Throughout the history of wireless data network and technology, one of the most interesting aspects is the occasional emergence of disruptive technologies. A typical disruptive technology often promises significant improvement in efficiency and/or affordability. More importantly, these new technologies sometimes suggest the possibility of a new business model for new entrants that would otherwise be unfeasible or uneconomical. Incumbent carriers, on the other hand, ponder on the impact and have to decide whether it is a real threat or just hype. In the midst of real technological advances, optimistic projections from advocates, and complex dynamics of business decisions, it is often difficult to make the best strategic decision based on partial information.

It is important to sort out the distinguishing features and capabilities of various evolving and emerging wireless technologies based on the improvement to spectral efficiency, capacity, and the technology’s ability to support key applications.

Service providers face major obstacles for deployment of these disruptors, of course, so the evaluation criteria must include compatibility, cost, and expected time-to-market. Just a few of the technologies providers must evaluate include:
• CDMA 2000 family.
• UMTS/HSPA family.
• WiMAX for both back-haul and access applications.
• Fixed Mobile Convergence in the evolution from 3G to 4G.

There is one key question in evaluating each of these technologies that highly impacts the OSP: how will wireless data impact the wireline business?

As we move toward convergence of wire and wireless, will there be synergies between the evolving wireless data service and wireline services? Where and how do these traditionally separate networks and services benefit each other? Is there going to be a true Fixed Mobile Convergence, or will they remain segregated networks in the future?

Cellular Technology 101
To understand the implications of this big question, let’s review with a little background on the Cellular Network. Cellular bands lie at much higher frequencies than FM, and within each band there are a limited number of channels, each of which can be used for a different call. Planned cellular reuse allows this limited number of channels to be used over and over again.

Each call is broadcast by three cell sites with sectors aimed at the center of the cell. Signal strength falls off very rapidly outside the cell, allowing efficient re-use. Seven cells together, using seven total frequency sets, forms a cluster. Cellular clusters are repeated over and over in all directions like a cellular honeycomb. Seven frequency sets (A-G) can cover the entire country. (See Figure 1.)

Each cell site base station is connected to a Mobile Switching Center (MSC). As an example, Verizon Wireless has approximately 40,000 cell cites connected to approximately 200 MSCs.

Centralized mobile switching centers monitor what cell you are in so the MSC knows where to find you if someone calls. The MSC also monitors your signal strength from each of the three base stations serving the cell, plus your signal strength in adjacent cells. In addition, the MSC passes off your call from one cell to another as you move. (See Figure 2.)

Converging Opportunities
Today, service providers want to be able to provide and bundle all the telecommunication needs of their customers. That involves video, voice, data, and cellular. To do that they are presently maintaining several backbone networks. These networks are expensive to build and maintain as well as making crossover of services difficult for customers.

As the network evolves into an IP/MPLS core network, the real opportunity exists to converge these separate networks into one backhaul/backbone network. As a result, service providers are now working on new software and platforms that will be required to run these networks. When complete, this converged network will greatly reduce CapEx and OpEx, and increase reliability.

This increase in reliability is even more important as service providers offer enhanced services. It is estimated that 60% of dropped calls are due to the backhaul network. In addition to lower costs and increasing network efficiency, an FMC network will provide integrated applications that allow users to have their entertainment and communications on any of their devices. This of course is the Holy Grail. End users can use their TV to answer the phone and watch their favorite show on their cell phone. The possibilities are endless.

Spectrum for the Future
Currently, there are two separate cellular platforms:
1. CDMA (Code Division Multiple Access) used primarily by Verizon Wireless.
2. GSM/UMTS (Global System for Mobile Communications /Universal Mobile Telecommunications System) used by AT&T and other international wireless service providers.

Both AT&T and Verizon are looking to develop and deploy 4G or LTE (Long Term Evolution Networks). These 4G networks will represent a significant increase in bandwidth and much shorter latency over today’s 3G networks. More network bandwidth equals more services which means more revenue per user, of course.

Increased bandwidth demands also require increased spectrum. To meet this demand in the next 3-5 years, in early 2008 the FCC provided additional spectrum via the 700 MHz auction (Auction 73, 01/24/08 - 03/18/08). The 700 MHz Band is part of the 698-806 MHz band which has been occupied by television broadcasters and is being made available for new commercial and public safety services as a result of the digital television (DTV) transition.

Of great interest was the C-block spectrum, auctioned by the FCC in early 2008. This was considered a new and disruptive idea because
of the Open Access provisions surrounding it. The provisions allow an open platform for devices and third-party application developers. This means network operators will be obliged to accept and make operable any device a consumer chooses with any application provider seeking network access. With the success of the C block auction, the open access wireless network is gaining a lot of momentum.

With open access, end users will need an open handset, so they will no longer be required to buy a wireless device from their wireless service provider. This will create opportunities for non incumbent players in a similar way the Carter Phone Decision allowed non-Bell network equipment connection to the PSTN.

One of the early proposed open access platforms is called Android, an initiative pushed by Google, and backed by the Open Handset Alliance. It uses a Linux-based software framework, with an Integrated browser GSM phone, 3G/EDGE GPS, Bluetooth, Wi-Fi, Compass, and Camera. After a number of successful demos in mid-2008, T-Mobile announced the launch of the G1 Android (made by HTC) in October 2008.

Another interesting development is the impact of the D-block spectrum on our industry. The D-block is intended to be used as a shared public safety and commercial network. However, the lack of industrial interest and the subsequent failure to auction this block over the minimum requirement forces the FCC to re-think the strategy of how to create a public emergence and safety wireless infrastructure.

In September 2008, the FCC issued the Third Notice of Proposed Rulemaking, which suggested re-auctioning of the D-block. Part of this new D-block auction will include LTE-based system and another part for WiMAX-based system. However, it is not clear how the FCC under the new administration would proceed with the new D-block auction.

The service provider would build a Shared Wideband Network to cover both the shared public safety and commercial network which would give double the spectrum. This network would require an aggressive rollout and require a very high level of reliability and security since it would be used in part to serve public safety. Involvement in the area of public safety would also include requirements set by various governmental agencies. However this high reliability and secure network may be of interest to corporate users. Also in areas underserved by traditional wireless networks a new infrastructure can be used for both commercial and public safety communication.

FMC for Real
Given all of these fantastic technologies, it is clear that Fixed Mobile Convergence (FMC) will be an important platform in the very near future. FMC is a term whose meaning has evolved over the last few years. While the initial intention is to have FMC describe any technology that allows cross fertilization of both the wire and wireless industry, this term has recently become synonymous with two technologies: Wi-Fi FMC and Femtocell FMC. With FMC, cellular users can access cellular service via a broadband connection while they are at home. When they move outside their home, it becomes a regular cellular service.

At this time, FMC has two flavors:
1. Wi-Fi FMC. Wi-Fi FMC is used in the context where wire operators (including telephone companies and other broadband providers such as cable) offer access to their broadband network via a Wi-Fi access point located inside a home, a small office, or a hot spot. The Wi-Fi FMC service includes a dual mode handset that allows normal cellular service outside of the vicinity of the Wi-Fi coverage area. The advantage of Wi-Fi FMC is that Wi-Fi access points have become inexpensive common household items. However, providers of this service need to overcome the scarcity of dual-mode handsets.

2. Femtocell FMC. The second type of FMC also allows use of the broadband line with a wireless access when the user (or multiple users) is inside a home or small office. However, the technology behind this type is a miniature cellular base station, called femtocell (or Home Enhanced Node B, in 3GPP terminology). This low-cost, low-power, base station (see Figure 4) operates in the normal licensed cellular spectrum, and replaces the radio access of macro base station when the user is inside the house, but automatically switches to the normal cellular base station access when it senses that the handset is out of the short range (using 100-200 feet). They allow end-users strong in-home cellular reception, which is one main reason mobile customers switch service providers. A main advantage of femtocell over Wi-Fi FMC is that a normal handset is used. However, the cost of femtocell will still need to come down to $50 to be economically attractive.

With an FMC platform, a user can save money, have better signal quality while inside the home, and consider fixed mobile substitution for their landline phone. An FMC platform also allows providers some advantages. It allows providers to target additional revenue from end users while finding backhaul network cost savings.

Undoubtedly, the wireless network will continue to evolve since people want mobile solutions for anytime, anywhere communications and entertainment. With the evolution of wireless technologies coming such a long way, many argue that there will soon be three broadband pipes that compete for share of the digital home:
1. FTTH/FTTx/ADSL
2. HFC
3. Wireless

Though there may come a time when wireless is the third broadband pipe into the home, we still have a ways to go. Given the advanced pace of current FTTx technologies and market penetration, it’s unlikely wireless technologies can compete with service offerings from cable MSOs or carriers such has Verizon’s (FiOS) and AT&T (U-Verse). That said, the future is never entirely predictable. Providers will continue to invest in FMC, and new disruptive technologies may fight their way onto the scene to change the playing field forever.

Right now, however, the implications of FMC networks to the wired infrastructure are important to keep in our sights. Wireless will continue to forcefully complement service provider offerings and be a source of increased ARPU now and well into the future. 

Ernie Gallo is Network Product Integrity Director for Telcordia Technologies. He has more than 27 years of experience in telecommunications. For more information, please contact him via email egallo@telcordia.com.

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Do You Know Your Mobile History?

When the FCC established cellular in 1982, it was called first generation cellular or 1G – Analog Telephone Service. There were two carriers in each region, wireline and non-wireline companies with 5,000 base stations per carrier to provide nationwide coverage. As we all know, 1G cellular service popularity far exceeded FCC expectations, and by the early 1990’s AT&T had introduced the nation-wide no long distance calling plan.

To expand cellular to the masses and provide more competition and lower cost service, the FCC auctioned the PCS band licenses. The second generation or 2G – Digital PCS had 6 bands that were auctioned in each region, including infamous pioneer preference C block. To handle the increase in customers, 20,000 base stations were needed per block to provide nationwide coverage.

2G was a big success. (See Figure 3.) In December 2006, there were 230 million users in the U.S., $125 billion/year revenue, 200,000 base stations, $15-20 billion/year CapEx, and 250,000 Wireless Co Employees. Not bad for a business that started in 1982.

As the cellular business grew, service providers were looking to expand the average revenue per user (ARPU), and while cell usage and minutes were increasing, the ARPU was staying flat. Service providers were looking for new services to offer and new revenue streams. To offer services such as GPS Navigation, Streaming Video, and Music Downloads, additional bandwidth was needed so the 3G Network was developed.

P.S. There will not be a quiz on these facts.

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Two Billion+ 3G Subscribers by 2013

A new report from Parks Associates finds worldwide growth in the number of 3G subscribers will motivate service providers, under pressure to maintain customer satisfaction and build revenues, to expand on traditional voice offerings to include converged fixed-mobile services.

The report Fixed-Mobile Convergence: Consumers and Business Models predicts that the number of 3G subscribers will exceed 2.5 billion worldwide by 2013, with more than 1 billion in Asia alone. The tremendous expansion of this large service population will catalyze the development of fixed-mobile convergence (FMC), creating new service options where users can access video, audio, and community offerings via mobile devices once limited to traditional voice applications.

Demand for personalized services will expand mobile services from traditional voice to multimedia applications. Parks Associates predicts operators will rely on femtocells to realize FMC as these devices enable them to better monetize their 3G infrastructure.

Fixed-Mobile Convergence: Consumers and Business Models examines the current state of 3G deployments worldwide and the drivers for fixed-mobile convergence. For more information, visit www.parksassociates.com.

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