The Case for LTE
Friday, June 26th, 2009
Our usage of wireless data increases about 10% every month. Thankfully, our bills don’t increase 10% every month. Good for us – bad for the wireless network operators.
So what are the operators doing about it? Remember the unlimited ‘all-you-can-eat’ data plans offered by virtually every carrier? Well…read the fine print. There is an upper limit to the ‘unlimited’ data that you can consume. Some operators would completely block your data access once you had reached the cap. Others would simply charge an outrageous amount for the excess data over the cap that you had consumed. Still others would apply technology - such as rate-shaping of traffic - to degrade your quality of service and make your experience so unbearable that you’d stop downloading all those YouTube videos. These techniques are designed to decrease the total traffic in the network so that operators can serve existing users cost-effectively and pursue new data subscriptions – both of which are mandatory to sustain profitability.
Clearly, these ‘solutions’ are not ideal because of their negative impact on the user experience. Consumers become confused and frustrated, which defeats the original purpose of increasing the operator’s profitability. Consequently, operators are looking for other ways to lower the cost per bit transmitted over the wireless network in order to profitably serve the growing demand for mobile data. For example, many operators are experimenting with femtocells - little base stations that sit next to your Wi-Fi access point at home – or even Wi-Fi radio, which is supported right in the phone. Both solutions are designed to offload wireless data (and voice) onto existing (i.e., cheaper) fixed-line networks to serve users while they are at home or work, thereby reducing traffic on the wireless network. The bad news is that both solutions are complex – and require a change in user behavior.
That leaves us with the most obvious solution – make the wireless network less expensive to operate – which is why operators are planning to roll out LTE (Long-Term Evolution) networks. LTE is a great solution. Its spectral efficiency is roughly four times that of existing HSDPA technology. This means that for every bit transmitted over an existing network, LTE would allow four bits to be transmitted, thus reducing the cost per bit by a factor of four. Put another way, it would enable operators to serve four users at the current cost of serving a single user. Fantastic, right? What better reason for operators around the world to spend years in planning and billions in acquiring spectrum, radio infrastructure and cell towers - and even more years and billions in deploying and rolling out the technology. The savings on existing users’ traffic would be enormous, and the potential revenue from growth in data subscriptions would be even more substantial.
Of course, we can’t forget about the ‘years’ and ‘billions’ required before this is a reality. Did you know that the combined power of Bytemobile’s optimization solutions can reduce the cost per bit by as much as a factor of two? That’s 50% of the value of LTE - and it costs a fraction of LTE in terms of cash and management and deployment time. The principle is simple – rather than optimizing the way the radio uses the spectrum, Bytemobile solutions optimize users’ data. This means that they work on today’s network, require no changes in user behavior and actually improve the user experience – all the while reducing the cost per bit. No wonder Bytemobile has over 100 wireless operators worldwide as deployed customers.
Optimization is yet another solution available to operators in their attempt to increase utilization of available bandwidth and reduce the cost per bit. Operators will continue to invest in optimization for as long as they continue to invest in better radio technologies – and as long as users demand higher levels of service.
The relentless pressure to decrease costs, increase subscriptions and revenue, and improve the user experience not only demands optimization solutions today, but will also demand optimization solutions in the future LTE environment, and will further demand optimization solutions if and when 5G radio technology is invented. After all, the same forces that drive operators’ investment in radio technology also drive their investment in optimization.
-Joel Brand
