4G networks will offer more for less

Third generation mobile networks are likely to start to give way to 4G networks based on the LTE technology standard in two or three years.

But the extra demand that will create for scarce radio spectrum means consumers may need to wait for everyone to ditch their old analogue televisions and switch to digital television before they get the full benefit of faster and cheaper mobile broadband.

The jump from 2G to 3G was equivalent to the step up from dial- up to broadband in the fixed-line market and brought applications like video calls, mobile television and fast web browsing to mobiles.

Kursten Leins, an LTE specialist with Ericsson in Australia, likens the switch from 3G to 4G as equivalent to moving from first- generation fixed-line broadband standard ADSL to the new racier ADSL2+. He sees a time when LTE networks will be able to transfer data at 1 gigabit per second.

Detlev Otto, head of technology in Nokia Siemens' Vodafone customer team, says the low time lag sending and receiving signals over LTE means it could support new applications – such as mobile online gaming and telemedicine over mobile networks.

Arguably the bigger significance of 4G is it could make the entertainment applications brought about by 3G networks more affordable. Claims about future capacity of mobile networks should be treated with caution but not total cynicism. If it sounds too good to be true it probably is – very high speeds can be obtained by allocating more spectrum and antennas to cellphone towers and handsets, but this increases the complexity, battery consumption and the heat generated by devices on the network.

Some of the performance gains of 4G don't have corresponding drawbacks, however, and the advantage of higher-capacity cellsites is they provide a bigger pie to be carved up between customers.

So long as cellsites are connected to telcos' trunk networks by fibre optic cable or similar high-speed connections, the higher speeds quoted each time a new mobile technology is rolled out mean telcos can offer lower-priced mobile data plans with higher data caps and less punitive charges for exceeding traffic caps – all very much top of mind for most mobile broadband users.

Nokia Siemens claims to have demonstrated LTE running at 172 megabits per second using 20MHz of radio spectrum.

"When you have a three-sector base station, which is usual, you would have 516Mbps in a 20MHz environment," Mr Otto says.

4G networks will have other advantages. LTE handles traditional voice calls as Internet protocol traffic, rather than akin to switched circuit calls, which means calls can be handled intelligently while taking up far less capacity on cellsites. This could translate into cheaper calling plans with lots of extra features – such as an ability to easily transfer calls between mobiles and fixed-line phones mid-call.

Equipment suppliers made equally grand promises for alternative 4G-standard Mobile WiMax, which now threatens to sink without trace. Mr Leins says the difference is that all the major vendors are getting behind LTE, which doesn't require telcos build complete new national networks from scratch.

"The challenge we have seen with WiMax is it just hasn't gained that critical mass, and I think a lot of that is driven by the lack of delivery against promises."

Mr Leins forecasts the first LTE networks are likely to be launched in 2010, led by Verizon, Vodafone and Japan's DoCoMo.

"Given the New Zealand and Australian markets are so small, we have to wait for the North American and European markets to drive the deployment of networks – and most importantly the handsets, datacards and laptops."

A reason for local operators to hold back is that telcos the size of Telecom and even Telstra have next to no influence over the way the market develops and won't want to get burned operating LTE networks on spectrum bands that few other operators and handset- makers support. Those fears are likely to be front of mind, given Telecom is now being punished for its investment in "dead-end" technology CDMA and Vodafone risks finding itself in a similar back alley for a couple of years at least, after backing WCDMA at 900MHz.

Mr Leins says at the moment the only globally harmonised spectrum band on which LTE networks can operate is the 2.5-2.7GHz band. It was auctioned off for just $3.1 million by the Economic Development Ministry last year, as expectations for WiMax nosedived.

In contrast, Swedish telcos this year splashed out $468 million in a similar auction. Mr Leins says: "Clearly they are expecting to make some return on that. I think that demonstrates the credibility of [LTE] technology."

Telcos could also choose to launch LTE by reallocating spectrum used to support GSM and WCDMA networks in the 900MHz and 1800MHz bands, as customers upgraded their GSM phones, he says. This would be made easier by the fact LTE allows spectrum to be allocated in relatively small blocks.

But both Ericsson and Nokia believe LTE's future ultimately lies in the 700MHz band, currently reserved for UHF television broadcasts. Lower frequency spectrum has proved increasingly attractive for mobile network operators, because it provides better in-building coverage and low- frequency radio signals travel further, meaning fewer cellsites are required.

Broadcasting Minister Trevor Mallard announced in December that a date for the closure of analogue TV would be set once three- quarters of viewers had switched to Freeview or Sky, or in 2012, whichever came first. That would deliver the so-called "digital dividend"; the freeing-up of the 700MHz spectrum band.

When New Zealanders get to enjoy the benefits of 4G technology may therefore hinge on when granny decides to fork out for that new flat-screen television.

- © Fairfax NZ News