Operators accelerate ‘3.5G’ but will that enable W-CDMA to stay competitive?
Published: Thursday 9 December, 2004
Operators on both sides of the Atlantic have detailed plans this week to implement the ‘3.5G’ technology HSDPA in 2005, highlighting how new competitive pressures have accelerated the upgrade roadmap for the GSM-based carriers. HSDPA and mobile WiMAX operators will be pitted against each other in some markets from late 2006, a looming battle that raises questions over the future roadmap for the GSM technologies going into the next decade.
HSDPA (High Speed Downlink Packet Access) is a software upgrade to the GSM-based 3G standard, W-CDMA. Until recently it was not expected to be deployed until 2006 at the earliest, but the impact of broadband wireless has changed all that, forcing carriers to make yet another network upgrade. Wi-Fi and the promise of WiMAX have taken the shine off 3G’s data rates, as well as making it harder for operators to charge premium prices for W-CDMA services and so gain return on their huge investments in licenses and infrastructure. This is accelerating the path to HSDPA, with MMO2 and Cingular both planning roll-outs next year.
In some ways, this pits HSDPA head-to-head not only against the most advanced CDMA technologies, EV-DO and EV-DV, but also against the upcoming mobile version of WiMAX, 802.16e. Both have strengths and weaknesses. In the real world, data rates to the end user are likely to be similar on the downlink, though WiMAX will be quicker for the uplink. WiMAX base stations will be cheaper – unless cellcos already have W-CDMA infrastructure, in which case HSDPA is a software upgrade. 802.16e is as yet unproven for high mobility, although pre-standard technologies such as Wi-Lan’s Mobilis support hand-off at over 100 miles per hour, so the indications are good that WiMAX will be as mobile as HSDPA. And the 802.16 technologies have the critical advantage of spanning fixed and mobile applications, supporting operators’ need to provide more flexible bundles of service offerings to their customers.
However the technologies perform, relative to each other, in real life is secondary in terms of the operator decision. Companies with investments in W-CDMA already need a clear path to expand the performance of their networks, and HSDPA is the obvious choice. W-CDMA carriers may take an interest in WiMAX for new territories or for a parallel overlay network for high density, high value markets, but in general, they are stuck with their core GSM technology. Their challenge, then, is how to ensure that they gain return on investment when they will be competing for high value users with at least two alternatives. Wireline carriers, cellcos with no 3G license and new challengers will all be able to use WiMAX to steal market share from W-CDMA carriers and, while those mobile operators have the advantage of their brand, the battle will be won or lost on the attractiveness of the applications and services they can deliver, and the cost/revenue ratio. There are many worrying signs for the 3G community that WiMAX will enable its operators to deliver a wider range of multimedia applications more cost-effectively than HSDPA, as will Flarion Flash-OFDM and EV-DO.
The critical factor is uplink speed. Enterprise applications, one of the drivers of high data rate mobility and a key focus for all major cellcos, usually require symmetrical performance, which is supported by the OFDM technologies but not by 3G. While the theoretical downlink speed of HSDPA is 14.4Mbps (likely to be under 4Mbps in real life), its uplink peak is 384Kbps, and far less in reality. Also, pre-WiMAX mobile technologies like Navini RipWave, or the non-WiMAX Flarion Flash-OFDM, are designed to work consistently throughout the cell, whereas cellular technologies see degradation as users move further from the cell site.
To some extend, W-CDMA operators are stuck with a compromised technology with lower real world performance and lower spectral efficiency than EV-DO or the OFDM alternatives. This creates a golden opportunity for equipment vendors that can devise technologies that enhance HSDPA performance to deliver differentiated services. Lucent is a prime mover here, as the MMO2 commercial trial indicates. The UK carrier is to launch its HSDPA service on the Isle of Man, through its subsidiary Manx Telecom, next summer. Although limitations of early devices will confine downlink speed to 3.6Mbps in the early stages, MMO2 will combine it with Lucent’s IMS (IP Multimedia Subsystem) solution to offer high speed data, multimedia and VoIP – supporting fixed as well as mobile wireless service over IP. Such a combination would rob WiMAX of at least one of its advantages. IMS is a converged IP-based core network solution that is part of Lucent's Accelerate Next-Generation Communications Solutions portfolio. Chris Hall, managing director of Manx Telecom, said: "This network will serve as a showcase of the tremendous benefits fixed-mobile multimedia networks have to offer”.
Among the planned applications are download of video, films and large email attachments to laptops (handsets are not expected until 2006).
Lucent is also the main supplier for Cingular Wireless’ 3G roll-out in the US, which will incorporate HSDPA in some markets with particularly high data requirements. Cingular already has a nationwide EDGE network and has mandated that its HSDPA solution must be backwards compatible to EDGE rather than GPRS, as is more usual. This puts pressure on device makers to come up with multimode EDGE/W-CDMA/HSDPA handsets and laptop cards to work with a CIngular network that will consist, in the short term, of “islands of W-CDMA with oceans of EDGE” and even smaller oases of HSDPA. Sony Ericsson is leading the charge to W-EDGE PC cards, and plans to launch these in the third quarter of 2005. Qualcomm and Analog Devices have chipsets for such devices in the works, though Texas Instruments has not yet announced one.
More strategically interesting than backwards compatibility, however, is future growth path. We have seen how Qualcomm is embracing OFDM technology as an enhancement and future roadmap for EV-DO (see Wireless Watch December 2), but the W-CDMA community is less forthcoming about plans for post-HSDPA and the fourth generation. NTT DoCoMo leads the development of the next evolution of GSM, but is starting to be overshadowed by the OFDM world. While its laboratory tests achieve 400Mbps peak rates using its 4G platform, Siemens has already demonstrated OFDM at 1Gbps, as has Motorola. The 3GPP standards body is considering an extension to W-CDMA that would use OFDM in the downlink and potentially provide a migration route to pure OFDM, but this is unlikely to be appealing to carriers in the short term since the downlink is not the problematic area.
Ironically Qualcomm’s CDMA2000, which until last year was seen as a technology with a short lifespan that would be snuffed out once W-CDMA took firm hold, is now looking to have more long term staying power than its rival, if it continues to converge with OFDM. This is especially bad news for Europe. While harmonizing around a single cellular flavor, GSM, was the basis of Europe’s advanced mobile communications structure, in the third generation, sticking to that strategy has become a very mixed blessing. The argument for using one network is breaking down, since there will be alternatives to W-CDMA in the shape of WiMAX and CDMA450, and all the problems of roaming and interworking that the GSM-only policy sought to avoid. And the arguments against standardizing on W-CDMA – that it has serious disadvantages compared to CDMA2000 in terms of ROI, time to market and spectral efficiency – are strengthened by the impending arrival of the scene of other challengers such as 802.16e.
This tips the competitive balance in advanced wireless communications against Europe and in favor of the US, for so long the laggard in the race. While the monolithic approach to standards has saved Europe from the chaos of incompatible networks that dragged down US progress, that multiplicity is now accelerating US progress as competition heats up. Verizon’s aggressive roll-out of EV-DO has set the benchmark and the other operators have had to respond. As well as Cingular’s 3G/HSDPA plans, Sprint this week outlined its own $3bn EV-DO roadmap and Nextel will deploy the closest thing to a 4G network outside Korea, using either the newest EV-DO release with a parallel OFDM system, or Flarion’s Flash-OFDM. Wi-Fi has taken off in the US more quickly than in Europe, and there is a new hunger for multimedia services such as mobile television (see separate item), another area where the US could leapfrog other nations.
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