01 May 2014

By capping data allowances, LTE network operators are sending mixed signals to mobile enterprise users. Photo: © Martin David Chainey

Forget the years of intimidation, bullying, cajoling, chicanery, mudslinging, weeping, wailing and gnashing of teeth that preceded the November 2012 launch of fourth generation mobile services in the UK. Today, upwards of three million consumers have subscribed to a 4G service, and more are joining daily as the price of handsets, dongles and minutes starts to fall.

But for every silver lining there’s a dark cloud. More than anything, the fast take-up reflects the public’s thirst for data and content where and whenever they want it. Businesses are no different; they too would like (no, make that need) a single integrated network they can just plug into and play. While LTE is potentially a big step forward from 3G, it is not the ultimate solution.

There are big differences between 4G and earlier generations of mobile technology. Understanding them and their limitations is key to the successful application of 4G in enterprises. 4G is generally taken to mean high-speed mobile transmission technologies such as LTE (Long Term Evolution – the latest incarnation of GSM), or Mobile WiMAX. The latter in the UK occupies a very tiny niche market. So for practical purposes, 4G remains synonymous with LTE.

Unlike 3G and 2G, LTE is a pure digital packet switching technology from end-to-end that uses IP. This makes it much simpler and cheaper to manage, and to build devices that exploit it. But, as Skype users will be well aware of, VoIP can be pretty iffy, especially if congestion increases latency on the line, or the networks lose packets en route (as is often the case).

While programmers are still working out the bugs in Voice over LTE (VoLTE), UK operators use their 3G service’s circuit-switching technology in order to maintain a decent quality voice service. They also use 3G when there’s no 4G signal, and will continue to do so for some considerable time. This is despite promises (in O2’s case, a licence obligation) to provide a 2Mbps service with 98 per cent indoor coverage by the end of 2017 – but crucially, not necessarily with a 4G signal. Ofcom says: “Wherever 4G networks are rolled out, we also expect 2G and 3G to be installed alongside, reducing voice not-spots.”

This makes the operators’ 3G/4G coverage pattern extremely important for enterprise users. Is there a signal where you do business? It’s not easy to find out as operators’ coverage checkers work on postcodes. So for example, unless you know all the postcodes between home and work, it’s hard to see if you’ll have 4G connectivity during your commute.

TDD and FDD LTE

LTE technology comes in two ‘flavours’: frequency division multiplexing (FDD) and time division multiplexing (TDD). FDD requires different dedicated frequencies for uplinks and downlinks, while TDD uses one channel for both. China is the main proponent of TDD, but FDD is generally held to offer better quality of service and is used by UK operators. However, Vodafone and mobile re-entrant BT have the option to use both, judging from last year’s mobile spectrum auctions. They are likely to offer a TDD service, possibly for niche markets like machine-to-machine (M2M) or very short range (femtocell) indoor coverage.

The other thing to note is that LTE’s radio channels are quite narrow which restricts the amount of data they can carry. To boost the total network capacity, operators have to increase the number of cells and/or offload data traffic from the air as quickly as possible. Most are doing both, hence the massive and growing investment in public Wi-Fi. The Wi-Fi hotspots, often colocated in the cell base stations, take the traffic into fixed backhaul networks that use microwave and fibre to carry the signals to their destination.

US-based Senza Filli specialises in the small cell market. Its CEO Monica Paolini says: “Mobile operators have embraced Wi-Fi, even though it falls largely outside their direct control and uses licence-exempt spectrum. But they have ambivalent feelings. Wi-Fi is a huge reservoir of data capacity that is largely free when used from residential or workplace locations.”

Paolini argues that mobile operators should move beyond blind offload to get more directly involved in managing the Wi-Fi subscriber experience and in controlling the Wi-Fi infrastructure in public locations. She says they can do this by moving to Carrier Wi-Fi and integrating the technology into their networks.

That will certainly help. But it’s not enough. Frankly, the operators need as much spectrum as they can get (preferably for free). But there is also new LTE technology called LTE-Advanced (LTE-A) that allows operators to cobble together different bands to give a higher carrying capacity. This is precisely what EE did when it tested a 300Mbps link in London’s Tech City area late last year (see News, Nov 2013).

LTE-A is enabled by carrier aggregation. In this case ‘carrier’ refers to radio waves rather than the mobile operator, while aggregation is similar in concept to bonding fixed wire cables to increase transmission capacity. For the Tech City trial, EE brought together 20MHz of 1800MHz spectrum and 20MHz of 2.6GHz. The combination allowed it to stream 4K TV which requires 20Mbps compared to, say, 5Mbps for the BBC iPlayer.

The data paradox

Operators are double-minded and cautious about data. Worldwide, they face declining revenues from voice and messaging as ‘over-the-top’ (OTT) apps like Skype and WhatsApp become more popular. Rising revenues from data do not replace the earnings lost to these free apps. So from an ‘all you can eat’ inducement to subscribe to 4G, many operators are now capping data usage and outlawing tethering, or using your smartphone as a modem for your laptop or tablet to access the internet. The message is: ‘don’t use the network’.

David Dyson, CEO of 3 which doesn’t yet offer a 4G service, told a Westminster e-Forum meeting in April that 99 per cent of the traffic on his company’s network is data. 3 just recently set data caps to curb its few but very high volume users. Vodafone and EE both offer capped 4G services but don’t reveal their voice/data traffic splits. However, EE says non-text data revenue represented 44 per cent of its average revenue per user (ARPU) in 4Q13.

Alexandra Rehak, who heads telecoms research at Analysys Mason, told the e-Forum that voice revenues are now less than half of UK mobile operators’ total revenues. “Handset data traffic is the key factor in future growth,” she warned, adding that ARPUs are sliding from £16.90 per month towards £15.60 in 2019. Her observation points to some of the market issues related to the device makers’ implementation of 4G. LTE is not a monolithic technology; there are at least 17 frequency bands in the LTE domain, so despite the Global mobile Suppliers Association counting almost 1,600 LTE devices on the world market, only some work in the bands implemented in the UK. True, most devices support more than one band. But it can make roaming, especially in the US, disappointing.

Also, few manufacturers have launched devices that take advantage of the speeds possible with carrier aggregation. EE notes this is changing. It promised to launch its 300Mbps commercial service using a CAT6 Huawei router. This will provide a high-speed mobile Wi-Fi connection to up to 20 devices, and any devices that support the 802.11ac standard will run at up to 200Mbps. EE expects to ship the first commercial Huawei Mobile Wi-Fi units by summer 2014, with handsets to follow later in the year.

However, while those speeds are about 20 times faster than 3G, they are still below the target of 1Gbps set by the standards bodies for stationary 4G downloads (100Mbps in motion). They also reflect the asymmetric bias that has dogged digital telecoms (downloads are faster than uploads).

While asymmetry may reflect traffic flows in Google searches and iPlayer downloads, business applications such as telephone conversations and video conferences need symmetry because both parties are as likely to talk as much as each other. Asymmetry also adds a hitch to cloud computing – many users would like to be able to upload and store or backup data in the cloud but this requires fast upload speeds to be practical.

Ready for business

So is LTE the mobile solution enterprises have been waiting for? It may not be perfect, but as a technology 4G is a lot more business-friendly than 3G and users are more likely to adapt to it.

In a research paper commissioned by EE, consultants at Arthur D. Little said 4G networking led to improvements in enterprise application performance and mobility. These in turn led to: increased sales and enhanced customer service; improvements in products and services; personal and team productivity; management effectiveness and innovation; process efficiency and effectiveness; direct cost reductions; employee motivation; and better flexibility, agility and decision-making.

Proof came from the US experience with LTE, where two-thirds of firms interviewed reported increased productivity. Almost half (47 per cent) were able to cut costs. Thirty-nine per cent said they had won more business and, when asked if 4G had helped their organisations “innovate and jump the competition”, more than three-quarters agreed. “Compared with Wi-Fi, 4G LTE allows fully-mobile use of applications that require true broadband speeds and improved convenience with no need to authenticate onto another, possibly public, network,” said the consultants.

Analysys Mason sees LTE as a potential substitute for fixed networks for the home and SME market. “For example, UK Broadband’s now service offers connectivity using LTE and 4G routers. This use of TD-LTE as a substitute for fixed networks could be an interesting solution in emerging markets,” it says.

Indeed, usage patterns uncovered by Ofcom suggest people consume high-speed data mostly when stationary and indoors. This makes 4G more like Wi-Fi as far as most users are concerned, and indicates why operators have found it hard to charge a premium for 4G.

Phil Sorsky, VP of sales in Europe for connectivity specialist CommScope, says 80 per cent of mobile data traffic originates indoors, but only two per cent of the world’s 30 billion square metres of office space has an in-building mobile wireless network.

According to Sorsky, the first in-building wireless solutions focused on extending coverage using an “outside-in” approach that relied on signals from the macro network penetrating the building. This is now changing to an “inside-in” strategy as traffic levels rise and offload becomes essential. He says: “The new unified wireless management platforms become so intertwined with existing WAN and LAN infrastructures that many office workers never notice them. They simply enjoy high data speeds without ever plugging into a socket.”