Digital Britain - what it means for mobile operators

Yesterday's publication of the Digital Britain report has predictably been met with headlines about the imposition of a broadband ‘levy’ (or ‘tax’ to you and me) to help fund the future investment in a national high speed internet infrastructure. But, as the appointment of Martha Lane Fox as ‘Digital Inclusion Champion’ perhaps mischievously suggests, is this all a little bit of a lastminute strategy?

There are some interesting points contained within the report (Martha's appointment not being one of them!), not least the news that ISPs are going to be made responsible for policing their own subscribers. This is maybe not such good news for the ISPs, but for anyone selling DPI-related products, it can only be a good thing ... but more on this in a later post.

One area that hasn't received much attention thus far has been what it had to say about mobile networks. There has been some moaning that mobile is just being seen as a stop-gap solution until fixed networks can sort themselves out and deliver the requisite speeds (a heady 2Mbps) to the more remote, broadband-deprived parts of the country. However, I think that's a bit harsh, to be honest.

The report not only acknowledges that next generation mobile networks will be able to deliver data rates of up to 100Mbps, but clearly says that both 3G and LTE have a key role to play in delivering the goal of universal broadband coverage.

What is of perhaps more significance though is:

• WiMAX is essentially dead in the UK. While it advocates "the immediate release of WiMAX-suitable 2.6Ghz unpaired TDD spectrum for auction", the reports lays its cards on the table and states that there is "an encouraging consensus amongst incumbent mobile operators for the mobile broadband networks to be based on either 3G or LTE. This does not preclude a new entrant using other technologies, such as WiMAX, but in the highly competitive UK mobile radio market it is highly unlikely that such a new entrant would have the market power to de-stabilise the vital standardisation that underpins national and international mobile roaming for UK users."

• The 'Big Auction' for 2.6Ghz paired FDD spectrum (i.e. the spectrum for LTE) is set for mid-2010. But, there is still a big debate to be had over spectrum refarming before this can happen. Essentially, if Vodafone or O2 (who occcupy 900Mhz spectrum for their GSM services) want any 800Mhz spectrum for future mobile broadband services they will have to trade in their 2G spectrum. The reason, simply, is that the economic advantages of 900Mhz over 1800Mhz (greater cell coverage etc.) are such that the regulator has to balance it out so T-Mo and Orange aren't penalised. So the auction of 800Mhz and deployment of LTE rests on how easily 900Mhz can be refarmed.
  

• In a bid to drive universal mobile broadband coverage and so get 3G services as nationwide as 2G, the terms of the 3G licences are going to change from time limited to indefinite in order to give operators a chance to see an ROI from extending their 3G coverage. What's more, the Digital Britain report seems to favour network sharing in the sub-1Ghz spectrum as a way of expediting this network expansion, not least because lowering the cost of delivering broadband coverage to the last 10% of the UK is critical given that they are so well dispersed and "not a viable market" on their own.
  

Overall, the Digital Britain report seems positive for mobile operators. I've heard murmurings of people saying LTE could solve all the problems and so we wouldn't need to pay the 'broadband tax' to bankroll building a nationwide high speed fixed network, but realistically this was never going to be the case. Any anyway, the economics of delivering mobile broadband in remote areas is still something that needs help from the regulator to balance.

Either way, with several important spectrum issues to be resolved over the next 12 months, it's clear that there is still much to play for in the role mobile networks will have in policies to finally deliver a universal high speed internet in the UK.

LTE gets a voice

The jigsaw pieces are all falling into place for LTE following this week's LTE World Summit in Germany. However, according to Rethink Research, "significant technical barriers still need to be crossed before most cellcos will commit to firm mass roll-out dates; and new approaches, notably femtocells, will be important to maximize return on investment".

One of the big questions around LTE is what is it actually for... is it a nice big fat data pipe or will it be the network for all services including voice? While Orange see it as a solution for mobile data, T-Mobile's Klaus-Juergen Krath, senior VP of radio networks development is adamant that "I don't think we should push LTE as a wireless DSL technology - it has much more than that. That's why we push heavily for early availability of all services, most importantly voice and SMS over LTE." According to Unstrung, 3 Group's technology director, Ed Candy, went even further commenting at the Summit that "In these difficult times, to go ahead with a technology that's service-limited is crazy. We don't know how this financial crisis is going to play out. I would be against [using] any technology that has fundamental holes in it."

It's this question of voice that is perplexing the industry right now, and given the comment above it's perhaps not surprising that T-Mobile, through the VoLGA Forum, is leading the charge to find the answer to the question of how to migrate voice services across to LTE. Backed by vendors such as Kineto Wireless, Ericsson and ZTE,* the VoLGA Forum is aiming to define the 3GPP solution for delivering Voice Over LTE (and done so via Generic Access technology, to complete the spelling out of the acronym).

While Orange's stance is understandable, given that there is a perfectly good network in the form of 3G that can handle voice so LTE can focus on data, the fact is that this approach would require the operator to maintain two distinct network architectures. The sprectral efficiency of LTE is such that there are already savings for operators simply by moving data traffic from 3G to LTE, but the big savings come when they can start to manage just one network. The VoLGA initiative is interesting simply because it aims to address the missing step ... i.e. how to actually manage the migration of voice and messaging services to LTE, without jeopardising the quality, experience and revenue currently yielded by voice services.

While the WiMAX faction fight an increasingly desperate rear-guard action, it seems clear that LTE has won this particular battle. However, it's equally clear the battle on what the peace looks like is already warming up.


* Ericsson, Kineto Wireless and ZTE are AxiCom clients. AxiCom handled the launch of the VoLGA Forum in March 2009.

Picking a Winning Technology

The telecoms industry, along with the wider technology industry, is littered with great ideas that failed, seemingly pointless technologies that have somehow managed to find a use and become irreplaceable, and vociferous debates as interested parties battle for their technology to become the 'standard'.

But what makes a winning technology? The Betamax v VHS story is perhaps a bit long in the tooth these days, but still incredibly relevant. Indeed, this month Nokia has tried to dismiss WiMAX as a "wireless Betamax" and that while it will linger around, it will be LTE (the "VHS" in the analogy) that will win the standards war and dominate the market. However, as the article in the Financial Times goes on to correctly qualify, while VHS dominated the consumer market, Betacam was generally recognised to the the 'better' technology and indeed became the standard used by broadcast professionals.

Fundamentally, what this argument comes down to is not which is the better technology. Sadly, that seems to have naff all to do with it. In fact, it comes down to something called the 'Social Construction of Technology'. To boil it down to one key point, it's not a case of which is the 'best' technology, but rather who is saying it's the best technology. It comes down to the stakeholders, the social momentum behind the technology that determines the 'winner'.

So, VHS beat Betamax, BluRay beat HD DVD ... go far enough back, and the chain-driven 'safety bicycle' eventually dominated while the Penny Farthing was consigned to history and AC beat DC as the standard for electricity generation.

To win a standards war, therefore, it's not enough to win the technology battle. Technology does not exist in a vacuum - technology that exists for the sake of technology invariably fails, while the technology that solves a problem, that actually does something is the one that survives and thrives. Understanding the context of a technology is critical to being able to pick a winner ... choices about technology are shaped by the society in which it exists.

So, look at the LTE v WiMAX battle from another perspective - not in terms of which is the 'better' technology, but rather which has the weight of special interest groups and social momentum to define the rules of the battlefield?

WhyMAX?

WiMAX is fighting back. In-Stat has forecast that for at least the next few years, WiMAX will outpace LTE as fixed wireless operators come to market first with broadband services. Similarly, ZTE* has gone on record as predicting a WiMAX 'boom' in 2009, despite some of other major equipment vendors exiting the market.

That WiMAX will do better than LTE in 2009 is, of course, something of a truism. With the exception of Verizon which is ploughing on, operators are putting LTE roll-out plans on ice as the reality of the network build-out CAPEX hits home.

In-Stat reckons that HSPA+ will end up being WiMAX' biggest challenge ... and the same could be said of LTE. With Telstra already delivering 21Mbs and promising 42Mbs mobile broadband, the case for LTE from a pure speed perspective seems moot. OK, so the spectral efficiency of LTE means that ultimately, as mobile data traffic grows, they will have to migrate to LTE or else face diminishing returns as the cost of keeping the HSPA+ network at full throttle outweighs the revenue it enables... but at the moment, that's a problem of which operators can still only dream.

* ZTE is an AxiCom client