Mobile operators are working feverishly to upgrade their networks to LTE, and the main reason has nothing to do with consumer download speeds.
Everyone loves the new 4G LTE mobile networks. For consumers, it means faster download speeds and a better mobile experience. (See more about that in my first post of this three-part series.)
From the operator perspective, LTE has a number of other advantages, most notably speed and efficiency. 4G will change both the radio interface and the core network that operators currently use for their 3G networks. LTE is an all-IP network, similar to the Internet, but with better reliability and quality of service. It improves call set-up time. It has a higher data-carrying capacity and a higher spectral efficiency. It also lowers the cost-per-bit for operators.
So, LTE is important for operators for two main reasons. First, it will increase the efficiency of their entire network. Second, it will make their operations easier and less expensive to manage. Operators will be able to pack more information into packets that go from consumer phones to operator cell towers—which is what allows consumers to send more data, stream videos and all that.
By moving to this super efficient network, operators will be able to offer the new types of services (video calling, high-definition content streaming, etc.) that weren’t possible before. It’ll probably also bring changes in how they price and sell services to consumers.
For example, the telco EE (Everything Everywhere) launched the first LTE in the UK. The basic bundle was £40 for 500 MB per month. It sounds like a lot, but on LTE, it’s actually only a couple of minutes of data if you download data continuously at the maximum throughput. People theoretically could be consuming their monthly amount of data in minutes. At least a first, LTE will give mobile consumers more speed and more data than we’ll know what to do with.
To go a little deeper into the technology, LTE changes the telecom ecosystem on two more abstract levels that will affect the dynamics of the industry. First, LTE is the new common standard for further evolution of competing groups of telecom technologies such as GSM and CDMA. Verizon is a CDMA operator and AT&T is GSM, so in the new LTE world, these two operators will be operating on the same technological standard. Even non-3GPP access technologies such as WiFi complement LTE through Hotspot 2.0 air interface and these can be imagined to interwork with LTE to enable seamless data access for the customer.
Secondly, in the LTE world operators will have to rely more on competitor networks to enable efficient roaming. To really talk about how all of this works, we have to talk more about the “backhaul” of the network, sometimes called the “middle mile,” or the infrastructure that carries data from devices to the core network.
For example, I live and work in the UK. Let’s say I travel to the US, to New York City. If I call someone in the US on a 3G network, say Miami, the data package that contains the sounds I’m making as I talk isn’t going directly from New York to Miami. It goes from New York to the UK and then to Miami. That’s inefficient, even for high-speed data networks. That’s what LTE will change. Operators will be able to offload roaming traffic to local operators rather than carry it around the globe. However, that can only work if there are systems supporting local offload, and more importantly, if there is higher level of trust and cooperation among operators.
LTE provides a number of important efficiencies to operators, and broadband-like service to consumers. But it still isn’t widely available yet. Next post, I’ll go into why.