LTE and WiMAX: Myths and Realities

ARTICLE

LTE and WiMAX: Myths and Realities

By Robert Syputa, Senior Analyst
Contact the author at robert@maravedis-bwa.com

The following LTE & WiMAX Myths & Realities, published on the Clearwire Investment site has been extensively distributed on Internet discussion threads and blog sites. While making many important points and clarifications that we primarily are in agreement, there are some points on which we continue to differ. The original posting as listed on the investment and industry blogs will be followed by our comments. For the most part, the WiMAX Forum have provided relatively objective information and analysis of the capabilities, market and applications for WiMAX. Like all other complex segments of commerce and development, differences of opinion can be expected to be expressed.

Myth: LTE is backwards compatible with 3G.

Reality: Strictly speaking, backwards compatibility implies that a 3G device can connect to an LTE base station. This is categorically not the case. LTE requires new base stations and new client devices. An HSPA handset will not be able to connect to an LTE base station, period.

LTE advocates tend to use the term “backwards compatible” when referring to a DUAL MODE handset (e.g., HSPA & LTE) which could connect to either network. But this is not a special characteristic of LTE -- Sprint already has dual mode EV-DO / WiMAX handsets planned and KT has HSPA / Wibro & EV-DO / Wibro handsets. (Wibro is simply the Korean name for WiMAX in the 2.3 GHz band.)

Myth: The LTE standard is complete.

Reality: The LTE standard recently entered a phase where revisions are now under change control -- generally, this phase happens in 3GPP when a spec is 80% complete. The stated 3GPP target for “completion” is October 2008 and then the real work can begin to fix bugs and agree upon interoperable vendor equipment profiles.

In contrast, the mobile WiMAX spec was ratified in Dec 2005; 5 plugfests occurred between July 2006 and Oct 2007; and mobile certification began in Jan 2007.

Myth: LTE performance is better than WiMAX.

Reality: Because LTE & WiMAX are both based upon OFDMA-MIMO, there is not expected to be a significant performance delta over time. Because WiMAX will have been deployed commercially for over two years before the first LTE

network is deployed in 2010, it may have superior performance initially.

Myth: LTE is an evolution of HSPA (3G)

Reality: The 3G evolution from WCDMA to HSPA was achieved via upgrades to operators’ existing 3G networks. LTE is not a 3G upgrade -- it must be deployed in new spectrum and requires a new radio access network (base station hardware, client devices) and connection to a new “all IP” core network (different from today’s 3G core networks.)

It is possible to add LTE to existing 2G, 3G cell sites -- similar to how Sprint is re-using 70% of its existing EV-DO cell sites for its WiMAX deployment.

Myth: Operators will replace their existing 2G/3G networks with LTE.

Reality: We expect operators to maintain their existing 2G or 3G networks for the foreseeable future. These networks are very efficient for voice and have built up good coverage over the years. Similar to WiMAX, LTE will initially be deployed as an overlay data network in new spectrum. Operators will offer multi-mode handsets (e.g,. HSPA + LTE or HSPA + WiMAX) to provide the best of both worlds (coverage + high speed) to their subscribers while they build out their 4G networks over several years.

Myth: For existing 2G or 3G operators, the migration to LTE is easier than it is for WiMAX.

Reality: In the first two Mobile WiMAX deployments by major carriers with existing 3G networks (KT and Sprint), both have adopted dual mode handsets so their users can seamlessly roam between their existing 3G networks and their new WiMAX networks. WiMAX equipment suppliers and operators are working closely within 3GPP to ensure that operators with existing 2G or 3G networks can deploy WiMAX as easily and at similar or lower costs to LTE. Optimized interworking between WiMAX & 2G / 3G networks enables operators to maintain their existing networks for voice & ubiquitous coverage while building out their high speed WiMAX network for broadband data capacity.

We have found operators very supportive of WiMAX-3GPP interworking as it creates a safe, viable choice in WiMAX for their 4G technology decision.

Myth: WiMAX will not have the same economies of scale as LTE.

Reality: Intel’s first generation Wi-Fi + WiMAX embedded module has been touted as having come out at a cost to PC OEMs of less than HALF the cost of 3G-only embedded modules,[1] even though 3G modules are relatively mature. Combine these “PC economics” with the 2+ years of TTM WiMAX has -- during which it will travel down the cost curve -- and we are not expecting the WiMAX ecosystem to be cost disadvantaged.

In addition to the vibrant WiMAX Forum competitive ecosystem of over 530 companies, there’s the M-Taiwan initiative (3 dozen companies, over $1.2b USD of R&D) designed to apply “Taiwan economics” to WiMAX. Net-net: we expect WiMAX to be competitive with LTE from a cost perspective (once LTE is available two+ years from now.)

Myth: WiMAX & 3G are competitors Reality: We expect WiMAX & 3G to be complementary. Whereas the circuit-switched voice offered by 2G & 3G networks is very efficient, WiMAX provides about 3x more data capacity than today’s 3G networks. This means operators can maintain their existing 2G or 3G network for voice & narrower-band data, and deploy WiMAX for more data intensive applications. This is exactly what both KT (HSPA + Wibro) is doing and Sprint (EV-DO + WiMAX) is planning.

Myth: WiMAX will not have as big a device selection as LTE

Reality: Even with the very first commercial Mobile WiMAX network in So. Korea, we’ve already seen a level in the variety of devices which exceeds that available for 3G today. For example, one of the most popular form factors for accessing the Wibro network are WiMAX USB dongles with integrated MP3 players and/or storage. PC economics and innovation are backing WiMAX -- so one shouldn’t apply a traditional “telecom” device model when comparing WiMAX & LTE. We also expect the M-Taiwan initiative and the KDDI consortium in Japan to help drive a level of device innovation not seen before for a new wireless technology.

Myth: WiMAX & LTE are going to converge.

Reality: Because WiMAX & LTE are so similar, some believe the two should converge. We’re not sure if such convergence will ever get traction, but for now, mobile WiMAX is two to three years ahead of LTE in terms of major commercial deployments and is moving full steam ahead.

Finally, whereas WiMAX has great traction in the 2 GHz band between Sprint, Clearwire, KT, Japan, Taiwan, Russia -- LTE spectrum is starting off fragmented. Verizon & AT&T have “unconventional” spectrum for LTE (1.7 / 2.1 GHz, maybe 700 MHz) -- bands which may end up being somewhat unique for LTE deployment, reducing economies of scale.

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We agree with many points made above. But all such efforts are imperfect and are developed by competing interests and are comprised of various segmentations that require unique patterns of adoption of technology and market approaches. Finding the ‘just right’ solution or direction for the broad field of development or finite application of finalized versions of standards will remain a step-wise progression of decisions, by no means pristine at every step along the way. Therefore, we offer the following analysis and comments:

- LTE can be an anachronism for "Long Term Emasculation" of incumbent walled garden captive service and device business models. Or it can mean, as coined by Sprint’s. CTO, "Late To Evolve" from the contrived nature of 3G networks to the commonly adopted IP/network design model for universal communications. Although 3G-LTE can be ridiculed for arriving late at the conclusion that MIMO-OFDMA based technologies would comprise the core link methods of 4G, they have, nonetheless, come to the conclusion that Maravedis has advocated for over five years.

- The LTE standard has been rushed along by the 3G market leaders. The arguments about stage of completion are valid. But it could also be said that standards efforts have accelerated within both IEEE 802.16/WiMAX and ETSI/3G-LTE such that technologies are being commercially rushed into products before tying them up completely in the standards. WiMAX has seen shifts in the standard and system profiles to become more adaptive and mobile. That has delayed the availability of WiMAX certified equipment based on 802.16e wave 2. And new technologies that are becoming part of future or future versions of the standards, 802.16m/j and 3G-LTE alike, are being put to use as supersets of product features. For example, smart, self-configured network methods have found their way into systems now offered by Alvarion as SentieM™ network enhancements . Eventually AAS, higher order MIMO and other advances deployed in vendors systems as enhanced versions of standards compliant certified equipment will have to comply with the requirements of approved standards and certifications regimen. In some cases, enhancements and product differentiation will become options rather than core requirements for compliance and thus can be implemented outside of core requirements and with or without compatibility with other vendors.

- Both WiMAX and LTE are MIMO-AAS-OFDMA based frameworks that will evolve over time. New methods such as greater use of adaptive modulation schemes, higher order MIMO, more adaptive use of MIMO-AAS, Co-MIMO, MU-MIMO, virtualization of functions in distributed wireless network topologies, etc. will significantly enhance performance such that new codifications of the standards and generations of vendor systems will show performance improvements over the prior issues. So, LTE is improved over 802.16e because it comes latter. Likewise, 802.16m/j will likely show improvement over LTE as it will incorporate further evolution of improvements.

- LTE spectrum is starting off fragmented but so is WiMAX. The multi-band and wide-band antenna and RF are evolving to mitigate issues of multi-band devices. This is the continuation of a trend in evolution of wireless devices and base stations. WiMAX can be criticized for concentrating on the details of current spectrum availability to the exclusion of looking at the positive impacts of multi-frequency system and device development that moves toward strategic use of spectrum. Of course, the field of operators that have access to multiple bans of spectrum to be put to use for WiMAX is very limited. But we are aware of and have talked with multiple operators who have availability of multiple bands of spectrum that they now seek to exploit using either WiMAX or LTE. The use of multiple bands, agile/cognitive radios, is the long term direction wireless is now headed and where immediate advantage can be derived in the U.S. and a few other forward thinking regulatory environments.

- Incumbency does matter: we are seeing slings and arrows being hurled from the '3G camp' but isn't that to be expected? Some of the arguments of the 3G camp for LTE are preposterous but, then, some of the early expectations for .16d based business development were equally preposterous or just naive.

WiMAX, despite some statements that have helped lead to criticisms for ‘hype’ , has been relatively free of grand-standing falsification of claims for what the system of technology is capable of delivering. The reaction from the 3G camp boils down to being 'the sincerest form of flattery' - they are copying the format of technologies and mantra of open networks. That may be more a positioning ploy than reality of what is likely to be deployed for many years... but it does show that they are taking the threat of WiMAX seriously.

- The fact is that WiMAX and 3G are both capable of being used in competitive and complimentary manner. Wireless networks can be overlaid and made complimentary as multi-mode devices that are now planned become available. But in the hands of a particular set of competitors, WiMAX can challenge incumbent networks for types of services and network efficiencies that leads to disruptive competition. We agree more with simple statements about the complementary nature of WiMAX and 3G-3.5G networks. This complementary nature can diminish if WiMAX is pitted more directly against I-HSPA, EV-DO rev a/b networks. These latest version 3G networks are evolving to become more data and IP centric and provide a somewhat less disruptive pathway to 3G-LTE.

Since it would take liberation of spectrum from 3G to deploy either WiMAX or LTE into the bulk of available spectrum, most operators will find WiMAX is a complimentary network that can be used in available higher frequencies that they have available rather than as a competitive network. WiMAX can be used to deliver higher bandwidth service or relieve bandwidth requirements on otherwise stretched 3G networks similar to the goals for Wi-Fi and femtocells.

But if the argument looks forward to a point that WiMAX becomes more pervasively deployed, then it can no longer be conceived that it will not compete for customers with 3G. It is likely that most customers that subscribe to WiMAX will continue to have cell phone accounts because the service is so widely available. But as combined with 3G in multi-mode devices, this becomes more attractive of a competitive offering against 3-3.5G competitors. As a package of services, WiMAX+3G look more compelling and capable of delivering the 'always connected' paradigm.

To deny that WiMAX competes with 3G as a simple answer to diversified market conditions flies in the face of the perception and pending reality of operators. Our interviews and surveys of operators, as reflected in current reports, indicate that many are deploying WiMAX even though they or others are considering the deployment of LTE when it becomes available and as it compares at that time to WiMAX. The level of competitiveness will vary greatly and will be measured in years rather than months or quarters... every new wireless system, whether conceived as evolutionary or revolutionary progress, is, in the long run, cannibalistic of prior generations.

If WiMAX could begin again it might have pursued the present course of development 18-36 months earlier. Since development of enabling technologies take time, that might have garnered an additional 12-18 months lead over 3G-LTE in time to market.

If we had a nirvana clean slate to write on we would now decide on one framework for evolution of technology and use of spectrum. We don't have that and thus will continue to see competing streams of development: the 3G camp and WiMAX camp will compete - first for 'share of mind' and then for share of business.

In closing, both WiMAX and LTE NG systems have the potential to be used as Green4G communications that enable less and wiser use of transportation resources, new environmentally neutral and saving businesses and enhancements to current operation. We have advocated the industry take a more aggressive role in Green initiatives including our sponsored efforts at www.Green4G.com and at www.wcai.com.

LTE – Late to Evolve, comments of Ali Sabassi, Sprint CTO, as reported in Network World <link>

Alvarion SentieM™ <link>

For more information you can contact the author. robert@maravedis-bwa.com