Neville Ray, the Chairman of 4G Americas as well as Chief Technology Officer for T-Mobile USA, addressed a packed room of industry analysts to discuss the progress of 4G over the last twelve months. There are now 193 4G networks (defined as HSPA+ and LTE) in service with 39 in the Americas. HSPA+ paving the way but LTE is gaining momentum with 30 of the 193 networks being LTE. He stated LTE deployments have stumbled temporarily in the European markets but North American and Latin American markets will be the proving ground for LTE. He discussed the changes in the industry such as the democratizing of information, the transformation of user experience and the change in the way consumers communicate. Mr. Ray stated that 4G provides the network foundation for new and different machine to machine (M2M) applications. This new era of M2M would move from low throughput and high latency-tolerant applications to higher bandwidth applications with various latency requirements such as telemedicine, education and commerce applications. Other key statistics from Mr. Ray’s presentation include:
- 3GPP technologies account for over 5 Billion mobile connections today, which is approximately 89% of the market.
- 1 billion wirelessly connected M2M devices by 2015.
- Mobile data growing 10X faster than voice. (Cisco stat)
- 2010 mobile data = 3x the 2000 global Internet traffic (Cisco stat)
- By 2015, 2/3 mobile data will be video (Cisco stat)
It’s important to note the statistic on video. Mr. Ray illustrated how this is nearly a reality today. He showed us figures of T-mobile usage on 4G and video usage as well. In August of 2011, almost half of T-mobile’s data traffic was video. 4G devices were consuming more than 1 G of bandwidth per month, about three to four times the data usage of 3G and roughly 10X that of 2G. These stats reveal that video is already a major drain on today’s networks. Video will drive the need for 4G networks and increased spectrum allocations. In fact, every operator or forum member I spoke with rated spectrum allocation as the top issue to be resolved. In his presentation, Mr. Ray showed a CTIA slide that illustrated the spectrum crunch particularly in the United States. Apparently, the U.S. has only 1.5 MHz of allocated spectrum per subscriber, not nearly enough to support new applications and the video traffic demands that will happen in the coming years. This is particularly the case if governments expect wireless broadband to replace wired connections as a cure for the digital divide. Even those that appear to have a large allocation of spectrum are still sorting through auctions and other hurtles to get that capacity online. Hopefully, we’ll see governments get serious about addressing this issue in 2012. It would also be beneficial if spectrum could be allocated in bigger blocks to enable better network efficiency.
He also stated that wireless operators play a pivotal role in fostering the ecosystem and improving the customer experience. “The network is the glue.” He described four ways that operators deliver this glue as: 1) Network optimization and exposure. 2) Device affordability and experience; 3) Application growth and utility; 4) Services and relationship management. In short, he was highlighting that operators are more than a dumb pipe. They are a smart pipe, a source of network service components that can be leveraged by app developers, and a service as well as distribution channel. To his point, I do believe operators are becoming more partner-friendly. As Apple and others have changed the dynamics of mobile purchases and experience, operators have heard the call to action to build new strategies. Of course this process is slow but I am seeing very interesting work being done in operator-led innovation centers around the globe.
My key takeaways from the presentation are that operators are deploying new networks as fast as budgets and spectrum allocations will allow. Video has already fundamentally changed carrier network demands and will only worsen over time. Technology vendors and operators are trying to keep pace but the situation is precarious. Spectrum is desperately needed but is unlikely to emerge for several years, mostly likely after performance degrades.
Also, don’t forget to check out our video interview with 4G Americas’ Chris Pearson where he discusses the state of the market http://www.youtube.com/lopezresearch#p/a/u/0/TtarT-l7LI4