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Friday, 04 April 2008 08:56

Long Term Evolution not so far away

In less than two years the next phase of 3G cellular technology should be commercially available and its backers say it will be cost and performance competitive with ADSL. This raises some rather interesting issues for rural Australia.

Calling the next phase in the development of 3G cellular technology 'Long Term Evolution' might have been a good idea at the time, but the name is looking increasingly inappropriate as commercial availability of LTE technology gets closer.

There's been plenty of activity and announcements around LTE at CTIA Wireless 2008 - the US wireless industry's annual trade show - in Las Vegas - over the past few days, including the announcement by Ericsson of what it claims is the first commercial LTE chipset - suitable for use in both network and terminal equipment. Ericsson expects to have general availability of its LTE network gear by Q3 2009 and - although it does not make terminal equipment other than through its handset joint venture with Sony - it is confident that terminal equipment makers will be ready with devices to support LTE. Other vendors are not far behind.

The figures being quoted for LTE data throughput are up to 100Mbps downstream and 50Mbps upstream. According to Ericsson's vice president network for South East Asia, Martin Bäckström, in tests Ericsson's equipment has achieved maximum speeds of almost 150Mbps upstream. More importantly he claims average speeds of 80Mbps upstream and 40Mbps downstream and says that LTE performs significantly better than HSPA at the edges of a cell site's coverage area.

That's not to say these speeds will be available in commercial networks: those will depend on how many users operators want to support in a cell site and how they dimension their networks. According to Bäckström so long as operators have spare slots in the base station's racks, an upgrade to LTE from a current GSM or 3G WCDMA base station simply means slotting in a new card.

However operators at the leading edge of HSPA deployment have only just gone to the current highest speed variant, 21Mbps and at present can't offer terminals to take advantage of this. So why to go LTE in a hurry?

According to Bäckström, there are two reasons: it's more economical in its use of the spectrum resources and "for most consumer LTE will exceed the speed you can get in fixed network XDSL technologies." He suggests also that LTE services could be offered at prices competitive with ADSL. And he points out that there are operators in Sweden today offering all-you-can-eat HSDPA services at 1.8Mbps on HSPA for around $US10 per month, and that the USB HSPA modem is the highest selling broadband access device in the country. CONTINUED

In Australian cities where there are four HSPDA networks, 3 - which is the least attractive in that it has the smallest coverage area - has long been the price leader with it X-Series offerings, but now its prices for straight data service are getting very close to those of ADSL services, ie the just announced 3GB for $29 per month: which bears out what Bäckström is saying.

So if you are Optus and you are already planning to spend upwards of $500 million rolling out HSDPA throughout most of your GSM network (as it announced in January 2007 ) why would you want to use WiMAX? It might deliver similar data speeds at similar costs but it won't be any use to all your city based customers when they go bush, unless they buy new access devices. And it's a whole different ball game in terms of technology that you have to support: different expertise needed, more training expenses, additional spare parts inventory etc, etc.

Shortly after Optus announced in January 2007 its 3G network expansion plans it followed up with an offer to further extend the coverage to 98 percent of the population. "If the Government accepts the 'Optus Broadband Plus' proposal, Optus would extend its network to cover another 500,000 square kilometres using approximately 750 base stations," Optus said.

"The extension would cost an estimated $370 million, with $200 million of the cost to be funded by the Government's Broadband Connect program and $170 million to be funded by Optus. Under Optus Broadband Plus, Optus would use the additional network facilities to deliver fixed equivalent broadband services in the 500,000 square kilometre extension area. Regular 3G mobile services would also be offered."

Paul Fletcher, Optus director of corporate and regulatory affairs said: "If the Government supports our funding application to further extend our 3G mobile network under Optus Broadband Plus, Australia can lock in a competitive market structure over a much larger footprint than has ever been achieved before." Yes but giving Optus a $370m free kick against Telstra and Vodafone is hardly fair dinkum. CONTINUED

The word "wholesale" was never mentioned. But, if what Bäckström is saying about LTE is correct, the ideal solution in terms of getting broadband services to sparsely populated Australia at minimal cost might have been one 3G cellular network able to have access to all the available spectrum (ie Telstra's Optus', and Vodafone's) operated by a separate entity and wholesaled by all four carriers, and others, in competition. Remember both Telstra, with Hutchison and Vodafone with Optus already have arrangements in place for a degree of infrastructure sharing.

Perhaps the Government should have used the threat of giving Optus a $200m leg up so it could compete against Next G to persuade Telstra to offer wholesale access to Next G in rural Australia.

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