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SPRING 2009
UMA TODAY
17
LTE: A KEY nEXT sTEP In MOBILE nETWOrK EVOLUTIOn
The next-generation, all-IP access network is on the minds of all mobile industry
leaders. Deployment of a Long Term Evolution (LTE) access network has quickly
emerged as an important next step in mobile network evolution. With very high
data transfer rates and exceptionally low latency, LTE promises to provide users with
a true mobile broadband experience.
At the same time, the tremendous success of 3G/HSPA data solutions over the past
year has demonstrated strong consumer demand for mobile Internet access services.
The GSM Association (GSMA) recently reported that 3G data has become the fastest
growing broadband service in the world, with millions of new subscriptions monthly.
As LTE enables operators to offer an even higher performance mobile broadband
service at a significantly lower cost structure than their 3G/HSPA networks, they are
looking to leverage the technology to capitalize on this proven consumer demand for
a true `mobile Internet.'
To meet this demand, a number of major mobile operators are now targeting
LTE market trials as early as the second half of 2009. ABI Research Analyst Nadine
Manjaro was recently quoted saying "some operators may choose to bypass 3G and
move directly to LTE, putting increased pressure on equipment vendors to meet
accelerated timelines."
THE OPErATOr IMPErATIVE: VOICE OVEr LTE
As mobile
operators plan for this next generation of mobile Internet, they are keen to avoid
mistakes made by many fixed-line operators. The deployment of high-speed
broadband networks left many fixed operators delivering a `dumb pipe,' ideal for
`over-the-top' service delivery. Alternative service providers were able to quickly
flourish by delivering voice over the top of fixed broadband networks, because the
fixed operators themselves were slow to bring out their own competitive VoIP offers.
The mantra for mobile operators is to be `smart-pipe' providers. This approach
acknowledges consumer demand for a mobile broadband pipe providing straight
forward Internet access. But rather than leaving it solely to over-the-top competitors
to deliver voice services over these pipes, there is an imperative for mobile operators
to seamlessly weave their own voice services into the broadband connection.
Consumers can, and likely will, still subscribe to alternative VoIP providers, but a
mobile operator's goal should be to put their own voice service front and center.
Adding the operator's telephony service to an LTE deployment from day one has
another benefit. Revenue from a broadband `pipe' is flat rate and declining. Mobile
broadband services in the UK, for example, have been struck by a price war which
effectively halved the price of monthly service in less than 12 months. Layering in
telephony to an LTE service from the beginning enables operators to increase ARPU
(average revenue per user) with voice. In turn, the return on investment (ROI) for
LTE will be shorter.
Interestingly, there is also a very real negative element to not supplying voice with
LTE. LTE was architected from the beginning to support VoIP services. The absence
of an operator's own voice service will encourage alternative VoIP providers to fill the
void. An LTE network without a bundled core telephony service is an invitation to
VoIP competitors.