CONVERGENCE OF LTE & WIMAX
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1 CONVERGENCE OF LTE & WIMAX
2 Table of Contents Executive Summary 03 Wireless Broadband Landscape 04 Present Wireless Broadband Ecosystem 05 Adoption of WiMAX/LTE 06 Need for Convergence 06 Are WiMAX and LTE really moving towards convergence? 07 How can WiMAX and LTE complement each other? 08 Operator Perspective 08 Implications for Operators 09 Conclusion 10 Table of Figures Figure 1: Mobile Crossover 03 Figure 2: WiMAX Vs LTE 04 Figure 3: Wireless Broadband Ecosystem 05 Figure 4: 4G Subscribers Forecast 06 Figure 5: Advantages of Convergence 06 Figure 6: Growing Support for Convergence 07 Figure 7: Similarities 07
3 Convergence of LTE & WiMAX Executive Summary In an increasingly interconnected world, consumers demand high speed communication, ease of access and flexibility. This has spawned off next generation networking technologies that offer anytime, anywhere, any device access to web/data and provide better communication capabilities. In fact, digital convergence, an outcome of this technology evolution, is revolutionizing the way data is delivered and consumed. However, the challenge here is to track evolving consumer demands and meet the expectations for faster and more sophisticated capabilities. Subscriptions (millions) Source: OVUM Figure 1: Mobile Crossover The Mobile Crossover! Mobile Broadband Fixed Broadband Fourth Generation (4G) wireless networks are set to transform the telecom sector with their promise of providing greater speed and handling higher volumes a priority for most enterprises today. Long Term Evolution (LTE) and Worldwide Interoperability for Microwave Access (WiMAX) are the two wireless broadband technologies poised to dominate next generation networks. These technologies were This paper explores the need for convergence of LTE and WiMAX, factors driving it, stakeholder efforts underway to actualize it and the best strategy operators can adopt to capitalize on this union. The paper ends with recommendations for operators on the path to take, the high potential sectors and applications for 4G networks and a study of emerging markets from this perspective. developed in response to market demand for interoperability across networks and integration of earlier wireless network technologies. Earlier perceived as competing technologies, LTE and WiMAX are increasingly viewed as capable of complementing each other. Therefore, an appropriate question today is how much and how soon they will converge. 03
4 Wireless Broadband Landscape Much has been written about the exacting requirements in a highly connected world and changes triggered subsequently in the communications network landscape. Some of the key changes witnessed are: Recent data from mobile service providers shows that the growth of packet data has surpassed voice data High demand for wireless multimedia services such as data, voice and video has ensured widespread growth of broadband wireless networks. This is further spurred by advancements in standards and technologies. The growth of wireless broadband networks is expected to gradually outpace Asymmetric Digital Subscriber Line (ADSL) connections. Mobile operators today are addressing exponential growth in traffic with the help of packet evaluation for Third Generation (3G) and all Internet Protocol (IP) from 4G. While 3G technology delivers much higher bitrates, there is still a need for wireless operators to address the growing demand for wireless broadband, lower latency and multi-megabit throughput. Consequently, this spells out a new revenue opportunity from a growing pool of LTE Equipment vendors and handset manufacturers Vodafone, Ericsson, Siemens Figure 2: WiMAX Vs LTE Backed by WiMAX ISVs Intel, Cisco, Google untapped consumers, enterprises and retail businesses that can only be satisfied with next generation networks, i.e 4G. LTE and WiMAX 3GPP Community backing IETF are enhanced versions of high-speed 3G wireless networks and are considered to be 4th generation technologies. The wireless broadband ecosystem comprising of equipment manufacturers, operators, developer and users, drives a positively correlated cycle attracting new users and increasing usage of broadband services. 04
5 Present Wireless Broadband Ecosystem The wireless broadband ecosystem comprising of equipment manufacturers, operators, developer and users, drives a positively correlated cycle attracting more new users and increasing usage of broadband services. Figure 3: Wireless Broadband Ecosystem Network Operators Fast & reliable networks VoIP traffic forecasted to be 0.4% of all mobile data traffic in End Users New online users Increased use by existing users Equipment manufacturers More capable and powerful devices Source: Cisco VNI Mobile 2011 Innovators and developers Compelling content and applications Some of the key trends that are altering the wireless broadband ecosystem and reinforcing the case for LTE and WiMAX adoption are: 1. Commoditization of voice services combined with the proliferation of technologies such as VoIP and universal WiFi is leading to declining Source: Cisco VNI Mobile 2011 voice revenues. Network connectivity and data transmission/ services are expected to boost data revenues. Mobile video will generate much of the mobile traffic growth through It is estimated that 66.4 percentage of the mobile network traffic will be video traffic by Laptops, notebooks, smart devices and smart phones will continue to lead mobile data traffic growth. New device categories such as M2M and tablets will begin to account for a significant portion of the traffic by CDMA as a technology can migrate seamlessly to LTE. Therefore, leading CDMA players would be in the best position to launch LTE based services before anyone else. 4. It is predicted that wireless broadband connections will account for 43% of the total broadband market by A technology-wise break-up is shown in the graph here. Source: Wireless Intelligence 05
6 Adoption of WiMAX/LTE Given the various propelling factors discussed earlier, WiMAX and LTE Need for Convergence networks are fast gaining momentum across the world. Large operators are launching commercial services using these technologies. Europe is mostly LTE-centric. On the other hand, there is an increasing demand for WiMAX in Taiwan and in many emerging countries, especially the Middle East, Africa, and India. Figure 4: 4G Subscribers Forecast While LTE and WiMAX exist independently today, there is a valid case for converging them. The union of the two technologies is expected to allow operators the flexibility to deploy multi-mode networks according to different scenarios. In essence, a converged WiMAX/LTE solution is desirable to operators as it will enable them to take advantage of the relative strengths of each technology while downplaying its weakness. WiMAX still enjoys a slight edge for now as LTE is relatively new. However, it is expected that the adoption of LTE will surpass it sometime next year mainly because LTE is backward compatible with existing GSM and HSPA networks. This allows mobile operators deploying LTE to continue to provide a seamless service across LTE and existing deployed networks. Figure 5: Advantages of Convergence LTE advantages Advantages of convergence High throughput Low latency Best of both worlds Select the most suitable solution and technology for each situation Plug and play Improved end-user experience & easier voice transport FDD and TDD on the same platform Simple architecture resulting in low operating costs WiMAX for true mobile broadband experience and LTE for Voice Allows to meet data needs while protecting QoS of voice network; no excessive operational expenses WiMAX advantages Increase opportunities Consider more variables such as environment topography Greater coverage Multi-functionality High speed of connectivity Better equipped to handle data with larger packet sizes Reduce the multi-technology deployment risk Protect operators investments 06
7 Are WiMAX and LTE really moving towards convergence? WiMAX and LTE are expected to converge on several levels as they have many common characteristics and deliver similar performances. In addition, several stakeholders are taking steps to accelerate this union. Much of the technology used for LTE is similar to that chosen for WiMAX even though they have both evolved from two different standards, i.e 3GPP and IEEE respectively: Figure 6: Growing Support for Convergence Strong Support from the Ecosystem for Convergence Standards ETF - new internet protocols are well suited for wireless intertechnology applications The IEEE access-networkindependent abstraction of inter-technology handover that could be used with any pair of access network types Industry alliances and supply relationships Intel and Nokia; Ericsson and Sprint; the IEEE, 3GPP and other SSOs; and common proposals by WiMAX and LTE vendors for IMT-Advanced Telecom equipment vendors are offering RF base stations that are software upgradeable to other 4G technologies such as LTE Motorola Orthogonal Frequency Division Multiplex (OFDM) signalling Similar architecture and common gateways Data driven services Figure 7 : Similarities This is the most important similarity between LTE and WiMAX This commonality enables IPTV, VoIP, and other IP/SIP communications Both WiMAX and LTE are data-driven services and rely on a VoIP style connection rather than a voice network These commonalities and developments make the merger of WiMAX and LTE a certainty in the near future. As the rollout of LTE begins, base stations, handsets, and CPE equipment will be built using baseband and RF devices that support WiMAX and LTE. Moving from Nokia s Flexi to software-defined radio platforms that will support both WiMAX and LTE development Nortel, Alcatel, Alvarion, and Motorola Baseband and integrated chip suppliers are supplying commercially available ICs and board level products that combine WiMAX and LTE Broadcom, Beceem Initially, these and other wireless networks will converge in devices on a service level through multi-mode device integration, which are expected to be much simpler and more effective in supporting seamless handoff of sessions. It is believed that both WiMAX and LTE will co-exist in certain regions, and that operators will use WiMAX for one set of applications and LTE for another. 07
8 How can WiMAX and LTE complement each other? Overlaying a LTE network to complement existing WiMAX networks will allow bundling of services and dual-mode devices. This will help increase an operator s subscriber base. Achieving this is not difficult because: An LTE overlay on WiMAX would not require additional towers The wired network infrastructure is mostly common between systems and network management, back-office accounting, operations and billing Other functions will also be common (operator dependent) First major operator support - Sprint Nextel Corp s Network Vision plan which supports the LTE and WiMAX convergence Operator Perspective Operators believe that convergent end-to-end solutions can avoid the risks of technology choice and network evolution, maximize the value of key assets, release the pressure from increase of mobile broadband traffic Until LTE is rolled out, WiMAX will deliver data for 3G networks where 3G s speeds are inadequate, while the cellular network continues to handle voice. It is thus easy to see why and how the two technologies could coexist in the near future and provide valuable high-speed and help realize business success. The WiMAX/LTE network decision will be less complex if multimode devices are available and there is a migration path for the operator. The decision process may still be unclear, but it gives them the flexibility, so that it does not matter so much. services to their mutual customers. Initially, since LTE focused more on frequency division duplexing (FDD) Although they offer similar standards, WiMAX and LTE require different technology to be deployed and this comes with its own set of challenges such as: Operators are likely to run up significant costs Manufacturing cost effective dual-radio handsets capable of supporting a convergent solution Phone and chipset manufacturers would have to develop products with the capability of supporting both technologies at a reasonable cost Taking a decision on the timing and modalities of migrating device spectrum and WiMAX on time division multiplexing (TDD) spectrum, their parallel existence seemed suitable to meet the market demand. However, two developments have changed this, forcing WiMAX operators to reexamine their long term plans for WiMAX: 1. The increasing support for a TDD-version of LTE, known as timedivision LTE (TD-LTE), thereby competing with WiMAX directly. 2. A powerful LTE ecosystem with a greater choice of subscriber devices and competitive equipment prices is rapidly emerging, driven by a growing market and increasing commitment from most tier-one mobile operators. markets to multi-mode capabilities Most WiMAX operators today are therefore exploring the However, some progress has been made on this front with Huawei already launching multiple convergent LTE/WiMAX offerings. The opportunities that LTE offers either as a complementary technology or as an alternative to WiMAX. operators thoughts on the convergence of the two technologies and the options available follow. With more reliable convergent mobile broadband networks and increased adoption of multi-mode devices, the industry is likely to switch to a combined WiMAX- LTE network. The main issue remains the financial difficulty of hosting these two different wireless standards and the sufficiency of resources to support both networks. 08
9 Implications for Operators Operators are in an excellent position to leverage the combined power of today s widely deployed WiMAX and emerging LTE standards to deliver anywhere, anytime wireless broadband communications bolstered by a sound ecosystem and economies of scale. A convergent WiMAX/LTE approach improves flexibility as well as the bottom-line while allowing operators to migrate seamlessly to For new operators: For those with plans to deploy immediately or over the next two years, WiMAX is the best option. The chief reason is that the WiMAX ecosystem is well established with low/declining costs of infrastructure and devices. This will hold true in cases where mobility is not a primary factor. Where mobility is important, TD-LTE may be the better option to pursue than WiMAX. future technologies and protect their investment. However, despite the success of recent operator trials, a commercially viable TD-LTE ecosystem is still several years away. Therefore, the two most important factors for operators planning to deploy WiMAX or TD-LTE, are their business model and the timing of implementation. For existing WiMAX operators: Continuing on the same path while incorporating new upcoming features from enhanced versions and ensuring continuity of service is likely to be a successful strategy. This is most appropriate for operators who own 3.5GHz spectrum since it is not well suited for complete mobility and does not have defined TD-LTE spectrum profiles yet. Conclusion It can be concluded that only the combined power of WiMAX and LTE will be able to handle the growing demand for broadband services. Each of these technologies comes with its own strengths that are further enhanced by strong independent ecosystems. Hence, the way forward for those interested in developing their 4G footprint, is to look at how these two technologies can converge and how the combined capabilities can be best capitalized on. To maximize revenue, vendors must be flexible and deliver cost-effective solutions today that can scale to support a mix of WiMAX and LTE tomorrow. The LTE market is expected to be at least five times the size of the WiMAX market in the coming years, and vendors cannot afford to miss this opportunity. 09
10 This whitepaper was authored by Padman Kumar, Senior Manager - Business Transformation Practice, at Wipro Consulting Services. He is based in Bangalore and can be reached at padman.kumar@wipro.com About Wipro Consulting Services Wipro Consulting Services (WCS) is a division of the Wipro Ltd (NYSE: WIT), a $7 billion enterprise that employs around 136,734 employees across the globe. WCS offers Business Advisory, IT Consulting and Risk and Compliance services designed to improve business performance, drive operational efficiency and maximize ROI. With consultants based in Western Europe, North America, India, Asia Pacific and the Middle East, our integrated Consulting, IT, BPO and Product Engineering services combine the benefits of expert proximity, with global leverage to provide technology edge and speed to your strategic programs. About Wipro Infotech Wipro Infotech, the India, Middle East and Africa business of Wipro Limited (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company, that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of Business through Technology helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner s approach to delivering innovation and an organization wide commitment to sustainability, Wipro s IT business has over 130,000 employees and clients across 54 countries. 10
11 DO BUSINESS BETTER NYSE:WIT OVER 120,000 EMPLOYEES 54 COUNTRIES CONSULTING SYSTEM INTEGRATION OUTSOURCING WIPRO INFOTECH, DODDAKANNELLI, SARJAPUR ROAD, BANGALORE , INDIA TEL : +91 (80) , FAX : +91 (80) , info@wipro.com Copyright Wipro Technologies. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission from Wipro Technologies. Specifications subject to change without notice. All other trademarks mentioned herein are the property of their respective owners. Specifications subject to change without notice. IND/TMPL/MAY2011-DEC2011
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