A Primer on LTE

LTE or Long Term Evolution is a 4G wireless technology and is considered the next in line in the GSM evolution path after UMTS/HSPDA 3G technologies. LTE is espoused and standardized via the 3GPP or 3rd Generation Partnership Project members. 3GPP is a global telecommunications consortium having members in most GSM dominant countries. 3GPP specifications are based on GSM evolution path of wireless communications. GSM is the most prevalent wireless standard in the world and has maximum number of subscribers globally.

The impact of LTE is so big that even powerful carriers which were on the alternate CDMA path like Verizon Wireless of United States, have decided to go with LTE in their next generation 4G evolution. Firms like Verizon and MetroPCS of USA have all but dumped the CDMA technology path almost dealing a blow to the CDMA owner Qualcomm, although the latter is much more diversified so it is not really short of business models.

LTE vs WiMAX
Whereas WiMAX emerged from the WiFi IP paradigm, LTE is a result of the classic GSM technology path. LTE is behind in the race to 4G with WiMAX getting an early lead with the likes of Sprint ClearWire and several operators in Asia opting to go with WiMAX in the near term. So where WiMAX has a speed to market advantage, LTE has massive adoption and GSM parenthood to back it up.

It is widely believed by market analysts that LTE will win ultimately but WiMAX will find adoption in frontrunner communities and niche business models which tend to take up technology faster. WiMAX vendors will have you believe that speed to market is too important to ignore. History suggests otherwise in case of wireless industry. It is also believed that ultimately, wireless industry will figure out a way to wed the two 4G technologies so the end product in few years might be a nice amalgam.

So ultimately, what standard an operator uses might be a moot point in the long run. The inter-operability would be just too great to get hung up on the wireless standard. The fact that both WiMAX and LTE are all-IP means that a cross-connection will be a piece of cake at some point in future.

In terms of speed, Fixed WiMAX lacks LTE in speed but Mobile WiMAX may catch up with LTE on this front. For an overview on WiMAX, refer to our post “A Primer on WiMAX“.

LTE Technology
LTE builds on 3GPP family which includes GSM, GPRS, EDGE, WCDMA, HSPA (High Speed Packet Access) etc. LTE is an all-IP standard like its peer WiMAX. LTE allows for rich applications and business models which include ultra-high speed voice, video and data. It also enables integration with the classic internet infrastructure which is all-IP based.

HSPA (High Speed Packet Access), the 3G GSM standard popular over near-term, offers uplink speeds of 11.5 MBPS and downlink of 28 MBPS. Whereas LTE offers 75-100 MBPS Uplink speeds and 250-300 MBPS downlink speeds. Compare this with 20 MBPS U-verse speeds of AT&T wired broadband network U-verse and 50 MBPS speeds in Verizon FIOS TV service. In a nutshell, LTE will beat the fastest wired broadband delivery High Def TV today (in USA) by order of 1 to 4 or 1 to 2 depending on which wired broadband we are talking about. That said, many carriers like AT&T believe that HSPA and its faster cousin HSPA+ will compare well with early WiMAX speeds and so there is no rush to LTE yet for these kind of carriers.

Some key characteristics of LTE are described below :

• Increased Data Rates and High Efficiency : LTE is based on OFDM Radio Access technology and MIMO antenna technology (just like its cousin WiMAX) which offer excellent modulation technique for achieving powerful spectral efficiency.  Think of the OFDM wireless spectrum as a series of very fine and narrow wireless  bands and each band gets allocated to various service providers.  LTE offers higher data transmission rates while utilizing the spectrum more efficiently. This translates to an ability to support many more multitude of subscribers than is possible with pre-4G spectral frequencies. LTE is 2 to 5 times more efficient in spectrum utilization than the most advanced 3G networks.
• Radio Planning : LTE signal goes far and wide and covers a larger geographic territory. LTE signal is way faster than the existing wireless transmission resulting in higher user response times.
• IP environment : LTE is all-IP which permits new enhanced applications like real time voice, video, gaming, social networking and location-based services.  The concept of wireless ubiquity comes alive with LTE processor chips in everything from netbooks to mobile phones to consumer devices; all these devices talk to each other seamlessly and effortlessly.
• Inter-operability : LTE IP network co-operates with circuit-switched legacy networks resulting in a seamless network environment and signals are exchanged between traditional networks, the new 4G network and the IP-based internet seamlessly.

LTE Applications
LTE will enable applications previously unheard of. Wireless ubiquity is a given. All consumer devices. communication and computing resources may be enabled on the wireless network courtesy of chipmakers like Intel who are eagerly building in WiMAX and LTE in future chipsets which will be embedded in all sorts of technology devices that one can imagine.  Social Networking and human-technology interaction (HTI) will take on a new meaning. Human-technology interface and resultant communication could be as seamless and as effortless as the Tom Cruise movie Minority Report makes it out to be (ok we are bragging a bit now).

Web 4.0, if you will, may just comprise the Wireless as an integral element of the hyper-connected world via LTE and WiMAX enablement.  Broadband TV might not need wired cables anymore and new MVNO service providers may emerge who enable wirelessly driven TV and broadband internet. Business users might exchange massive amounts of data while on the go at the flick of a button (or touch). Interacting with your Flickr and Picasas photo streams from mobile devices might be a breeze. Games will cross wired / wireless domains and mobile location will figure in the gaming context naturally. Location-based may take a new meaning with location being the true IP beacon determining the application context in a flash, thereby offering a ultra-personalized mobile experience to the user.

LTE Timeline
Operators are just now fully deploying 3G using WCDMA or UMTS/HSPDA. WiMAX is coming in via ClearWire in USA and several operators like BSNL in India and many others in Middle East and Africa. The first LTE deployment in USA is with relatively tiny MetroPCS which may just beat the big 3 LTE carriers (AT&T, Verizon and T-Mobile) in the race to 4G. Verizon is claiming 2010 LTE deployment and AT&T is taking a more patient approach and states that LTE is in 2011-12 timeframe. China is unique, as usual. They have taken the TD-SCDMA 3G route which is a “unique to China” standard.  Chinese 4G strategy is not clear still. India is more LTE centric like the West with major carriers like Airtel and Vodafone adopting the LTE route. LTE in India is many years away as India’s regulator TRAI has not even awarded the 3G spectrum licenses yet.

Japan, we won’t even go there..

ROI on Mobile Marketing Campaign

BMW presented a case study at the Mobile Marketing Forum in London. BMW shared how a MMS campaign in Germany, promoting the use of winter tires sent to 117,000 mobile consumers, generated $45 million in sales – or a return on investment of approximately $750 dollars for every dollar spent.

This makes a strong case for any and every kind of company in product or service space to add mobile to their marketing mix.

 

4G still ways off

In spite of the massive 4G hoopla the world over, our estimate suggests that LTE-based 4G is still a good bit ways off. We expect 2011 when we see some sporadic strength in 4G business models where real money starts coming in with customer adoption. Although carriers like Verizon, Sprint, MetroPCS in USA and others in Europe and Asia are planning LTE based 4G launches beginning this year, customer adoption may remain low and return on 4G investment will take time. 2012 is a good bet where we see LTE 4G beginning to take hold.

Till then, the “other” 4G technology ie WiMAX does have a time to market advantage. We expect substantial uptake in WiMAX until LTE comes around. However, we think that ClearWire and Sprint (and telecom equipment makers) will ultimately find a way to marry WiMAX and LTE and in 5-10 years we may have either a single dominant standard or at least cooperating WiMAX and LTE environment where devices and networks communicate at the IP layer easily.

As to 3G, China has just now come out with 3G licenses and countries like India are way behind on 3G – the license auction for 3G in India got postponed to later this year due to economic turmoil and upcoming General Elections. So WiMAX and LTE on a mass scale still look like distant dreams. Fact is that 3G and HSPDA is very good for many high speed apps which the customers want today. The business models around 4G are not even visualized so far. Of course all our thoughts exclude countries like Japan and Korea – where wireless is generations ahead….

Areas of mobile marketing that need attention in 2009

On a global perspective, top three areas of focus are :

1. More mobile knowledge experts.
2. Greater case study sharing. &
3. Creation of guidelines around mobile measurement.

Mobile knowledge experts

There is a huge need in the global mobile marketing industry to pass our collective mobile expertise off to new entrants to expand the knowledge base of those able to evangelize.

More case study sharing

Already a strong proponent of information sharing, the MMA encourages all marketers to continue to share their successes and failures regardless of size of campaign, target demographic or results.

Measurement

Yes, mobile has been challenged with creating consistent metrics and reporting in order to drive greater spend in the mobile channel – like all media in its early days.

The MMA has launched its Measurement Committee and hopes to release its guidelines forMobile Web Measurement early in the third quarter of 2009.

Content Stores will be next

Today I was interacting with a mobile media expert and while talking suddenly it struck me that lot’s being talked about User Generated Content (popularly referred to as UGC). However, different people have different opinions on whether UGC will have a profound impact in times to come on when, where and how it is produced.

I think, as there are app stores springing up around the world…the day is not far when operators will start their own content stores as well, where-in people will be able to submit their content for public voting, popularity and downloads. Which ever UGC becomes famous, will be adopted by operator or media companies on revenue share basis with content providers…as I feel ultimately quality UGC provider will definitely dominate and will stand out against all other service providers who provide generic services like voice, text etc.

War on Mobile App Store Front soon…

I was at Nokia Forum yesterday in New Delhi while it was being organised by Nokia parallely in Malaysia too. Nokia has started organising these forums/ code camps regularly now to connect with third party developers who come out with very innovative applications every now and then from around the world.

Mostly present there were talking about how different manufacturers like Research In Motion (RIM), Google Inc., Microsoft and Nokia etc. are all tryting to get a pie of the app store market share, a trend started by Apple. Most of them agreed that Apple actually told the world that phone is not just for talking or sms but a lot more then that, through it’s iPhone and the app store. However in India, iPhone is not as popular in absence of 3G networks.

Now, other companies like RIM and Nokia are going to leverage that customer knowledge (imparted originally by Apple)  to monetise the huge opportunity available now as Nokia and RIM both have far greater market share in India then Apple’s iPhone.

Research in Motion (RIM) in October 2008 announced two major distribution initiatives for smartphone applications for its BlackBerry handheld, including an online store called BlackBerry Application Storefront and an application center. RIM began accepting applications and content from developers for inclusion in the storefront in December and the store is scheduled to launch this month. The storefront will allow developers to set their own prices for applications. RIM is working with PayPal, an online payment service, to provide consumers with a way to pay for applications from BlackBerry smartphones.

Nokia is launching their app store on OVI starting first from western world by end of first quarter and later entering in India by around mid of this year. Nokia is also tying up with various payment platforms including credit card payment gateways online for cutomers to pay for applications.

A key question for technology executives is what value, if any, do these app stores provide to business users? So far, experts say, the usefulness for business appears to be limited. But with the influx of new players in the market, the number of business applications might increase.

Top Trends in Mobile Space

Next 2-3 will see radical changes happening in mobile space, making smartphones, netbooks and yet-to-be introduced devices even more indispensable parts of our lives. Here I am quoting ( from CIO Zone) some of the developments in US and will also try to give my views from India’s persective that will power this next phase of evolution?

Long Term Evolution (LTE)

The so-called fourth generation of mobile (4G) is expected to be rolled out across North America over the next three years, making it possible for corporate users to run business applications on their devices simultaneously with Voice over IP (VoIP) capabilities. Where as in India 3G is yet to roll out for masses. People are eagerly waiting for the same as slowly people are switching on to smart 3G phones.

WiMax

As LTE and WiMax networks are deployed in the U.S. through 2012, expect to see more netbooks and laptops equipped with built-in radio frequency identification (RFID) and wireless support. We sometimes get queries in India for development of applications in healthcare etc. but simple are not able to serve these clients due to unavailability of wimax infrastructure India wide.

3G & 4G interoperability

Sprint has developed a dual mode card which will enable mobile device users to work on both 3G and 4G networks. Other carriers are expected to follow suit.

Smartphone applications

Third-party software vendors will increasingly make enterprise applications available for smartphones, including inventory management, electronic medical records management, warehousing, distribution and even architectural and building inspection data for the construction industry.

GPS

Global Positioning Systems will increasingly be used to identify end users by their whereabouts and also to analyze route optimization for delivery workers and service technicians.

Security

As new and different types of mobile devices are introduced, corporate IT departments will find it increasingly challenging to identify and authenticate individual end users. As such, expect to see a combination of improvements in both Virtual Private Network (VPN) software and hardware-based VPNs to support multiple device types.

Tody, I was in Nokia Forum and there I came to know that last year, they had selected an pplication in International level competition where in with the use of cell-phone, you can convert your television into a touch screen device. These are the kinds of technologies that will change the world and bring all kinds of functionality of operating virtually anything, right in the hands of the mobile device owner.

Video Streaming on Mobile in India to get a major boost soon…

Yes. You read it right…video streaming on mobile will be a norm soon in India as the latest findings say that Indian internet users are vehemently using their mobiles to keep themselves connected to Internet. Thirty-eight million Indians use their handsets to browse the web as of today. The number of people using their mobile handsets to access the web is now over four times those using a PC.

I was talking to a senior executive recently from USA and he said that opportunities in Indian market are plenty as not even 10 million  people in India have internet access and many businesses are still not on internet. So, they would like to penetrate India fast so as to cash the opportunity in time. And now with the above study, opportunity has gone over board as business are required to be taken from paper to internet and then onto mobile or should I say…directly from offline to wireless. Amazing.

The findings based on a report of the Telecommunications Regulatory Authority of India (TRAI) also stated that even as net connections fell in the year 2007, the number of people accessing the web on their cellphones increased from16 million to cross the 38 million mark. This included both CDMA and GSM users logging on to the Internet to surf, check email etc, among whom the number of ‘active’ Internet users in India currently stands at 32.2 million. The average usage per week on the traditional web stood at 2.4 days. Access using Mobile web surprisingly stood slightly higher at 2.7 days per week.

We have been getting queries as to how we can help companies to stream their online videos to mobile and these company executives are more excited then I am, to access their online videos on mobile any time, any where on the go…If all goes like this, time is not far when all companies, if not all Indians will be having their own mobile videos.

How will netbooks affect mobile marketing?

The growing popularity of netbooks – smaller, lighter and cheaper laptops with almost similar Web capabilities as big-screen versions – is set to change the world of mobile marketing and media.

Brands such as Acer, Hewlett-Packard and Asus have already launched netbooks priced between $300 and $400. Dell is expected to debut its own version, although there is no inkling that Apple may come out with its netbook.

According to Pholop Solis, ABI principal analyst for mobile broadband in Oyster Bay, NY, A netbook is easier to carry out of the home because it is smaller and lighter, and it is also easier to tote around the home. Also, some people are buying them to use for email and presentations when they travel for business so they can travel light. The popularity of netbooks is possible because of their price range – mostly between $300 and $400, so far.

ABI Research expects netbooks’ sales to more than double to about 35 million units in 2009, and for that to continue to climb in 2010. Some of these will be purchased as secondary devices to get on the Internet by consumers who would not have bought a second laptop.  Some of them will be purchased by consumers as a replacement for an older laptop instead of buying a new laptop.  Today’s netbooks resemble small laptops – they practically are except that they have processors that are less powerful. Early movers in netbook space have been Acer and Asus as two main leaders in the market.

Netbooks are increasingly being offered with mobile broadband and increasingly coming with GPS as well, these devices certainly bring opportunities around location-aware services and advertising.  They will used while walking the way smarpthones and mobile Internet devices will be used, but they certainly will be used on-the-go more often than laptops.

Mobile devices, in general, are expanding from just cellular handsets to include laptops, netbooks, mobile Internet devices (MIDs) and even mobile consumer electronics devices – things like game devices, portable media players, cameras and camcorders are gaining mobile broadband connections for data-only to increase their usefulness. 

In this context, smartphones with better browsers, netbooks, and MIDs are filling the need to be able to access the Internet from anywhere on just the right device, depending on the person’s preferences and needs. This means Internet will be consumed, via the smartphone and netbook channels in the longrun. On-the-go, various devices will fill the need to get on the Internet. However at home, nothing can fully replace the PC.

How should marketers and advertisers react to this phenomenon?
The fact that Internet access is being done more and more from anywhere means that advertisers have to take this into account. 

Location-based advertising is one part of this.  Properly done, mobile advertising can be very useful to people who are already searching for places and using services in the context of their current location and next destination.

(Excerpts from Mobile Marketer)

IPhone – an operator’s friend or a foe…

Strand Consult laid out, why having the Apple iPhone on your network might not be the best thing in the world. In their own words:

Strand Consult is not in the business of creating hype around technology, our business is to explain to mobile operators how the future market will evolve and how to make money for their shareholders.

…so their ten points on the iPhone are well worth reading in this article. You can read the details here, but their main topics are given below, with little notes of my own thoughts on each area.

1. The iPhone attracts a limited market segment, Apple’s goal was a global market share of 1%. But despite this, the iPhone is not a mass-market product; it is a product that attracts a niche segment. In India too, there are not many serious takers of iPhone. Many just carry the same just as their style statement while carrying a second phone to make or recieve calls. I have personally come across many who are out of reach when somebody sitting next to them tries to call them.
 
2. Marketing the iPhone takes away staff from more profitable sectors.

3. Customers not interested in iphone have been the neglected lot.  Could some of those customers that are not interested in an iPhone feel more welcome with operators that do not carry the iPhone and is not it likely that focusing on a niche product will result in neglecting customers that are the actual foundation of an operator’s existence?

4. While the data usage of the iPhone is promoted, most people are switching to the iphone from other data handsets, not coming into the network specifically for that, so the actual educational effect of the iPhone is minimal. Perhaps operators should take a closer look at these customers voice ARPU rather than their data consumption?
 
5. Having iPhone customers using large data volumes sounds good, but when data is being sold at a flat rate, a high data consumption results in high production costs without the corresponding increased revenue. You could compare the operators’ attitude towards the iPhone’s data consumption with a restaurant owner that has a “all you can eat for 10 Euro” buffet and that is proudest of the customers that eat the most! In this business the idea is to generate revenue for the shareholders, not to increase the production volume and costs, while at the same time minimising revenue.
 
6. When you examine the iPhone data consumption, you will see that iPhone customers use their browser to view ordinary websites and that they often choose not to view the websites in XHTML – optimised for low bandwidth and mobile phone sized screens. In practice this results in that when an iPhone user browses a typical news site, an ordinary web page will be around 1 MB, while the mobile version of the same page will often be less than 100 Kb. It is significantly cheaper for an operator to produce 100 Kb data than it is to produce 1 MB data and it is much more fun to deliver 100 KB rather than 1 MB when you are selling data at a flat rate.
 
7. Apple’s App store gives no fees to the operator (in the same way as Nokia share revenue via the N-Gage on device store), and has a kickback from the data tariffs. In short they regard networks as dumb bit pipes.

8. Strand’s research shows that there is not one single Apple partner in the world among the mobile operators that has increased their overall turnover due to the iPhone. So apart from the press coverage, what value has the iPhone actually created for the shareholders of the operators that have chosen to become Apple iPhone partners?
 
9. The unlocking handset market worldwide is huge for unofficial handsets. These phones are most often used on other non-Apple partner networks thus depriving the apple partner networks off the revenue.
 
10. Other Operators and MVNO’s are directly benefiting from (9) without having to invest in all the other iPhone structure requested by Cupertino.

The conclusion is simple. This is not good business for shareholders of operators that are Apple and iPhone partners – on the contrary it is far better business not been an Apple and iPhone partner. Operators that choose not to carry iPhone products have an increased probability of serving their shareholders interests over those that move their management’s focus, subsidies, marketing and distribution power on a product that is as beautiful as Paris Hilton, but increases production costs and where there may not be a relationship between revenue and costs.