Current 3G networks in most industrialized countries are facing troubles these days. Usage of 3G has increased too much too fast for everyone to experience a good surfing experience via 3G. Why so fast? Well, thanks to the rather speedy introduction of smart phones, tablets and 3G modems for laptops. One network operator in Netherlands even experienced that 15% of phone calls (yes, the old fashioned sort) at peak times didn’t get through as the network capacity had reached the ceiling. And radio futurologist James Cridland writes a very relevant post about data consumption via telecom networks in his blog post: What a 500MB fair-use policy means for radio. A very good example of the increasing challenges that telecom operators meet as usage increases.

So it is about time that we do get the ‘next thing,’ often referred to as 4G (now also officially after UNs ITU rewrote their definition of what 4G is, something even opening up for LTE and HSPA+). The ‘next thing’ is in most countries called LTE (Long Term Evolution). LTE only has a capacity of 31,68Mbps (given a 10Mhz channel) per transmitter. But that is only if conditions are ideal.

  1. First of all, all the users need to be located very near and with a direct view of the transmitter.
  2. If even one user is further away or behind a hill or a house, a different modulation scheme is needed. To have to use several modulations can lower available bandwidth all the way down to 1.06Mbps.
  3. LTE may need up to 11 modulation schemes to reach users at different distances and locations from the transmitter. That various modulations are requires makes multicasting impossible. That is yet another reason why LTE cannot replace broadcasting for live radio and TV. More about that here: Why the Internet Won’t Solve Everything.

Note that 31.68Mbps will only give 78 users mobile TV at the same time (at a bitrate of 384Kbps) if all of them were very close to the transmitter and no one was using the same transmitter for any other kind of Internet surfing (mail, news, Facebook, downloads, etc.).

LTE is furthermore not very efficient. One transmitter can only cover 0.75 square kilometers properly.

And LTE is very costly. To build an LTE network for 90% of the population in the UK will require 16,000 transmitters (and then a lot of roads and railroads would still not be covered). To cover the same with DMB, DAB and DAB+ would take less than 300 transmitters. Every LTE transmitter costs around 250,000 USD with running costs of around 60,000 USD every year. That requires an investment of 4 billion USD and operation costs of 1 billion USD a year. If a telecom operator was to build such a network, 4 million customers, each paying 550 USD a year would be needed to break even.

These prices were valid in October 2010 (according to British network operator Arqiva), while the rise of new Asian competitors on the infrastructure side will most likely cut costs greatly. That will again make the business model more attractive to network operators.

Do not get me wrong. More capacity is clearly needed, and 4G networks will help do this, especially in densely populated areas. 4G networks also reduces latency, something that means that webpages load faster and that applications or services respond faster. But 4G networks will soon be as congested as what is the case with 3G. The more capacity you are given, the more you will use. And with the amount of smartphones and other capacity hungry now being sold, so will ‘everyone’ else. It is like the roads in China an India. More and more people now buy cars, and the roads (networks for cars) cannot cope, even not with 10, 12 or 14 wide mororways. If everyone insists on driving instead of using alternatives (trains, busses, boats, trams, feet) the user experience for those on the road will hardly ever be a good one during peak times. 4G networks are needed, but they are also very much hyped as they are currently marketed as the (only) solution. 4G networks need assistance, or life saving, to be as successful as the industries need them to be.

It will be advantageous, even necessary for everyone in the value chain that the pressure on these networks is relieved when possible. Some of it is already being done by the usage of Wifi where available. But even Wifi networks have bandwidth constraints when many people use them. And all networks that are being used to transfer Internet traffic are limited by the backbone structure they are connected to and that is being shared by other networks. Why the Internet Won’t Solve Everything.

Old fashioned broadcasting technology is there as an option for all sorts of data (Broadcasting Isn’t Only for Radio and TV) that is to be transported at the same time to the users, although this is an option hardly ever mentioned by network operators. Why Telecom Operators Should Love, not Loathe Broadcasting. Rather than pretend that broadcasting doesn’t exist, innovative telecom operators and handset manufacturers should look at all the apparent advantages and find out how they can be combined with the Internet in order to create even better services and user experiences. Combination is key, partnerships are powerful and satisfied customers secures cash. It isn’t very hard to understand, really, but too many seem too arrogant to initiate the first contact in order to start cooperating.

1 COMMENT

  1. Great evaluation. So I told the Toyota dealers I know from Long Island NY to recommend a car that would look great even amidst the peak hours of the day – something that I may spend a night of comfortable sleeping.

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