breadth of devicesand components, software, applications and services, new business models andplayers in the value chain. These changes will build on Web 2.0 and its enhancements,which fundamentally change the way in which information and services are sharedacross the internet. All of these devices, applications and services will be part of anecosystem which will be broader and deeper that that for any previous communicationstechnology. The broadening of the ecosystem is itself a disruptive influence and oneof which the industry needs to be continually aware. It will be a challenge to adapt to

these and any new disruptions, but they must be responded to at all levels, not only togenerate acceptable return on investment but to allow operators to survive.

Risks for LTE

The development of the LTE ecosystem is not without challenges and risks, which arediscussed in more detail in Section 7 of the report.

With the economic climate creating uncertainty in all markets, its impact on theLTE ecosystem specifically is difficult to judge and further assessment in this area isrecommended. As well as influencing the attitude of end users to adopt new services,

the economy may also impact the speed with which the majority of operators deployLTE beyond the initial commercial installations. The scale of these deployments is crucialto device vendors, which need market scale and certainty to bring volume productioneconomies.

Operators and service providers have to decide how they can achieve the greatestreturn from their network and services. Expected revenue streams are threatened intwo main areas. The first concerns the battle for the customer and how the servicesdelivered to devices are controlled and managed. If the network operator controls itsown application store, it will be able to retain a greater share of end-user revenue than

if the applications are provided from an externally controlled managed device platform(e.g. Apple or Nokia application store). However, whilst the device vendors currentlyhave the upper hand, network operators can make good returns on broadband accessrevenues and avoid all the store development costs. The second concerns lucrative voiceservices. If devices are allowed to support VoIP clients, then internet-based voice serviceproviders will be able to channel revenues away from the operator.


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Operators will need to sustain their existing networks as LTE is rolled out. Someoperators will continue to deploy their HSPA/HSPA+ and Evolution-Data Optimized(EV-DO) networks as they introduce LTE. If too many operators delay their LTEdeployments due to competition for capex and focus primarily on HSPA/HSPA+, then

the demand for applications and devices will impact the development of the LTEecosystem. However, the applications developed for HSPA/HSPA+ networks will allcontribute to and complement the eventual LTE ecosystem. Having said this, consumerswill expect a consistent end user experience, in terms of look and feel, as they operateacross different networks.

Relatively straightforward devices such as USB dongles and PC cards will come tomarket early. The full benefits of LTE will require handheld devices, which are expectedto become available in 201112. The risk is that without an adequate supply of devicesthe ecosystem could replicate the slow introduction of 3G in the early part of this

decade. We recommend that all players in the value chain assess and strengthen theirpartnerships, which are so important in this area.

The cost of intellectual property rights (IPR) licensing has been an issue within theindustry for many years. LTE devices will need to support pre-LTE standards (to allownon-LTE voice services and roaming to non-LTE regions), and may also need to includeother licensed technologies such as video codecs and mobile graphic functions. Theseincremental IPR licensing costs will increase the costs of devices, which will be aninhibiting factor as the industry tries to get new devices and services accepted in themarket.

In summary, although the industry is well co-ordinated, wide-scale LTE deployment willtake some years to achieve, during which time some of the advantages to operators(e.g. long term cost reduction) will only partially be achieved. To help manage therisks and enable LTE to be brought into wide-scale service, we recommend that theindustry should consider further opportunities to strengthen and extend partnershiparrangements at all levels.


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End user expectations and needs

Services continue to move from fixed to mobile networks in all markets, and wireless isthe access technology of choice for services in developing countries. We expect to see

the trend of fixed to mobile voice migration replicated with broadband access bringingconsiderable national economic benefits. There is, however, no killer application forLTE. The capabilities of mobile broadband will serve a wide constituency of needs; infact the access technology will become increasingly less important to the end user asapplications and services become more uniform across different platforms. The breadthof services which might develop is no easier to foresee than it was for the internet atits inception, from which a wide range of applications and services have emerged.

The main conclusions drawn from our end user survey are thus:

users in all regions expressed a clear interest in having their main fixed network

internet services (email, browsing and information search) available on a mobilebroadband device. Accessibility is the key.

access to music and video media rates highly. Mobile TV, video calling and videodownloading show the strongest growth prospects.

users are receptive to new ideas and new technologies. However, the opportunitiesfor enhancements to consumer devices are not yet understood or appreciated byconsumers and it will therefore take time to fully develop this aspect of the market.

By 2020, LTE is expected to be the dominant mobile technology and LTE-enabled devicevolumes will be higher than those for any other network technology. LTE users willbe able to access services over existing networks (e.g. HSPA/ HSPA+, EV-DO) whichwill be supported within their deviceseven in the early daysenabling national andinternational roaming.

In summary, the report findings indicate that rapid and effective progress is being madeacross the industry to bring the whole LTE ecosystem to market, with the necessarycommitment from all parties to bring a major evolution of technology, devices andapplications to market.

2 IntroductionThe Third Generation Partnership Project (3GPP) is defining the Long Term Evolution(LTE) standards for a new high-speed radio access method for mobile communicationssystems. These standards incorporate the System Architecture Evolution (SAE) whichprovides a much simplified all IP core network architecture and which is able to supportmultiple types of radio access network.

The successful introduction of LTE to the market is dependent on a healthy and strongecosystem, which will encourage competition and technology innovations.


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The UMTS Forum objective in commissioning this report was to help the industryunderstand the way in which the LTE ecosystem was developing: the productsand services which will be enabled; the dependencies within the ecosystem; therelationships between LTE and other technologies; and the opportunities and risksfacing the development of a buoyant ecosystem.

What is LTE?

Long Term Evolution/System Architecture Evolution (LTE), also called 3GPP E-UTRAN(Long Term Evolution of UMTS Terrestrial Radio Access Network), is an evolution ofthe current 3GPP 3G/UMTS wireless network standards, the technical aspects of whichare well defined and there are many papers which describe the technical and systemscharacteristics.

A main objective of the Evolved Packet System (EPS), consisting of LTE and SAE, is tosupport IP multimedia services, including VoIP and high speed data applications, withan always-on end-user experience comparable to that of fixed internet access, and ata lower cost per bit. This is achieved by a flatter network architecture, improved spectralefficiency, providing a more flexible spectrum deployment, lower opex costs and betterintegration with other open standards such as WLAN and WiMAX.

A major benefit of LTE is that it has a flexible channel bandwidth requirement and canoperate in channels of between 1.4 MHz and 20 MHz. The channel bandwidth is keyfor the delivery of higher access speeds. With a 20 MHz bandwidth, it can offer a peakdownload rate of over 150 Mbit/s, a peak upload rate of 50 Mbit/s and up to 200 usersper cell. This contrasts to HSPA+ over 5 MHz bandwidth, which is typically limited to28 Mbit/s per cell. In practical situations, modelling shows that typical LTE user datarates of 24 Mbit/s will be achievable, but with capability to burst to far higher rates.Thus the 3GPP LTE radio technology is optimized to enhance existing 3GPP networksby enabling significant new high capacity mobile broadband applications/services andproviding cost-efficient ubiquitous mobile coverage.

Operators are motivated to move to LTE as:

it supports a flatter network architecture which reduces the radio networkcontroller (RNC) layer, leading to a more cost effective network, with reducedcapex and opex

there is wide industry support to develop and build the essential ecosystem

it enables higher performance, lower latency services to be offered to corporateand consumer customers

it provides a natural evolution path from UMTS (WCDMA and HSPA/ HSPA+).


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The initial standardisation of LTE was completed in 2Q 2009.

The two UMTS Forum White Papers - Towards Global Mobile Broadband: Standardisingthe future of mobile communications with LTE (Long Term Evolution)8and MobileBroadband Evolution: the Roadmap from HSPA to LTE - describe the technical aspectsof LTE and its evolution in more detail.

The LTE ecosystem overview

The ecosystem interest groups

The LTE ecosystem will be larger than that for any communications technology todate. It is not only the operators, service providers, device and component vendors,application and platform developers, content and services providers which willenable end users to enjoy the performance benefits and wide-scale availability of

LTE technology. The ecosystem will include the regulatory and standards bodies, theconsumer and business markets served, and the business models of the participants.This latter point is one which will need to be grasped by the mobile network operators(MNOs). Just as device platforms have opened to allow thousands of applications andservices to be developed and bought by consumers, the network itself will provideservice development platforms which will allow third party developers to providenetwork-based capabilities. These points are discussed later in this section of the report.

The collaborative initiatives being undertaken in the industry are co-ordinating these

players to allow the full benefits of LTE to be brought to the worlds market efficientlyand in-step. Figure 2.1illustrates the major interest groups in the ecosystem and theirrelationships.

Figure 2.1 Illustration of LTE ecosystem

Source: Ovum8 http://www.umts-forum.org/component/option,com_docman/task,doc_download/gid,1904/Itemid,12

Business and general consumer markets

Enterprise VPN

Internet-basedapplications

Home / consumerelectronics

Vertical -specific

applications

Transport andlogistics

Machine tomachine apps

Rich voice, VoIP.cct switch support

Gaming

Broadcastmobile TV

Media access and

internet TV

Improved mobilebroadband

Complementsexisting services

Chipsetmanufacturers

User devicevendors

Infrastructuresuppliers

Appns softwaredevelopers

Test equipmentmanufacturers

Service /contentproviders

Foundation group

Operators

Momentum group

Standardsbodies

Regulator

Industry bodies

Enabler group


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The foundation group in Figure 2.1 will have the greatest number of contributors andwill grow most strongly as LTE networks are deployed. The performance characteristicsof LTE broadband will expand the number of applications developed and draw newvertical markets into the ecosystem, with sector-specific devices, interfaces andapplications.

As Figure 2.1illustrates, there are interactions between many of the industry players.Information, interdependencies and collaboration flow in all directions.

An example of the collaboration needed in the ecosystem, and of an applicationoutside the traditional mobile phone domain, is the inGeo service development fromQualcomm - an application for use in existing cellular networks and LTE environments.The solution, with applications in non-cell phone personal location devices and relatedservices, is based around cellular technology and assisted-GPS chipsets which will be

incorporated into application-specific devices. Service control and application serverswill provide the capabilities to deliver a complete solution. The service developmentand deployment requires cooperation across the ecosystem, between the chip vendor,mobile carrier, application service provider, device manufacturer and distributor to bringa complete end-user solution. The inGeo reference system will expand the ecosystemfurther. It will allow third party devices such as motion sensors or other systems tobe incorporated into the end solution, which might be used for package tracking orperhaps location-based telemetry systems.

In the US, Verizon is developing its LTE Innovation Center in collaboration with two ofits primary vendors for initial LTE network deployments, Ericsson and Alcatel-Lucent.The centre will allow device and application developers to test their products during thedevelopment stage and leverage the centres expertise in deploying mobile broadbandsolutions, service integration and network hand-off issues. The centre will focus onthree major product areas: consumer electronics and appliances; machine-to-machineproducts that wirelessly deliver information between devices specifically designed forfields such as healthcare, security and utility monitoring; and telematics applications,such as GPS solutions for vehicle fleet tracking.


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Foundation Group Ecosystem components

End user devicevendors

SAE/EPC, LTE radio access, antennas, power units, amplifiers, servers, enclosures.New niche vendors entering market with protocol stacks, specialist chipsets

End user devicevendors

Personal devices: Handsets, personal media players, laptops and netbooks, gamesconsoles, GPS/navigation, OEM devices and branded end user devicesConsumer electronics: cameras, media centres, in-car entertainment, vehiclediagnostics, TVIndustry-specific devices: telemetry, remote monitoring, security and surveillance/security, financial transaction/POS terminals; health monitoring/ display, controlsystems

Service/ contentproviders Services: voice, text/media messaging, broadband, video/TV, location-based servicesContent: Music, video, games, special interest groupsApplications: Software services, managed services, productivity servicesIntegration with Web 2.0 content; portals; personalised deliveryManaged device platforms

Test equipmentmanufacturers

For lab and field test of systems, devices, RF performance, software and hardwaretest, integration, environmental, development, conformance, interoperability andacceptance testing.

Chipset and devicecomponentsmanufacturers

Baseband modems, baseband and power management, RF transceivers, applicationprocessors, protocol stacks, embedded software, browsers, voice recognition, audioand video codes, keypads, batteries.

Softwaredevelopers Platforms and operating systems: Java, Linux, Palm OS, Symbian, Windows CEWindows Mobile, Android.Middleware and embedded software: browsers, native applications/games.Development tools and software development kitsApplications: Tens of thousands and growingsocial networking, video/photo sharing,music sites, blogs, news, games, travel, community and special interest groups

The components of the broadening ecosystem are considered in Figure 2.2.

Figure 2.2 What does the ecosystem foundation group comprise?

Non-voice mobile services will be increasingly important components within the mobileecosystem, while voice and basic data (SMS) will become relatively less important andthe widening ecosystem will become more complex. It will go beyond the traditional

mobile network ecosystem to incorporate a broad range of internet applications, newservices, devices and content delivery mechanisms.

This complexity brings with it a challenge for LTE. In a larger ecosystem, there are agreater number of relationships and dependencies which have to work effectively forthe full opportunities for LTE to be realised.For the purpose of our analysis the ecosystem is divided into three component groups,shown in Figure 2.1: the foundation group; the enabler group and the momentum

group. In reality, however, the boundaries between groups are not so strictly defined.

Source: Ovum


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the foundation group is formed by the entire vendor community, including chipsetcomponent vendors, device vendors, infrastructure suppliers, test equipmentmanufacturers, software developers and service/application providers. Membersof this group work together to provide three LTE-related product groups:LTE infrastructure equipment; user devices, encompassing handsets, laptops,application specific devices, gaming consoles and consumer electronics, all ofwhich provide access and interfaces to the third group; content, services andapplications

the enabler group is formed by standardisation bodies, the regulators and industrybodies. Through their work, the group develops and provides the technologystandards, provides the enabling regulatory framework and policy, and ensuresindustry alignment for LTE development

the momentum group is formed by operators worldwide. Their global support hasbuilt a strong momentum for LTE development, which has encouraged vendorsto deliver the first commercial products to meet the operators deploymentroadmaps in 2010. Once LTE is introduced, the healthy growth of the ecosystem isdependent on operators commitment to deploy their networks. This will create themomentum for all members of the ecosystem to invest in further development.

The momentum and foundation groups are highly active in the ecosystem. They provideessential inputs to the enabler group for standardisation, regulatory decision makingand the industrys inter-operability test programmes. The progress made by the enablergroup and the decisions that it makes will influence operators LTE deployment strategy.All groups are closely linked in the ecosystem and are working to achieve the first LTEcommercial deployments.

Previous generations of mobile network systems and infrastructure have beendeveloped around vertically integrated technologies, services and applications i.e. basedon specific devices/handsets, radio access network technologies and core networksystems with associated support services. These have underpinned network operators

and service providers core business. The ecosystem for these networks and services wasbound by voice and basic data (SMS, MMS) services with low speed networking access.The availability of Universal Mobile Telecommunications System (UMTS) serviceswiththeir associated devices, applications and attractive service bundleshas caused theUMTS ecosystem to start to grow to support WCDMA and HSPA services.


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Figure 2.3 Each generation ecosystem increases in size

Source: Ovum

As Figure 2.3 shows, the supporting ecosystem layers of the foundation group areexpanding. To quantify one area of this growth, a recent audit of applications for Nokiaphones counted over 60,000 total applications, broken down into the following types:

9,000 Nokia S60 platform applications (only 1,000 are available on Nokiason-device download store)

45,000 Java applications

between 5,000 and 7,000 widgets (build for Web Runtime)between 5,000 and 7,000 Adobe Flash applications.

The number of S60 (i.e. native) applications available on Nokias download store canbe compared directly to Apples App Store. Estimates as of January 2009 suggest thatthere are over 15,000 applications available for the iPhone and iPod Touch. The NokiaS60 platform, meanwhile, is used in a wide range of Nokia and other vendors devices.This provides access to an addressable market for developers of over 180 million devicesshipped. It is this scale which attracts so many developers to the market.

With these numbers of developers involved, co-ordination is essential. Alcatel-Lucenthas launched the ng Connect Program, to help create the ecosystem rapidly. It willprovide an environment in which infrastructure, device, application and contentcompanies can rapidly develop and deliver next generation services and applications toservice providers, enterprises and consumers.

New sources of revenue are needed

There is inexorable downward pressure on voice revenues and mobile network serviceproviders have to find alternate streams of income and/or reduce costs. In the fourthquarter of 2008, Ovums quarterly interconnect benchmark 2008 shows an averagemobile termination rate in the EU2710 countries of 8.1 euro cents per minute.

* Source: Forum Nokia

LTE LTE3G 3G2GChipsets , client software, OS ,

user interfaces, displays, batteries

LTE LTE3G 3G2GDevices evolution : handsets = > smartphones = >laptops, netbooks and application - specific devices

LTE LTE3G 3G2GApplications and services

LTE LTE3G 3G2GNew end user communities ;new industry verticals and M2M

A greatly increased community of consumers, industry and vertical sector users

LTE LTE3G 3G2 GWidening systems capability : network, IT, back - office


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In May 2009 the European Commission issued guidance on mobile termination ratesindicating that rates should be reduced to be in line with fixed call termination and(with a few exceptions) that the guidance should be implemented by 2012. This wouldrepresent a reduction in the order of 40% from current levels.

Not all of the thousands of applications will be revenue generating, but many are.Operators may create their own application platforms for device service delivery orpartner with application platform operators/ owners. The latter option has the benefitfor network operators that by working with an established platform owner they haveaccess to stable service management, without reduced levels of capital and operationalinvestment for the operator. Device platforms are considered further in Section 4.3 ofthe report.

Within the core network, migration to LTE will need to be approached by MNOs in thesame way that fixed network operators have viewed next-generation network (NGN)

deployments - long term and holistically. It will be part of a process for transformingtheir business to adapt to an IP-centric world. To benefit from the efficiencies that LTEholds, mobile operators must undertake a major overhaul of their businesses, migratingfrom their legacy networks, systems, business processes and working practices. Newoperational systems and processes will be required to effectively manage the newarchitecture. Operators will need to shift their focus from being technology, productand network based, and move towards becoming software-led, service-driven andcustomer-centric businesses. The use of agile business processes and third parties (suchas systems integrators and application developers) for outsourced, hosted or managed

services will be needed to reduce costs and improve time to market.This transformation will enable operators to introduce service delivery platforms whichwill enable the core network to be opened up to third party developers to developservices accessible from a range of different end user devices - mobiles, televisions,laptops and other devices - spanning consumer and enterprise applications. Theconvergence of customer data storage will allow end users to flexibly access andcontrol their network-delivered services across fixed and mobile networks, leading tonew service opportunities and helping to reduce churn, as the customer experiencebecomes more integrated with the network.

Common components in the ecosystemThe performance characteristics of LTE will lead to many different types of end userdevice and consumer electronics systems in the ecosystem. Within these, there will bethree major service components to provide access to most services: the local client ordevice, web-based or remote service resources, and a means of connectivity betweenthem, as shown in Figure 2.4.

10 EU27 refers to Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France,Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, the Netherlands, Poland,Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.


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The form of the local client/device will be determined by its function. As the power ofdevices increases, applications become more complex and users expectations increase,so LTE will become the mobile access technology of choice. LTE has the advancedcapacity and low latency to satisfy emerging market needs.

The common factor which underpins the development of the consumer sector in the

communications industry, and which is increasingly providing opportunities in theoverall consumer electronics sector, is the need to be able to access the breadth anddepth of applications, service and content available on the web. Moreover, we seeconsumers requiring increased access bandwidths with reliable performance.

The trend in this direction is exemplified by the way in which users perceive and usenew products. Many users initially considered the iPhone as an evolution of the iPod,to be used to listen to music (as previously), but with the additional capability towatch stored videos. However, the connectivity which allows access to web content,applications and services has transformed the way in which users view and use the

device, which can access a much broader range of content and be used in ways thatthey had not anticipated.

The PC/laptop category in Figure 2.5 is distinct in that nearly all of its capabilitiesare added after the purchase of the basic product. Application software (which maybe bundled) is added as needed, and open platform initiatives are geared to fullyopen platforms. Netbooks are in a similar situation, but with the absence of a CDdrive. The use of the web connectivity is increasingly apparent in phones/devices andgames consoles, which, despite having most of their functions embedded, still allowapplications and services to be downloaded. By contrast, the other devices shown inFigure 2.5 are only starting to evolve and incorporate networking connectivity.

Figure 2.4 Key components for service access

Source: Ovum

Chipsets

Screen

Local content

and services

Power

User interface

OS / applications

Memory

Shared content,

data and media

ADSL

Fibre

3G

LTE

WiMAX

WiFi

Local client /

device

Web or remote

service

resources

Connectivity

Remote/Cloud

applications and services


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LTE will also be integrated with consumer devices, particularly those with inherentmobility. Just as mobile phones have incorporated cameras, so high performancecameras can integrate wireless for download of results to storage or direct to social

web sites. Vehicles shall see online diagnostics, location-based information provisionand in-car entertainment services, all of which require full mobility and nationalreal-time capability. With regards to laptops, LTE can enable computer application andOS upgrades using software as a service platform. Smaller, lower cost consumer deviceswill be developed as component prices fall.

The components of the ecosystem are discussed in more detail in Section 4 of the report.

All areas of the ecosystem are under development and proof of concept testing isunderway to assess the performance and interworking within the RAN and corenetwork. Applications and services are being developed for current networks (e.g. HSPA/

HSPA+), and these will develop further as LTE rolls out. Application-specific servicesand network-specific devices will become available in volume to meet forecast demandfrom network operators.

LSTI and its testing work provides an efficient way to share experiences between the LTEplayers, and thus widens the LTE Ecosystem.

Global LTE ecosystem roadmap

The LTE global ecosystem roadmap from 2008 to 2013 is shown in Figure 2.6.

This and regional variations are discussed further in Annex A.

Figure 2.5 Different services share common components

Source: Ovum

Different categories

of devices with

unique functions

and user interfaces

Common applications,

services and content

useable from the

InternetCommon functions:

Web access

(applications, services

and content)

An increasingly

high speed

connection

Phone/

voice

device

PC /

laptop

TV/

media

player/

STBNetbook

Surveillance

Games

console Still andvideo

camera

E-book

reader

Different categories

of devices with

unique functions

and user interfaces

Common applications,

services and content

useable from the

Internet

LTE can serve each of the

common functions and can

serve each of the device

categories


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Figure 2.6 Overview of LTE ecosystem roadmap

Source: Ovum

To explore the LTE ecosystem, we conducted interviews with major players from each

group in which we discussed the following areas:

LTE development / deployment roadmap

views, plans and expectations for the LTE ecosystem

views on the future requirements for high speed mobile broadband

expectations for LTE device evolution

expectations for services and applications that will benefit from LTE.

In this report we will discuss the roadmaps of each group in the ecosystem in thefollowing sections:

Section 3: LTE enabled services

Section 4: Devices and infrastructure

Section 5: Drivers and barriers of the LTE ecosystem

Section 6: End user survey results

Section 7: Conclusions and recommendations.

Current activitiesExpected activities

Momentum GroupEnabler GroupFoundation group

commercial launch in China

First commercial launchin South Korea

First commerciallaunch in US

StandardisationRelease 9

EU spectrum award for 2.6GHz ,digital dividend, re - farmingStandardisation Release

More trials

8

Industry and commercial trials

Pre-standard devices

LSTI : Proof of concept LSTI

LSTI : friendly customer trials

: Staged inter - operability trialsMore trials

Standards compliant USB dongles , PC cards, etc

Embedded devices, netbooks, smart phones ,

vertical- specific devices - with increasing diversity(multi-mode, multi-band support),

First wave chipset, user device

and network equipment ready for

commercial deployment

2008 2009 2010 2011 2012 2013

First TD - LTE / LTE FDD

First commercial

launch in

EU, and JapanAfter the first operator starts

launch in each country / region,

more operators will follow.


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Figure 3.1 Consumer services enabled and enhanced by LTE

3 LTE enabled services

3.1 Mobile data applications will drive LTE

LTE networks, with their high capacity, high data rate capability and low latency, will

provide a better platform for many varied services and applications. Our industry surveyindicates general agreement that LTE networks will provide the best opportunity todate for existing and new services and applications to benefit from mobile broadbandnetworks. This is reinforced by the growing support for LTE within the operatorcommunity. One major European operator is reported to be planning to move fromHSPA to LTE, without incurring the costs of HSPA+ upgrades. The industry was alsoin common agreement that increased data usage on mobile broadband networks willdrive the deployment and take-up of LTE services. In this section of the report wediscuss a number of services and applications that received the most interest in our

survey, namely general data services, voice services, video services, interactive services,location-based services and machine to machine services.

3.2 Consumer services

The industry would like certainty about where its user demand will come from.However, as with successful internet services, the certainty is not possible to predict.Figure 3.1 identifies some important LTE characteristics and potential consumerservices. Whilst it is possible to support many of these on pre-LTE networks, it is thewide-scale availability, the capacity, the performance characteristics of the access and

core networks, and the considerably broader ecosystem that will differentiate LTE fromits predecessors.

The results from the consumer survey are provided in Section 6.

Sector LTE EcosystemComponents/characteristics at service,

application, device level

Consumer services(Note: * indicates machine to

machine service)

Devices anduser interface

Application/

service

specific

Innovation in all components: OS, protocolstacks, processors, antennas, batteries, displays,large and multi-touch screens. Intuitiveinterface; accessible services Open or manageddevice platforms enable new applications,services, content, portal access

Partnering key to successDevices for broad and narrow markets

Compelling content delivered to 1000sof market segments.

Internet All that Web 2.0 comprises: communication,interoperability, sharing, collaborationWide base of data for consumer added value,marketing

Social networking, video/photo sharing,music sites, blogs, news, chat, games,travel information, community andinterest groups Internet TV, media

streaming and downloadPersonalised and discovery services


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Source: Ovum

Navigation,location

GPS and cell location dataGIS servicesMapping dataService directories

Location-based contentPresence/location informationLocation-based push-marketingIn-transit travel updates to itinerary

Transport Vehicle manufacturersGovernment agenciesIn-car entertainment systemsBespoke chipsets and devices

Vehicle service centresContent providersRadio /TV services adapted for in-car useWide base of data for consumer addedvalue, marketing

Car performance, efficiency and servicemonitoring*Automatic updates to in-car applications /data basesLocation-based real-time info. fornavigation and traffic updates*Road tolling (maybe variable)*In-car networking for entertainmentgames and media*

Financial Banks, credit card and financial sectorcompanies

Vending machines

Point of sale terminalsScanning and entry systemsAssociated manufacturing and applications

Online mobile banking and e-commerce*Integrated near-field communications*Mobile wallet for payments, entry, vending

machines, public transport*Personalised payments based oncircumstances*

Health Health and dental practices, hospitalservicesInsurance company recordsMonitoring devicesScanners and display systemsAdvice and diagnosis web sites

Mobile access to health advice sitesPersonal data access*: clinical records,scans, x-raysRemote diagnostics with video support*National and international coverage*

Journalism Newspapers, journals, radio and TV stations,blogs

Still and video cameras

Personal news reportingFirst to market blogs and news

Storage Home and server-based storage systemsCameras still and videoDevice and web storage applications, socialnetworking

Personal directory servicesRemote user auto backup for laptop,camera, audio*Auto archiving*

Security andcontrol

Building or car alarm monitoring/reporting/security systemsScanning and entry systemsCamera interfacesHeating and air conditioning controlSecurity applications built into many

services

In-building alarm monitoring / reportingCameras store and forward, or onlineHeating and air conditioning controlIntegration with control centreSwitches and cameras integrated*HD surveillance/security*

Long term, high capacity storage*

Consumerelectronicsapplications

LTE and user interfacesApplications:Home gateway integration: printers, mediaservers, TV, gaming consolesMulti-room; user-segmentedHome nodes/femtocellsCloud-based software/software as a serviceE-book reader

Remote access to home network: printing,media centre, home gateway, securityBroadband TV connectionManaged services for consumer electronicsCamera backup: still and videoOnline gamingCloud/web hosted applicationsContent rich E-book applications

Machine to

machine

See items marked with * above


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General data services and applications

General data services include online browsing, email, information searching, blogging,social networking, etc. which are already supported by existing mobile data networks

such as HSPA and EV-DO. Although these services do not require the high networkspeed and low latency connections that real-time video and gaming services mightrequire, the user experience is always improved when a true broadband service withhigher capacity and lower delay is used. The respondents to our industry survey expectLTE to complement existing network services, and expect that the improved quality ofservice will be particularly attractive to premium corporate customers and high-endconsumers. Although faster access to web content is more of a convenience ratherthan a necessity, the faster browsing speeds offered by HSPA+ and LTE networks willencourage users to view more content and feed the desire for higher performanceservices (e.g. media rich services).

Users will not only increase their mobile network usage by volume, they will alsochange their behaviours and come to increasingly rely on mobile data services as theyhave accessibility on the move. They will require information searches, news access andcommunications to replicate their use of fixed network broadband. Users, especiallythose keen on social networking, will also want to retain online connections to theirpersonal networks. Applications such as RSS feeds and instant messaging will keepmobile users updated all the time, and, with the growing use of video in news feedsand messaging, will generate increased capacity demands on the network. All of theseservices will be enhanced by improved user interfaces.

The advent of higher performing mobile broadband will lead to converged applicationsand mediaa trend which has already startedand will encourage fixed and mobilenetwork convergence.

Voice services

Although voice over IP (VoIP) capability is expected to become available on the LTEdevices, the options on how VoIP calls will be handled, including handover, requirereview and agreement. There is wide-scale agreement in the industry that legacy 2Gand 3G networks will continue for many years and interworking with these networkswill be sustained, which sets the question of voice continuity across different accesstypes. Voice services may be handled in several ways:

multi-mode devices can be configured with GSM and UMTS capability, enablingvoice traffic to be carried over an existing GSM or UMTS radio access network. Thiswill enable LTE devices to roam nationally and internationally beyond LTE coverage area.

LTE network operators who run their own GSM or UMTS networks may chooseto go down the route of voice over LTE via generic access (VoLGA). The recentlyformed VoLGA Forum aims to define a set of specifications for enabling delivery of

voice services over LTE access networks based on the current 3GPP Generic AccessNetwork (GAN) standard, which will enable mobile operators to deliver mobilevoice and messaging services over LTE access networks based on upon this.


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By means of an access controller in the LTE evolved packet core, VoIP voice callsand SMS data originated over the LTE radio interface can be routed and handledby associated GSM or UMTS core networks. This approach means that the GSMnetwork (and, in time, the UMTS network) can be gradually run down as users

migrate to LTE networks, enabling operators to benefit from earlier opex costsavings.Other technical solutions can be foreseen, such as Circuit Switched (CS) Fallback(when a voice call which is being established is handed over from the LTE networkto the 2G or 3G network) or Voice over IMS, however, the recommendations forthese have not been yet finalised within the 3GPP arena. The main issue to besolved is to find a good solution which minimises the interruption gap in the callwhich is caused by the swap between circuit and packet modes. Thus, it is highlyrecommended by the UMTS Forum that 3GPP Release 9 be not frozen before aproposal for a good solution to integrate voice in LTE is included.

VoIP over broadband, support for which is included in the LTE standards. Since LTEwill be an overlay network on top of the established 2G and 3G networks, it willbe the operators decision whether or not to implement or allow VoIP on its LTEnetwork. With voice still remaining the major revenue generator for operators andservice providers, the main push for internet-based VoIP will come from those LTEoperators which do not have complementary 2G or 3G networks and from thirdparty VoIP services, such as Skype.

Mobile network operators and service providers will wish to retain and protect voice

revenues, but will be under regulatory pressure to match mobile termination ratesagainst actual attributable network costs. The uptake of VoIP will mainly depend onan operators strategy, and of the implementation of IP Multimedia Subsystem (IMS)if a fully featured service set is required. Multi-mode handheld devices (which supportLTE for data and UMTS for voice) are expected to be the main end user product, asoperators generally consider that LTE will be used primarily for data-only services forseveral years after introduction.

Video related services and applications

Our industry survey indicates that video services, especially high quality video, will be

one of the services to enjoy greatest benefits from LTE, as they demand high capacity,high speed and low latency network support. Pre-HSPA mobile networks struggle inevery one of these aspects to deliver a satisfactory video service to end users. HSPA isalready embedded in personal media players and video handset devices, developing themarket in which LTE will provide an ideal network to support further take up of mobilevideo services.

There are two primary types of video service, namely streaming video and live video.Streaming video services normally use a cache and play method to minimise theimpact of a poor network connection, as users can accept some delay at the beginning

of the service. Some video on demand services (i.e. IPTV) allow users to download thefull video content to their local drive and play it as and where they wish. Streamingvideo services are becoming increasingly popular for mobile broadband users.


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Live video service, on the other hand, requires high network speed and low latency, andbecause of the bandwidth required, operators normally prefer to introduce live video asa broadcast service. Users who are willing to pay for live video services are not tolerantto interruptions, and they expect high quality, live video service on demand.

Mobile-TV services will include both streaming and live video services, which our enduser survey indicates will be among the most popular LTE-enabled services. In duecourse these will drive network use but operators currently do not feel that there isdemand for such services. The success of mobile-TV will depend on the operatorsevolving business model and relationship with content providers. The business modelwill, however, be subject to the current trends in the traditional broadcast markets,in which subscription and advertising based channels are under pressure from multi-channel broadcasting and internet-based content (catch-up TV, social networking,user-generated content, blogs, news sites). Operator respondents recognise that there

will be a market for high-quality mobile broadcasting to meet user expectations. Thetechnology of choice (e.g. MediaFlo, DVB-H, DVB-SH, MBMS, IMB [Integrated MobileBroadcast], etc.) will depend on region, and has still to find real traction. Those requiringa dedicated overlay network may find the business case to be more challenging. Unicastand internet-based TV and media will become extremely popular over HSPA, HSPA+and LTE. Users will have raised expectations of internet-based TV services (broadcastprogrammes and catch-up TV) because of their experience of the services available ontheir fixed network broadband internet access.

The current availability of mobile devices with Wi-Fi capability provides an alternate

means of accessing internet-based video content. In a recent global survey, Ovumfound that 89% of users who use their mobile phone to access online video did sousing their mobile network, and 20% accessed the service via a Wi-Fi connection (asmall proportion of respondents use both access methods.)

Given that Wi-Fi access has only been widely available on phones since 2007and eventhen, mainly on phones with an open OS platform such as Microsoft or SymbianWi-Fi is being adopted fairly rapidly in some markets. As mobile operators have been slowto roll out flat-rate data packages on their high-speed networks, Wi-Fi has provided acheap alternative means of accessing multimedia content on the phone. With vendorssuch as Nokia pushing Wi-Fi access on Ovi, Wi-Fi based services may become more of athreat to the operator channel in future. However, the advent of faster-speed networkscoupled with flat-rate affordable data packages should alleviate this threat to someextent, providing operators get to market quickly.

As the LTE market develops, operators will have to assess the market take-up of Wi-Finetwork devices, which may influence strategy for in-building and hot-spot femtocelldeployment, and decisions regarding incorporation of Wi-Fi capability within thefemtocell.


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Figure 3.2 Content / devices preferences

Source: Ovum - Video trends: the mobile story. March 2009

11 http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf

Figure 3.2illustrates the findings of recent Ovum research, which indicated the devicepreference for viewing different types of video content. With three of the devicecategoriesPC/laptops, personal media players and mobile phonesall having inherentmobility, the results demonstrate latent potential for mobile TV and video content. AsLTE service plans mature over the next few years, further market research can identifycontent requirements and regional differences at a more granular level.

A recent report from Cisco11projects that mobile data traffic will double every year

from 2008 to 2013, and that almost 64% of this traffic will be due to mobile video atthe end of the period. Furthermore, the report indicates that by 2013, 80% of trafficwill come from mobile devices and handsets which are connected at access speedsgreater than those offered by 3G mobile. The Asia Pacific region is projected to accountfor one third of mobile data traffic by 2013, while Western Europe exhibits the highestlevel of mobile video traffic, with a projection that 73% of mobile data traffic will bedue to video services.

The take up of mobile TV services, whether broadcast or streamed internet-basedcontent, should be monitored over the next two years. Mobile service providers will

need to segment their offerings and encourage access to free sites to generate mobilebroadband traffic, offering some advertising-supported content and providing premiumcontent packages where possible. The former will target the mass market, while thelatter will appeal to a smaller segment of users. Service offerings will also need to bepackaged for mobile phone users and those using personal media players, as viewingexpectations will be different. The availability of subscription packages which do notimpose monthly download limits will be essential.

If these services become popular, then the high traffic demand generated by suchservices will be a major driver for increased LTE rollout to increase national coverage

and to drive greater cell density.

0%

20%

40%

60%

80%

TV device

PC

PMP

Mobile phone

Hollywood

film

TV

programme

Sport Home

movie

Music

video

Adult Short

clips

63% 58% 33% 32% 27% 17% 10%

47% 43% 27% 28% 32% 19% 18%

17% 16% 11% 10% 20% 6% 9%

9% 13% 11% 7% 15% 5% 9%


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Real time and interactive services

Our end user survey identifies interactive services as another type of service that willplace demands on LTE service providers. Voice services and video telephony/videoconferencing are prime interactive real-time services. Mobile gaming is a typicalinteractive service which requires a low latency network and high capacity datastorage, and backup will require network capacity.

Mobile gaming has not been successful on the current generation of 2G and 3G mobilenetworks. The majority of handheld mobile gaming consoles choose Wi-Fi to supportnetwork group gaming, and our survey indicates that operators recognise that themarket demand for mobile gaming is low. Operators are concerned that there arefactors beyond the network which will influence the gaming community. The networkoperator will provide the gaming market with network performance and will helpcreate device availability (probably games-specific) to support the end user demand.However, the end user requirement for low end-to-end latency will also require thegaming server and the gaming device to have performance to meet the end usersexpectations. Although gaming server performance is improving as the popularity ofnetwork supported gaming consoles increases, mobile gaming device manufacturersare expected to focus on improving their device performance, especially in the areasof graphics design and game design. It is clear that the gaming industry is currentlyless focused on mobile gaming, but it has made rapid developments to improve theperformance of standalone, fixed internet and Wi-Fi consoles which have alreadybecome features for standard gaming consoles. Given their powerful performance, it is

questionable how much value mobile broadband will bring to these devices.It should be noted that mobile gaming does not necessarily mean that all gameswill require powerful handheld terminals. Internet gamingalong with many otherinternet applicationswill move to the mobile internet domain. Games such as Worldof Warcraft, Second Life (a virtual social world) and WAR (Warhammer Online: Age ofReckoning) attract tens of millions of users worldwide. With mobile broadband support,users will increasingly be able to play games away from their fixed network access. Allthey will need is a laptop/PC with mobile broadband (via a USB dongle/data card orembedded chipset).

High capacity data storage and back up capabilities are already being built into digitalcameras and video cameras with the introduction of HSPA into the devices. Otherapplications in real-time monitoring and surveying services will also benefit fromimmediate download of data to server and are being considered by the vendors andservice providers.

Location based services

A major difference between mobile broadband networks and fixed networks is that theformer can be subject to location changes. This provides a huge opportunity for locationbased services (LBS) which have very broad potential to integrate with high performancemobile services. General LBS include the updating of maps, provision of information onthe location of shops, service points, etc., depending on the location of the user.


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Figure 3.3 Business services enabled and enhanced by LTE

As LBS become more intuitive to use, require regular updates when on the moveand have access to the sophistication of applications like Google Maps and GoogleEarth, they are expected to drive network traffic to considerable volumes. Operatorsare strongly interested in LBS as a route to providing true personalised services, and,

with true broadband connectivity, they will be able to take advantage of devices withembedded GPS to offer their own and third party services, e.g. using Google Maps or similar.

Services such as these raise the possibility of new business models to be developed forcharging users or specialist service providers for use of network capacity.

3.3 Enterprise services vertical sectorsWhilst the business sector will use many of the consumer services, the flexibility tooffer new services to vertical markets (as shown in Figure 3.3) will require service

providers to reassess their approach to marketing, which includes many non-traditionalmarkets and service delivery.

Sector LTE EcosystemComponents/characteristics at

service, application, device level

Business servicesNote: * indicates machine to machine

service

Refer also to Figure 3.1 (consumer services). Many components, applications and servicesidentified in the previous consumer service review also apply to the enterprise sector.

Devicesand userinterface

Applications, services and content,portals and devices developed forspecific vertical market sectors.

Industry-specific applications (based onstandard architectures): health, logistics,emergency services, retail, finance, etc.

Internet All that Web 2.0 comprises:communication, interoperability, sharing,collaborationWide base of data for consumer addedvalue, marketing

Corporate VPN accessService delivery on the web - contentformatted for mobile broadband deliveryTransaction services with customers andindustry partnersPersonalised content for customersTargeted marketing

Navigation,

location,transport

GPS and cell location data

GIS servicesMapping dataService directoriesDispersed enterprise resources

Location-based content

Presence/location information*Location-based push-marketingIn-transit travel updates to itineraryFleet monitoring speed, location*Logistics control*Health and safety (driving time)*Public transport in fleet services*Road tolling*Emergency service command and control

Nationalutilities and

Emergency services; utilities Live relay of incident*Telemetry*


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Source: Ovum

Note: * Indicates machine to machine service

Machine to machine services

Machine to machine communications services are currently used in public safety,finance, healthcare, utilities, etc. They require only low speed, low capacity network

support, for which GPRS/EDGE and 3G networks are well suited.Our industry and end user survey indicates that machine to machine services willnot be a major driver of LTE uptake. There is general agreement that low capacityrequirement applications will stay with GPRS/EDGE and 3G networks for many years.Any machine to machine applications which require a high capacity LTE network areexpected to develop over time, but specific examples are not identified, and currentHSPA networks should be able to provide a good data service for emerging machine tomachine services. Ultimately, service costs and total cost of ownership will influence thedemand for and take up of LTE machine to machine services.

services

Financial Banks, credit card and financial sectorcompanies

Vending machines

Point of sale terminalsAssociated manufacturing andapplications

Online mobile banking and e-commerceIntegrated near-field communicationsTransaction service

Health Mobile access to health advice sitesMedical devices and recordsHealth and dental practices, hospitalservicesInsurance company recordsMonitoring devicesScanners and display systemsAdvice and diagnosis web sites

Full-scale clinical records scans, x-rays,personal data access*Remote diagnostics with video support*National and international coverage*

Journalism Video and audio reporting tools adaptedfor mobile deliveryHigh definition capabilities

High speed/low latency news gathering(without news gathering satellite services)

Storage ,security andcontrol

Corporate storage networksIn-building alarm monitoring/reportingScanning and entry systemsCameras store + forward, or onlineHeating and AC control

Back-up storage for field workforce*Corporate security/CCTV archive*Integrated with control centreSwitches and cameras integrated*HD surveillance/security*Long term, high capacity storage*

Industryapplications

Interfaces for telemetry devicesRemote polling systems

Remote office workingPush-to-talk/videoEmergency services support

Machine tomachine


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It should be noted that machine to machine users are not the usual business orconsumer groups. Their network requirements are often constant and, if the capacitydemand is high, this would lead to high charges on a standard tariff. However, ifoperators have predictable demand, they may be flexible and offer service to these

users at a lower price, which could encourage machine to machine services. An exampleof public safety service can be considered with regards to the control and data fromthousands of CCTV cameras being gathered. Each camera may demand a constant 1-2Mbit/s support which, as a proportion of a cells uplink capacity, equates to about onefiftieth for an LTE cell, one tenth for an HSPA Evolution and one fifth for an HSPA cell,this improvement being one of the advantages of the lower interference inherent inOFDM technology used in LTE, compared to W-CDMA.

The mobile operator community perceives machine to machine as a long term strategicmarket opportunity for LTE and, although not one that will initially drive high volumes

of product, one which provides an opportunity for mobile network operators to expandtheir market. The vision for machine to machine is that LTEs higher capacity combinedwith a large penetration of LTE modules in various device form factors in the consumermarket and in several vertical markets will generate a huge market opportunity formachine to machine connectivity services. This vision may only fully materialize in 10years from now, but is a perspective that is certainly in operators minds.


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Figure 4.1 Overview of chipset vendor roadmap

Source: Ovum

200809: in-house development before being commercially readyChipset vendors are in general agreement that they will initially introduce LTE/HSPA+and LTE/EV-DO dual-mode chipsets to satisfy the needs of the initial multi-modedevices. Multi-mode chipsets for the Chinese market will need to include TD-SCDMA.In the future it is expected that LTE will be embedded with EDGE, UMTS and CDMA,but the vendors would not be drawn on specific timescales as, after the current initialdevelopment phase, their developments for further multi-mode chipsets will depend ondevice vendors requests, which are in turn driven by the demands of network operators.

The testing of LTE chipsets will continue through 2009 as new variants are released.

During 2008, vendors were focused on frequency division duplex (FDD) mode and theyexpect to have hardware support for both FDD and time division duplex (TDD) modesin 2009. Chipsets are baseband products, so current tests are conducted independentlyfrom frequency bands and the majority of vendors use the 2.6 GHz band and a 20MHz channel for test purposes. Tests for other bands and channel bandwidth will beconducted with device vendors in 2009. In terms of MIMO support, it is commonlyagreed that 2X2 MIMO for the downlink will be a popular choice for initial LTEdeployment and hence the initial focus for chipsets. It is expected that general userdevice will have up to 4X2 MIMO support, allowing improved diversity performance,

with an associated 2x data rate increase, whilst 4X4 MIMO can be introduced forfemtocell devices.

Engineering chipset samples are expected to be available in mid-2009. The first fullystandards compliant, multi-mode commercial chipset products will become availableas early as the second half of 2009, or early 2010 at the latest. Pre-standard chipsetscould be made available 23 months earlier if device vendors indicate an intentionto bring early, pre-standards devices to the market first. Chipsets for LTE femtocellswill become available in the second half of 2009. The many options for multi-bandsupport and MIMO configurations will be reviewed during these early days, as chipset

and device vendors seek to achieve the right balance between performance, size,power consumption, product volumes and costs. It is clear that different devices will beneeded for different markets.

2008 2009 2010

Test & trial

First commercial

readyData only device

support

Development

Embedded devicessupport

2012

Test & trial

Small handhelddevice support

Test &

trial

2013

Current activitiesExpected activities

2011


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2010: standard-compliant chipset ready

It will take the vendors very little time to finalise their chipsets once the standards areratified. Initially, multi-mode chipsets will be used on data-only devices, such as USBdongles and PC data cards. Once the initial releases are available, the time to implementnew standards-compliant data-only devices will be reduced and new versions shouldbecome available within three to six months of the initial chipsets. Chipset vendorswork very closely with device vendors to increase the level of integration for embeddeddevices and small handheld devices. The timing of these chipsets will depend on thedevice vendors roadmaps.

LTE femtocells will appear in the second half of 2010, with deployment determinedby the operators strategies and the popularity of LTE devices. Some operators willchoose femtocells to compensate for the lack of network coverage, but for this to bea successful strategy will require LTE devices to be adopted to create demand for fem-

tocells. Dual/triple-mode femtocell chipsets (incorporating LTE, Wi-Fi and other cellularstandards such as EV-DO or HSPA+) are expected by the end of 2010 or early 2011, withcommercial availability in mid-2011. Size and cost of these devices will be critical, asthey will have to meet consumer expectations for form factor and price.

Impact on the ecosystem

Chipsets are a very important part of the ecosystem. According to the chipset industry,standard-compliant product will be ready as early as the second half of 2009 or thefirst quarter of 2010 the latest. This timeline will be a problem for user device vendors

who wish to have standards-compliant devices ready for early LTE deployment. Theycan however use pre-standard chipsets for initial LTE devices, such as USB dongles andPC cards. There should be a low impact on the main commercial deployments sincethese devices are used only to support data services, and given that such devices havea simple form factor, vendors can quickly ramp up production to introduce standard-compliant devices.

It is expected that a standard-compliant LTE device will initially become available withthe smallest form factor i.e. a USB dongle, but it will take another six to nine monthsfor vendors to test and integrate an LTE chipset into embedded devices. For small hand-

held devices, the test and integration period will be at least 1218 months. Issues suchas size and power consumption must be solved before small handheld devices can besold to the general consumer.

umts forum report#42 june 2009

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