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UMTS Forum V1

May 2009

LTE Mobile BroadbandEcosystem:

the Global Opportunity

UMTS Forum Report 42


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LTE Mobile Broadband Ecosystem: the Global Opportunity

UMTS FORUM REPORT 42

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Table of contents1 Execut ive summary ....................................................................1 2 Introduct ion ...............................................................................7 3 LTE enabled servi ces ................................................................17 3.1 Mobile data applications will drive LTE............................................173.2 Consumer services......................................................................173.3 Enterprise services vertical sectors .............................................244 Devices and in frastructu re ........................................................27 4.1 Overview ...................................................................................274.2 Chipset vendor LTE roadmap ........................................................274.3 Device vendor LTE roadmap .........................................................304.4 Infrastructure supplier LTE roadmap ..............................................374.5 Test component..........................................................................405 Drivers and barr ier s of the LTE ecosystem................................41 5.1 Reasons and drivers for the deployment of LTE ...............................415.2 Barriers to the adoption of LTE......................................................466 End u ser survey results ............................................................50 7 Conc lus ions and recommendat ions...........................................637.1 Drivers and risk factors for LTE deployment and adoption .................637.2 End user expectations and needs ..................................................677.3 Recommendations.......................................................................67Annex A: LTE g lobal ecosystem development ...........................................70 A.1 Global LTE ecosystem roadmap .............................................................70A.2 Regional ecosystem variations ..............................................................74A.3 Impact of LTE standardisation ...............................................................82A.4 Industry view on future LTE development scenarios..................................83A.5 Trials and industry activities..................................................................84Annex B: Supporting in it iatives ................................................................87


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Table of figuresFigure 2.1 Illustration of LTE ecosystem ................................................................ 9Figure 2.2 What does the ecosystem foundation group comprise? ........................ 10Figure 2.3 Each generation ecosystem increases in size ....................................... 12Figure 2.4 Key components for service access...................................................... 14Figure 2.5 Different services share common components ..................................... 15Figure 2.6 Overview of LTE ecosystem roadmap ................................................... 16Figure 3.1 Consumer services enabled and enhanced by LTE ................................ 17Figure 3.2 Content / devices preferences ............................................................ 22Figure 3.3 Business services enabled and enhanced by LTE.................................. 24Figure 4.1 Overview of chipset vendor roadmap ................................................... 28Figure 4.2 Overview of device vendor roadmap .................................................... 30Figure 4.3 Overview of infrastructure supplier roadmap ....................................... 38Figure 4.4 Public LTE and SAE vendor announcements ......................................... 39Figure 5.1 LTE ecosystem interactions ................................................................. 41Figure 6.1 Current/ future preferred mobile broadband services by country ......... 51Figure 6.2 Current/ future preferred mobile broadband services by age ............... 51Figure 6.3 Mobile broadband services growth ...................................................... 52Figure 6.4 Service/ application priority list ........................................................... 53Figure 6.5 New services and applications by country ........................................... 54Figure 6.6 New services and applications by age.................................................. 55Figure 6.7 Device preferences for embedded mobile broadband ........................... 56Figure 6.8 Preference for embedded mobile gaming............................................. 57Figure 6.9 Preference for separate mobile phone and video/ music device............ 58Figure 6.10 Feature preferences for mobile device ................................................ 59Figure 6.11 Preference for mobile netbook device ................................................. 59Figure 6.12 Preference for mobile TV capability .................................................... 60Figure 6.13 Price to pay comparing w ith current fixed broadband offer ................. 61Figure 6.14 Price to pay comparing with current mobile broadband offer .............. 61Figure 6.15 Adoption of higher performance mobile broadband............................. 62Figure 7.1 Drivers and risks in LTE ecosystem ..................................................... 63


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Figure A.1 Overview o f LTE ecosystem roadmap .................................................. 70Figure A.2 LTE roadmap in US .............................................................................. 75Figure A.3 LTE roadmap in Western Europe .......................................................... 77Figure A.4 LTE roadmap in China .......................................................................... 79Figure A.5 LTE roadmap in Japan ......................................................................... 81Figure A.6 LTE roadmap in South Korea ............................................................... 82Figure A.7 LSTI Proof of Concept - Predicted end user data rates ......................... 85Figure B.1 Examples of NGMN requirements ........................................................ 88Figure B.2 LSTI activity timing ............................................................................. 89Figure B.3 Industry LTE demonstrations .............................................................. 90


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ForewordMobile broadband is changing the way the world communicates. The UMTS Forum helps all

players in this dynamic new value chain understand and profit from the opportunities of

3G/UMTS networks and their Long Term Evolution (LTE).

The UMTS Forum participates actively in the work of the ITU, ETSI, 3GPP, EC and CEPT as

well as other technical and commercial organisations globally. It also contributes to the

timely licensing and deployment of mobile broadband globally through regular dialogue with

regulators and responses to public consultations. A strong promotional voice is maintained

via a high-profile presence at conferences, seminars and workshops as well as regular

briefings to the media, analysts and other stakeholders.

Membership of the UMTS Forum draws together everyone with an interest in mobile

broadband, including network operators, regulators and the manufacturers of networkinfrastructure and terminal equipment. Since its launch in 1996 The UMTS Forum has been

supporting the interests of its membership with a range of studies, reports and other

outputs. Principal focus areas include markets trends, mobile broadband services and

applications, key growth markets, spectrum & regulation, technology & implementation.

While centered around the promotion of 3GPP technologies and their long term roadmap, the

studies of the Forum nevertheless embrace a range of complementary mobile and wireless

access technologies that can deliver broadband multimedia and the personal Internet.

This UMTS Forum report n 42,LTE Mobile Broadband Ecosystem: the Global Opportunity,

is a first step in understanding the critical enablers for LTE. Offering significant benefits in

speed, capacity and support for new services, LTE will dominate the global market for mobile

broadband as operators start to deploy networks over the next few years. LTE will be

characterised by a complex ecosystem that includes not only operators, infrastructureproviders, terminal vendors, standard bodies and regulators, but also chipset manufacturers

and consumer electronics vendors, to name a few. Supported by a healthy ecosystem, LTE

will also see the emergence of dynamic new business models not hitherto experienced in the

mobile space.

This report explores a number of key parameters and success factors, the level of readiness

of the industry, and gives a series of recommendations for successful LTE deployments. It is

also intended to serve as the foundation for further studies by the UMTS Forum that will

examine specific elements of this new value chain in greater depth.

I would like to thank the Ovum team for their extensive research work and in particular

Stewart Anderton, Yim Ling and Lei Xue. I would also like to thank the UMTS Forum Steering

Group and the following UMTS Forum colleagues for their dedication in the preparation and

direction of this report: Eduardo Snchez Fernndez, Paul Le Rossignol, Bosco Fernandes,

Jean-Paul Rissen, Jean-Paul Pallois and Colin Chandler.

May 2009

Jean-Pierre Bienaim

Chairman, UMTS Forum


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1Executive summaryThe UMTS Forum commissioned this report from Ovum Consulting to provide a global

analysis and insight into key issues surrounding the LTE/SAE1,2 ecosystem. The report

considers the relationship between LTE and other mobile broadband technologies; the new

services, devices and applications which will drive the success of LTE; and the drivers and

risk factors in the LTE ecosystem. The report is based on over 30 interviews with operators,

vendors, regulators and standards bodies, and end user research with 550 respondents in

the US, Korea, Japan, Germany, France, Italy, the UK and Spain. The report is supported by

Ovums insights derived from continuous analysis of the industry.

LTE has industry commitment

The report findings are very positive and show that there is considerable commitment and

co-ordination across the industry, with most leading mobile network operators planning to

deploy LTE.

NTT DoCoMo in Japan is a very active supporter of LTE, driven by the demand for high speed

data services in the country and the companys commitment to deploying new, market-

leading technologies rapidly. In the US, Verizon is a leading supporter of LTE, with plans to

introduce the first commercial services in the second half of 2010. China Mobile is actively

involved in LTE trials with vendors, and the company has announced plans to build a TDD

(Time Division Duplex)-LTE pre-commercial network in China from the middle of 2010,

followed by commercial trials in late 2010. It is Ovums assessment that commercial TD-LTE

services will be launched in China in the first half of 2011. LTE is also active in Europe, where

TeliaSonera has started network roll-out, with a commercial launch planned in 2010. NTT

DoCoMo, Telia Sonera, KDDI and Verizon Wireless have all announced their LTE and SAE

Evolved Packet Core suppliers.

Many major operators have already declared their intent to deploy LTE as the ultimate stage

of 3G Evolution. This will allow them to take advantage of performance improvements in the

radio access network and the service and operational benefits of an all-IP core network.

Nevertheless, global European operators such as Orange and Vodafone will rather deploy LTE

in 2011-2012, optimizing their legacy investments and network costs. In the longer term,

LTE, together with major business transformation by the operators, will provide the business

environment which will allow capital and operational cost reductions in an increasingly

competitive market. All major systems vendors have LTE product roadmaps and these

companies are engaged in joint programmes of technology trials in line with their market

and company strategies. Major alliances span the ecosystem which will enable end-to-end

solutions, with devices and applications to be offered in the early markets before the broader

1Long Term Evolution / System Architecture Evolution (LTE/SAE) is an evolution of the current 3GPP 3G

wireless network standards. LTE relates to the radio access network and SAE to the core network.

2 References to LTE in this report relate to both the LTE radio access network and the SAE core network,

unless it is only the SAE core network which is being referenced.


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ecosystem emerges. The LTE standards are being implemented by chipset vendors and early

pre-standard chipsets and devices are being used in interoperability and performance trials.These trial and testing initiatives receive cross industry support through the Next Generation

Mobile Networks (NGMN) Alliance3 and the LTE-SAE Trial Initiative4 (LSTI), the latter being

instrumental in the breadth of test and proving activities.

Ecosystem drivers support LTE

The introduction of icon-based mobile devices such as the iPhone has stimulated mobile

broadband, which is increasingly being used as a fixed broadband substitute. The availability

of higher quality content, including audio and video, will cause a significant increase in data

traffic. A projected six-fold increase in global IP traffic between 2007 and 20125 (driven

mainly by video) will impact mobile as well as fixed networks, with mobile data projected to

double every year from 2008 to 20136. This growth projection will be supported by LTE

operators' initial focus on data services. Network operators carrying this traffic will benefit

from the increased radio network efficiency of LTE; indeed, a recent report published by the

UMTS Forum7 indicates that the cost per megabyte for LTE services will be 83% lower than

Wideband Code Division Multiple Access (W-CDMA) and 66% lower than High-Speed

Downlink Packet Access (HSDPA). End users are enthusiastic for mobile broadband in laptops

and netbooks and also in mobile phones and personal media players. An improved user

experience is critical and devices must provide intuitive access interfaces to content and

applications. The lower latency and higher capacity access inherent in LTE will reduce

functional delays and render a wide range of applications and services more accessible.

Survey results from regular users of 3G data services indicate that LTE will stimulate the

greatest growth in demand in video and media services (35%40%), but it is access to

email, web browsing/search, online shopping and social networking that will be the most

used consumer services with usage growth of 15%25%. Location-based (GPS-linked) andin-car services are seen as major application areas that end users will find attractive.

Broadband users are demanding increasingly higher bandwidths to enable them to access

media-rich content. The primary demand for bandwidth is not just from music and video

downloads: newspapers, blogs, social web sites, commercial and topic web sites are

increasingly media-rich and benefit from being accessed through higher speed and lower

latency connections. Whilst these and many other services will develop rapidly in an LTE

3 The Next Generation Mobile Networks (NGMN) Alliance: http://www.ngmn.org/ (see Annex B)

4 The LTE-SAE Trial Initiative (LSTI) is a global industry group which aims to drive industrialisation of

3GPP LTE and SAE technology and demonstrate its capabilities against 3GPP and NGMN requirements.These activities stimulate development of the LTE ecosystem. http://lstiforum.org/

5 http://newsroom.cisco.com/dlls/2008/ekits/Cisco_Visual_Networking_Index_061608.pdf

6 http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-

520862.pdf

7 Global Mobile Broadband: Market potential for 3G LTE. http://www.umts-

forum.org/component/option,com_docman/task,doc_download/gid,1902/Itemid,12/


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environment, no one application (existing or new) will dominate the consumer or enterprise

markets. This breadth of demand will significantly reduce the risk to the industry of LTEbeing dependent on only a small number of drivers.

To support these service demands, end users will expect improved performance from their

network, which LTE will provide. On 20 MHz bandwidth, it can offer a peak download rate of

over 150 Mbit/s, a peak upload rate of 50 Mbit/s and up to 200 users per cell. This contrasts

with HSPA+ over 5 MHz bandwidth which is typically limited to 28 Mbit/s per cell. In practical

situations, modelling of typical user environments shows that typical LTE user data rates of

2-4 Mbit/s will be achievable, with capability to burst to far higher rates.

It will be essential for LTE devices to be multi-standard capablee.g. LTE/HSPA(+),

CDMA/LTE, GSM/UMTS/LTE, UMTS/LTEand also to be multi-band capable, depending on

the target market for the device and the frequency bands used in that market. For example,

devices for a North American market will require 700 MHz for the home market, and, ifintended for roaming in Asia and Europe, at least the 2.6 GHz and 2.1 GHz bands also. The

underlying capabilities are being developed by vendors and decisions on the mix of

capabilities will be determined.

Devices will become more complex, some with application-specific form factors which

vendors will have to understand and develop. New devices will need improved

characteristics: greater processing capability to deal with video processing and applications;

larger screens to provide a clean, usable, multi-touch interface; multi-standard and multi-

frequency band capable of operating in other networks for roaming and to increase coverage

area; multiple antennas; improved battery life and higher processing capabilities. The

industry will require focus to meet these challenges: fortunately, however, not all of them

have to be concurrently met in every device. It is expected that high end smart phone

devices will be a priority, although power management strategies will be needed to handlehigher processing and video demands.

There is a range of machine-to-machine applications currently supported by mobile

networks. The higher capacity of LTE will enable new areas, e.g. remote healthcare file

access and news reporting, but these will not be a major driver of LTE uptake.

The all-IP architecture of LTE, with a core network architecture which is able to interwork

with a wide range of radio access network technologies, will provide inherent operational

advantages and long term reductions in operating expenses. With broad industry co-

operation, the roadmaps of different sectors of the ecosystem are well aligned creating

momentum for LTE, which will help the mobile industry develop the expected new business

models to serve new vertical markets.

A key factor for LTE deployment is spectrum availability. Alignment within and between

regions is required to support roaming and create market scale for devices. The 2.6 GHz

band has been reserved as a 3G extension band and is suitable for LTE,

WCDMA/HSPA/HSPA+ and WiMAX. The interest for additional spectrum in the 2.6 GHz band

lies in the availability of large channel bandwidth (up to 20 MHz bandwidth) which will enable

LTE to fulfill its potential. In Europe, Norway and Sweden awarded 2.6 GHz spectrum to

operators in 2007 and 2008, respectively, and other countries will follow suit from early


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2009. The key band in the US is 700 MHz, while the 2.1 GHz band will be most prevalent in

China and Japan.

During the 25 year growth of the mobile industry, many valuable lessons have been learned

in terms of standards development, concept testing and ecosystem development. These have

led to an essential, more structured approach being taken to develop the new ecosystem.

The LTE ecosystem will incorporate a breadth of devices and components, software,

applications and services, new business models and players in the value chain. These

changes will build on Web 2.0 and its enhancements, which fundamentally change the way in

which information and services are shared across the internet. All of these devices,

applications and services will be part of an ecosystem which will be broader and deeper that

that for any previous communications technology. The broadening of the ecosystem is itself

a disruptive influence and one of which the industry needs to be continually aware. It will be

a challenge to adapt to these and any new disruptions, but they must be responded to at all

levels, not only to generate acceptable return on investment but to allow operators tosurvive.

Risks for LTE

The development of the LTE ecosystem is not without challenges and risks, which are

discussed in more detail in Section 7 of the report.

With the economic climate creating uncertainty in all markets, its impact on the LTE

ecosystem specifically is difficult to judge and further assessment in this area is

recommended. As well as influencing the attitude of end users to adopt new services, the

economy may also impact the speed with which the majority of operators deploy LTE beyond

the initial commercial installations. The scale of these deployments is crucial to device

vendors, which need market scale and certainty to bring volume production economies.

Operators and service providers have to decide how they can achieve the greatest return

from their network and services. Expected revenue streams are threatened in two main

areas. The first concerns the battle for the customer and how the services delivered to

devices are controlled and managed. If the network operator controls its own application

store, it will be able to retain a greater share of end-user revenue than if the applications are

provided from an externally controlled managed device platform (e.g. Apple or Nokia

application store). However, whilst the device vendors currently have the upper hand,

network operators can make good returns on broadband access revenues and avoid all the

store development costs. The second concerns lucrative voice services. If devices are allowed

to support VoIP clients, then internet-based voice service providers will be able to channel

revenues away from the operator.

Operators will need to sustain their existing networks as LTE is rolled out. Some operators

will continue to deploy their HSPA/HSPA+ and Evolution-Data Optimized (EV-DO) networks

as they introduce LTE. If too many operators delay their LTE deployments due to competition

for capex and focus primarily on HSPA/HSPA+, then the demand for applications and devices

will impact the development of the LTE ecosystem. However, the applications developed for

HSPA/HSPA+ networks will all contribute to and complement the eventual LTE ecosystem.


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Having said this, consumers will expect a consistent end user experience, in terms of look

and feel, as they operate across different networks.

Relatively straightforward devices such as USB dongles and PC cards will come to market

early. The full benefits of LTE will require handheld devices, which are expected to become

available in 201112. The risk is that without an adequate supply of devices the ecosystem

could replicate the slow introduction of 3G in the early part of this decade. We recommend

that all players in the value chain assess and strengthen their partnerships, which are so

important in this area.

The cost of intellectual property rights (IPR) licensing has been an issue within the industry

for many years. LTE devices will need to support pre-LTE standards (to allow non-LTE voice

services and roaming to non-LTE regions), and may also need to include other licensed

technologies such as video codecs and mobile graphic functions. These incremental IPR

licensing costs will increase the costs of devices, which will be an inhibiting factor as theindustry tries to get new devices and services accepted in the market.

In summary, although the industry is well co-ordinated, wide-scale LTE deployment will take

some years to achieve, during which time some of the advantages to operators (e.g. long

term cost reduction) will only partially be achieved. To help manage the risks and enable LTE

to be brought into wide-scale service, we recommend that the industry should consider

further opportunities to strengthen and extend partnership arrangements at all levels.

End user expectations and needs

Services continue to move from fixed to mobile networks in all markets, and wireless is the

access technology of choice for services in developing countries. We expect to see the trend

of fixed to mobile voice migration replicated with broadband access bringing considerablenational economic benefits. There is, however, no killer application for LTE. The capabilities

of mobile broadband will serve a wide constituency of needs; in fact the access technology

will become increasingly less important to the end user as applications and services become

more uniform across different platforms. The breadth of services which might develop is no

easier to foresee than it was for the internet at its inception, from which a wide range of

applications and services have emerged.

The main conclusions drawn from our end user survey are thus:

users in all regions expressed a clear interest in having their main fixed network internet

services (email, browsing and information search) available on a mobile broadband

device. Accessibility is the key.

access to music and video media rates highly. Mobile TV, video calling and video

downloading show the strongest growth prospects.

users are receptive to new ideas and new technologies. However, the opportunities for

enhancements to consumer devices are not yet understood or appreciated by consumers

and it will therefore take time to fully develop this aspect of the market.

By 2020, LTE is expected to be the dominant mobile technology and LTE-enabled device

volumes will be higher than those for any other network technology. LTE users will be able to


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access services over existing networks (e.g. HSPA/ HSPA+, EV-DO) which will be supported

within their deviceseven in the early daysenabling national and international roaming.

In summary, the report findings indicate that rapid and effective progress is being made

across the industry to bring the whole LTE ecosystem to market, with the necessary

commitment from all parties to bring a major evolution of technology, devices and

applications to market.


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2IntroductionThe Third Generation Partnership Project (3GPP) is defining the Long Term Evolution (LTE)

standards for a new high-speed radio access method for mobile communications systems.

These standards incorporate the System Architecture Evolution (SAE) which provides a much

simplified all IP core network architecture and which is able to support multiple types of radio

access network.

The successful introduction of LTE to the market is dependent on a healthy and strong

ecosystem, which will encourage competition and technology innovations.

The UMTS Forum objective in commissioning this report was to help the industry understand

the way in which the LTE ecosystem was developing: the products and services which will be

enabled; the dependencies within the ecosystem; the relationships between LTE and othertechnologies; and the opportunities and risks facing the development of a buoyant

ecosystem.

What is LTE?

Long Term Evolution/System Architecture Evolution (LTE), also called 3GPP E-UTRAN (Long

Term Evolution of UMTS Terrestrial Radio Access Network), is an evolution of the current

3GPP 3G/UMTS wireless network standards, the technical aspects of which are well defined

and there are many papers which describe the technical and systems characteristics.

A main objective of the Evolved Packet System (EPS), consisting of LTE and SAE, is to

support IP multimedia services, including VoIP and high speed data applications, with an

always-on end-user experience comparable to that of fixed internet access, and at a lowercost per bit. This is achieved by a flatter network architecture, improved spectral efficiency,

providing a more flexible spectrum deployment, lower opex costs and better integration with

other open standards such as WLAN and WiMAX.

A major benefit of LTE is that it has a flexible channel bandwidth requirement and can

operate in channels of between 1.4 MHz and 20 MHz. The channel bandwidth is key for the

delivery of higher access speeds. With a 20 MHz bandwidth, it can offer a peak download

rate of over 150 Mbit/s, a peak upload rate of 50 Mbit/s and up to 200 users per cell. This

contrasts to HSPA+ over 5 MHz bandwidth, which is typically limited to 28 Mbit/s per cell. In

practical situations, modelling shows that typical LTE user data rates of 24 Mbit/s will be

achievable, but with capability to burst to far higher rates. Thus the 3GPP LTE radio

technology is optimized to enhance existing 3GPP networks by enabling significant new high

capacity mobile broadband applications/services and providing cost-efficient ubiquitousmobile coverage.

Operators are motivated to move to LTE as:

it supports a flatter network architecture which reduces the radio network controller

(RNC) layer, leading to a more cost effective network, with reduced capex and opex

there is wide industry support to develop and build the essential ecosystem


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it enables higher performance, lower latency services to be offered to corporate and

consumer customers

it provides a natural evolution path from UMTS (WCDMA and HSPA/ HSPA+).

The initial standardisation of LTE was completed in 2Q 2009.

The two UMTS Forum White Papers - Towards Global Mobile Broadband: Standardising the

future of mobile communications with LTE (Long Term Evolution)8and Mobile Broadband

Evolution: the Roadmap from HSPA to LTE - describe the technical aspects of LTE and its

evolution in more detail.

The LTE ecosystem overview

The ecosystem interest groups

The LTE ecosystem will be larger than that for any communications technology to date. It is

not only the operators, service providers, device and component vendors, application and

platform developers, content and services providers which will enable end users to enjoy the

performance benefits and wide-scale availability of LTE technology. The ecosystem will

include the regulatory and standards bodies, the consumer and business markets served,

and the business models of the participants. This latter point is one which will need to be

grasped by the mobile network operators (MNOs). Just as device platforms have opened to

allow thousands of applications and services to be developed and bought by consumers, the

network itself will provide service development platforms which will allow third party

developers to provide network-based capabilities. These points are discussed later in this

section of the report.

The collaborative initiatives being undertaken in the industry are co-ordinating these playersto allow the full benefits of LTE to be brought to the worlds market efficiently and in-step.

Figure 2.1 illustrates the major interest groups in the ecosystem and their relationships.

8http://www.umts-forum.org/component/option,com_docman/task,doc_download/gid,1904/Itemid,12


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Figure 2.1 Illustration of LTE ecosystem

Source: Ovum

The foundation group in Figure 2.1 will have the greatest number of contributors and will

grow most strongly as LTE networks are deployed. The performance characteristics of LTE

broadband will expand the number of applications developed and draw new vertical markets

into the ecosystem, with sector-specific devices, interfaces and applications.

As Figure 2.1 illustrates, there are interactions between many of the industry players.

Information, interdependencies and collaboration flow in all directions.

An example of the collaboration needed in the ecosystem, and of an application outside the

traditional mobile phone domain, is the inGeo service development from Qualcomm - anapplication for use in existing cellular networks and LTE environments. The solution, with

applications in non-cell phone personal location devices and related services, is based around

cellular technology and assisted-GPS chipsets which will be incorporated into application-

specific devices. Service control and application servers will provide the capabilities to deliver

a complete solution. The service development and deployment requires cooperation across

the ecosystem, between the chip vendor, mobile carrier, application service provider, device

manufacturer and distributor to bring a complete end-user solution. The inGeo reference

system will expand the ecosystem further. It will allow third party devices such as motion

sensors or other systems to be incorporated into the end solution, which might be used for

package tracking or perhaps location-based telemetry systems.

In the US, Verizon is developing its LTE Innovation Center in collaboration with two of its

primary vendors for initial LTE network deployments, Ericsson and Alcatel-Lucent. The centrewill allow device and application developers to test their products during the development

stage and leverage the centres expertise in deploying mobile broadband solutions, service

integration and network hand-off issues. The centre will focus on three major product areas:

consumer electronics and appliances; machine-to-machine products that wirelessly deliver

information between devices specifically designed for fields such as healthcare, security and

utility monitoring; and telematics applications, such as GPS solutions for vehicle fleet

tracking.


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The components of the broadening ecosystem are considered in Figure 2.2.

Figure 2.2 What does the ecosystem foundation group comprise?

FoundationGroup

Ecosystem components

Infrastructuresuppliers

SAE/EPC, LTE radio access, antennas, power units, amplifiers, servers, enclosures.

New niche vendors entering market with protocol stacks, specialist chipsets

End userdevice vendors

Personal devices: Handsets, personal media players, laptops and netbooks, gamesconsoles, GPS/navigation, OEM devices and branded end user devices

Consumer electronics: cameras, media centres, in-car entertainment, vehiclediagnostics, TV

Industry-specific devices: telemetry, remote monitoring, security andsurveillance/security, financial transaction/POS terminals; health monitoring/ display,control systems

Service/content

providers

Services: voice, text/media messaging, broadband, video/TV, location-based services

Content: Music, video, games, special interest groups

Applications: Software services, managed services, productivity services

Integration with Web 2.0 content; portals; personalised delivery

Managed device platforms

Testequipmentmanufacturers

For lab and field test of systems, devices, RF performance, software and hardware test,integration, environmental, development, conformance, interoperability and acceptancetesting.

Chipset anddevicecomponentsmanufacturers

Baseband modems, baseband and power management, RF transceivers, applicationprocessors, protocol stacks, embedded software, browsers, voice recognition, audioand video codes, keypads, batteries.

Softwaredevelopers

Platforms and operating systems: Java, Linux, Palm OS, Symbian, Windows CEWindows Mobile, Android.

Middleware and embedded software: browsers, native applications/games.

Development tools and software development kits

Applications: Tens of thousands and growingsocial networking, video/photo sharing,music sites, blogs, news, games, travel, community and special interest groups

Source: Ovum

Non-voice mobile services will be increasingly important components within the mobile

ecosystem, while voice and basic data (SMS) will become relatively less important and the

widening ecosystem will become more complex. It will go beyond the traditional mobile

network ecosystem to incorporate a broad range of internet applications, new services,

devices and content delivery mechanisms.

This complexity brings with it a challenge for LTE. In a larger ecosystem, there are a greater

number of relationships and dependencies which have to work effectively for the fullopportunities for LTE to be realised.

For the purpose of our analysis the ecosystem is divided into three component groups,

shown in Figure 2.1: the foundation group; the enabler group and the momentum group. In

reality, however, the boundaries between groups are not so strictly defined.

the foundation group is formed by the entire vendor community, including chipset

component vendors, device vendors, infrastructure suppliers, test equipment

manufacturers, software developers and service/application providers. Members of this


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group work together to provide three LTE-related product groups: LTE infrastructure

equipment; user devices, encompassing handsets, laptops, application specific devices,gaming consoles and consumer electronics, all of which provide access and interfaces to

the third group; content, services and applications

the enabler group is formed by standardisation bodies, the regulators and industry

bodies. Through their work, the group develops and provides the technology standards,

provides the enabling regulatory framework and policy, and ensures industry alignment

for LTE development

the momentum group is formed by operators worldwide. Their global support has built a

strong momentum for LTE development, which has encouraged vendors to deliver the

first commercial products to meet the operators deployment roadmaps in 2010. Once

LTE is introduced, the healthy growth of the ecosystem is dependent on operators

commitment to deploy their networks. This will create the momentum for all members of

the ecosystem to invest in further development.

The momentum and foundation groups are highly active in the ecosystem. They provide

essential inputs to the enabler group for standardisation, regulatory decision making and the

industrys inter-operability test programmes. The progress made by the enabler group and

the decisions that it makes will influence operators LTE deployment strategy. All groups are

closely linked in the ecosystem and are working to achieve the first LTE commercial

deployments.

Previous generations of mobile network systems and infrastructure have been developed

around vertically integrated technologies, services and applications i.e. based on specific

devices/handsets, radio access network technologies and core network systems with

associated support services. These have underpinned network operators' and service

providers' core business. The ecosystem for these networks and services was bound by voiceand basic data (SMS, MMS) services with low speed networking access. The availability of

Universal Mobile Telecommunications System (UMTS) serviceswith their associated

devices, applications and attractive service bundleshas caused the UMTS ecosystem to

start to grow to support WCDMA and HSPA services.


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Figure 2.3 Each generation ecosystem increases in size

Source: Ovum

As Figure 2.3 shows, the supporting ecosystem layers of the foundation group are

expanding. To quantify one area of this growth, a recent audit of applications9 for Nokia

phones counted over 60,000 total applications, broken down into the following types:

9,000 Nokia S60 platform applications (only 1,000 are available on Nokias on-device

download store)

45,000 Java applications

between 5,000 and 7,000 widgets (build for Web Runtime)

between 5,000 and 7,000 Adobe Flash applications.

The number of S60 (i.e. native) applications available on Nokias download store can be

compared directly to Apples App Store. Estimates as of January 2009 suggest that there are

over 15,000 applications available for the iPhone and iPod Touch. The Nokia S60 platform,meanwhile, is used in a wide range of Nokia and other vendors devices. This provides access

to an addressable market for developers of over 180 million devices shipped. It is this scale

which attracts so many developers to the market.

With these numbers of developers involved, co-ordination is essential. Alcatel-Lucent has

launched the 'ng Connect Program', to help create the ecosystem rapidly. It will provide an

environment in which infrastructure, device, application and content companies can rapidly

develop and deliver next generation services and applications to service providers,

enterprises and consumers.

New sources of revenue are needed

There is inexorable downward pressure on voice revenues and mobile network serviceproviders have to find alternate streams of income and/or reduce costs. In the fourth quarter

of 2008, Ovums quarterly interconnect benchmark 2008 shows an average mobile

9 Source: Forum Nokia


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termination rate in the EU2710 countries of 8.1 euro cents per minute. In May 2009 the

European Commission issued guidance on mobile termination rates indicating that ratesshould be reduced to be in line with fixed call termination and (with a few exceptions) that

the guidance should be implemented by 2012. This would represent a reduction in the order

of 40% from current levels.

Not all of the thousands of applications will be revenue generating, but many are. Operators

may create their own application platforms for device service delivery or partner with

application platform operators/ owners. The latter option has the benefit for network

operators that by working with an established platform owner they have access to stable

service management, without reduced levels of capital and operational investment for the

operator. Device platforms are considered further in Section 4.3 of the report.

Within the core network, migration to LTE will need to be approached by MNOs in the same

way that fixed network operators have viewed next-generation network (NGN) deployments- long term and holistically. It will be part of a process for transforming their business to

adapt to an IP-centric world. To benefit from the efficiencies that LTE holds, mobile operators

must undertake a major overhaul of their businesses, migrating from their legacy networks,

systems, business processes and working practices. New operational systems and processes

will be required to effectively manage the new architecture. Operators will need to shift their

focus from being technology, product and network based, and move towards becoming

software-led, service-driven and customer-centric businesses. The use of agile business

processes and third parties (such as systems integrators and application developers) for

outsourced, hosted or managed services will be needed to reduce costs and improve time to

market.

This transformation will enable operators to introduce service delivery platforms which will

enable the core network to be opened up to third party developers to develop servicesaccessible from a range of different end user devices - mobiles, televisions, laptops and

other devices - spanning consumer and enterprise applications. The convergence of customer

data storage will allow end users to flexibly access and control their network-delivered

services across fixed and mobile networks, leading to new service opportunities and helping

to reduce churn, as the customer experience becomes more integrated with the network.

Common components in the ecosystem

The performance characteristics of LTE will lead to many different types of end user device

and consumer electronics systems in the ecosystem. Within these, there will be three major

service components to provide access to most services: the local client or device, web-based

or remote service resources, and a means of connectivity between them, as shown in Figure

2.4.

10 EU27 refers to Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland,

France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, the Netherlands,

Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.


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The form of the local client/device will be determined by its function. As the power of devices

increases, applications become more complex and users expectations increase, so LTE willbecome the mobile access technology of choice. LTE has the advanced capacity and low

latency to satisfy emerging market needs.

Figure 2.4 Key components for service access

Chipsets Screen Local content

and services

Local client /device

Web or remoteservice

resources

Connectivity

Power User interface OS / applications Memory

Shared content,data and media

Cloud applicationsand services:

ADSL Fibre

3G

LTE WiMAX

WiFi

Chipsets Screen Local content

and services

Local client /device

Web or remoteservice

resources

Connectivity

Power User interface OS / applications Memory

Shared content,data and media

Cloud applicationsand services:

ADSL Fibre

3G

LTE WiMAX

WiFi

Source: Ovum

The common factor which underpins the development of the consumer sector in the

communications industry, and which is increasingly providing opportunities in the overall

consumer electronics sector, is the need to be able to access the breadth and depth of

applications, service and content available on the web. Moreover, we see consumers

requiring increased access bandwidths with reliable performance.

The trend in this direction is exemplified by the way in which users perceive and use new

products. Many users initially considered the iPhone as an evolution of the iPod, to be used

to listen to music (as previously), but with the additional capability to watch stored videos.

However, the connectivity which allows access to web content, applications and services has

transformed the way in which users view and use the device, which can access a much

broader range of content and be used in ways that they had not anticipated.

The PC/laptop category in Figure 2.5 is distinct in that nearly all of its capabilities are added

after the purchase of the basic product. Application software (which may be bundled) is

added as needed, and open platform initiatives are geared to fully open platforms. Netbooks

are in a similar situation, but with the absence of a CD drive. The use of the web connectivity

is increasingly apparent in phones/devices and games consoles, which, despite having most

of their functions embedded, still allow applications and services to be downloaded. By

contrast, the other devices shown in Figure 2.5 are only starting to evolve and incorporate

networking connectivity.


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Figure 2.5 Different services share common components

Common functions:Web access

(applications, servicesand content)

+An increasingly

high speedconnection

Phone/voice

device

PC /laptop

TV/mediaplayer/STB

Netbook

Surveillance

Gamesconsole Still and

video

camera

E-bookreader

Different categoriesof devices withunique functionsand user interfaces

Common applications,services and content useable from theInternet

LTE can serve each of thecommon functions and canserve each of the devicecategories

Common functions:Web access

(applications, servicesand content)

+An increasingly

high speedconnection

Phone/voice

device

PC /laptop

TV/mediaplayer/STB

Netbook

Surveillance

Gamesconsole Still and

video

camera

E-bookreader

Different categoriesof devices withunique functionsand user interfaces

Common applications,services and content useable from theInternet

LTE can serve each of thecommon functions and canserve each of the devicecategories

Source: Ovum

LTE will also be integrated with consumer devices, particularly those with inherent mobility.

Just as mobile phones have incorporated cameras, so high performance cameras can

integrate wireless for download of results to storage or direct to social web sites. Vehicles

shall see online diagnostics, location-based information provision and in-car entertainment

services, all of which require full mobility and national real-time capability. With regards to

laptops, LTE can enable computer application and OS upgrades using software as a service

platform. Smaller, lower cost consumer devices will be developed as component prices fall.

The components of the ecosystem are discussed in more detail in Section 4 of the report.

All areas of the ecosystem are under development and proof of concept testing is underway

to assess the performance and interworking within the RAN and core network. Applications

and services are being developed for current networks (e.g. HSPA/HSPA+), and these will

develop further as LTE rolls out. Application-specific services and network-specific devices

will become available in volume to meet forecast demand from network operators.

LSTI and its testing work provides an efficient way to share experiences between the LTE

players, and thus widens the LTE Ecosystem.

Global LTE ecosystem roadmap

The LTE global ecosystem roadmap from 2008 to 2013 is shown in Figure 2.6. This and

regional variations are discussed further in Annex A.


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Figure 2.6 Overview of LTE ecosystem roadmap

Source: Ovum

To explore the LTE ecosystem, we conducted interviews with major players from each groupin which we discussed the following areas:

LTE development / deployment roadmap

views, plans and expectations for the LTE ecosystem

views on the future requirements for high speed mobile broadband

expectations for LTE device evolution

expectations for services and applications that will benefit from LTE.

In this report we will discuss the roadmaps of each group in the ecosystem in the following

sections:

Section 3: LTE enabled services

Section 4: Devices and infrastructure

Section 5: Drivers and barriers of the LTE ecosystem

Section 6: End user survey results

Section 7: Conclusions and recommendations.


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3 LTE enabled services

3.1 Mobile data applications will drive LTE

LTE networks, with their high capacity, high data rate capability and low latency, will provide

a better platform for many varied services and applications. Our industry survey indicates

general agreement that LTE networks will provide the best opportunity to date for existing

and new services and applications to benefit from mobile broadband networks. This is

reinforced by the growing support for LTE within the operator community. One major

European operator is reported to be planning to move from HSPA to LTE, without incurring

the costs of HSPA+ upgrades. The industry was also in common agreement that increased

data usage on mobile broadband networks will drive the deployment and take-up of LTE

services. In this section of the report we discuss a number of services and applications that

received the most interest in our survey, namely general data services, voice services, video

services, interactive services, location-based services and machine to machine services.

3.2 Consumer services

The industry would like certainty about where its user demand will come from. However, as

with successful internet services, the certainty is not possible to predict. Figure 3.1 identifies

some important LTE characteristics and potential consumer services. Whilst it is possible to

support many of these on pre-LTE networks, it is the wide-scale availability, the capacity, the

performance characteristics of the access and core networks, and the considerably broader

ecosystem that will differentiate LTE from its predecessors.

The results from the consumer survey are provided in Section 6.

Figure 3.1 Consumer services enabled and enhanced by LTE

Sector LTE EcosystemComponents/ characteristics at service,

application, device level

Consumer services(Note: * indicates machine to machine

service)

Devices anduser

interface

Application/servicespecific

Innovation in all components: OS, protocolstacks, processors, antennas, batteries,displays, large and multi-touch screens.Intuitive interface; accessible services

Open or managed device platforms enablenew applications, services, content, portalaccess

Partnering key to success

Devices for broad and narrow markets

Compelling content delivered to 1000s ofmarket segments.

Internet All that Web 2.0 comprises: communication,interoperability, sharing, collaboration

Wide base of data for consumer added value,marketing

Social networking, video/photo sharing, musicsites, blogs, news, chat, games, travelinformation, community and interest groups

Internet TV, media streaming and download

Personalised and discovery services


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Navigation,

location

GPS and cell location data

GIS servicesMapping data

Service directories

Location-based content

Presence/location informationLocation-based push-marketing

In-transit travel updates to itinerary

Transport Vehicle manufacturers

Government agencies

In-car entertainment systems

Bespoke chipsets and devices

Vehicle service centres

Content providers

Radio /TV services adapted for in-car use

Wide base of data for consumer added value,marketing

Car performance, efficiency and servicemonitoring*

Automatic updates to in-car applications /data bases

Location-based real-time info. for navigationand traffic updates*

Road tolling (maybe variable)*

In-car networking for entertainment gamesand media*

Financial Banks, credit card and financial sectorcompanies

Vending machinesPoint of sale terminals

Scanning and entry systems

Associated manufacturing and applications

Online mobile banking and e-commerce*

Integrated near-field communications*

Mobile wallet for payments, entry, vendingmachines, public transport*

Personalised payments based oncircumstances*

Health Health and dental practices, hospital services

Insurance company records

Monitoring devices

Scanners and display systems

Advice and diagnosis web sites

Mobile access to health advice sites

Personal data access*: clinical records, scans,x-rays

Remote diagnostics with video support*

National and international coverage*

Journalism Newspapers, journals, radio and TV stations,blogs

Still and video cameras

Personal news reporting

First to market blogs and news

Storage Home and server-based storage systems

Cameras still and video

Device and web storage applications, socialnetworking

Personal directory services

Remote user auto backup for laptop,

camera, audio*Auto archiving*

Security andcontrol

Building or car alarmmonitoring/reporting/security systems


Camera interfaces

Heating and air conditioning control

Security applications built into many services

In-building alarm monitoring / reporting

Cameras store and forward, or online

Heating and air conditioning control

Integration with control centre

Switches and cameras integrated*

HD surveillance/security*

Long term, high capacity storage*

Consumerelectronicsapplications

LTE and user interfaces

Applications:

Home gateway integration: printers, mediaservers, TV, gaming consoles

Multi-room; user-segmented

Home nodes/femtocellsCloud-based software/software as a service

E-book reader

Remote access to home network: printing,media centre, home gateway, security

Broadband TV connection

Managed services for consumer electronics

Camera backup: still and video

Online gamingCloud/web hosted applications

Content rich E-book applications

Machine to

machine

See items marked with * above

Source: Ovum


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General data services and applications

General data services include online browsing, email, information searching, blogging, social

networking, etc. which are already supported by existing mobile data networks such as HSPA

and EV-DO. Although these services do not require the high network speed and low latency

connections that real-time video and gaming services might require, the user experience is

always improved when a true broadband service with higher capacity and lower delay is

used. The respondents to our industry survey expect LTE to complement existing network

services, and expect that the improved quality of service will be particularly attractive to

premium corporate customers and high-end consumers. Although faster access to web

content is more of a convenience rather than a necessity, the faster browsing speeds offered

by HSPA+ and LTE networks will encourage users to view more content and feed the desire

for higher performance services (e.g. media rich services).

Users will not only increase their mobile network usage by volume, they will also changetheir behaviours and come to increasingly rely on mobile data services as they have

accessibility on the move. They will require information searches, news access and

communications to replicate their use of fixed network broadband. Users, especially those

keen on social networking, will also want to retain online connections to their personal

networks. Applications such as RSS feeds and instant messaging will keep mobile users

updated all the time, and, with the growing use of video in news feeds and messaging, will

generate increased capacity demands on the network. All of these services will be enhanced

by improved user interfaces.

The advent of higher performing mobile broadband will lead to converged applications and

mediaa trend which has already startedand will encourage fixed and mobile network

convergence.

Voice services

Although voice over IP (VoIP) capability is expected to become available on the LTE devices,

the options on how VoIP calls will be handled, including handover, require review and

agreement. There is wide-scale agreement in the industry that legacy 2G and 3G networks

will continue for many years and interworking with these networks will be sustained, which

sets the question of voice continuity across different access types. Voice services may be

handled in several ways:

multi-mode devices can be configured with GSM and UMTS capability, enabling voice

traffic to be carried over an existing GSM or UMTS radio access network. This will enable

LTE devices to roam nationally and internationally beyond LTE coverage area.

LTE network operators who run their own GSM or UMTS networks may choose to godown the route of voice over LTE via generic access (VoLGA). The recently formed VoLGA

Forum aims to define a set of specifications for enabling delivery of voice services over

LTE access networks based on the current 3GPP Generic Access Network (GAN) standard,

which will enable mobile operators to deliver mobile voice and messaging services over

LTE access networks based on upon this. By means of an access controller in the LTE

evolved packet core, VoIP voice calls and SMS data originated over the LTE radio

interface can be routed and handled by associated GSM or UMTS core networks. This


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approach means that the GSM network (and, in time, the UMTS network) can be

gradually run down as users migrate to LTE networks, enabling operators to benefit fromearlier opex cost savings.

Other technical solutions can be foreseen, such as Circuit Switched (CS)

Fallback (when a voice call which is being established is handed over from the

LTE network to the 2G or 3G network) or Voice over IMS, however, the

recommendations for these have not been yet finalised within the 3GPP arena.

The main issue to be solved is to find a good solution which minimises the

interruption gap in the call which is caused by the swap between circuit and

packet modes. Thus, it is highly recommended by the UMTS Forum that 3GPP

Release 9 be not frozen before a proposal for a good solution to integrate voice

in LTE is included.

VoIP over broadband, support for which is included in the LTE standards. Since LTE will

be an overlay network on top of the established 2G and 3G networks, it will be theoperators decision whether or not to implement or allow VoIP on its LTE network. With

voice still remaining the major revenue generator for operators and service providers,

the main push for internet-based VoIP will come from those LTE operators which do not

have complementary 2G or 3G networks and from third party VoIP services, such as

Skype.

Mobile network operators and service providers will wish to retain and protect voice

revenues, but will be under regulatory pressure to match mobile termination rates against

actual attributable network costs. The uptake of VoIP will mainly depend on an operators

strategy, and of the implementation of IP Multimedia Subsystem (IMS) if a fully featured

service set is required. Multi-mode handheld devices (which support LTE for data and UMTS

for voice) are expected to be the main end user product, as operators generally consider that

LTE will be used primarily for data-only services for several years after introduction.

Video related services and applications

Our industry survey indicates that video services, especially high quality video, will be one of

the services to enjoy greatest benefits from LTE, as they demand high capacity, high speed

and low latency network support. Pre-HSPA mobile networks struggle in every one of these

aspects to deliver a satisfactory video service to end users. HSPA is already embedded in

personal media players and video handset devices, developing the market in which LTE will

provide an ideal network to support further take up of mobile video services.

There are two primary types of video service, namely streaming video and live video.

Streaming video services normally use a cache and play method to minimise the impact of

a poor network connection, as users can accept some delay at the beginning of the service.

Some video on demand services (i.e. IPTV) allow users to download the full video content to

their local drive and play it as and where they wish. Streaming video services are becoming

increasingly popular for mobile broadband users.

Live video service, on the other hand, requires high network speed and low latency, and

because of the bandwidth required, operators normally prefer to introduce live video as a


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broadcast service. Users who are willing to pay for live video services are not tolerant to

interruptions, and they expect high quality, live video service on demand.

Mobile-TV services will include both streaming and live video services, which our end user

survey indicates will be among the most popular LTE-enabled services. In due course these

will drive network use but operators currently do not feel that there is demand for such

services. The success of mobile-TV will depend on the operators evolving business model

and relationship with content providers. The business model will, however, be subject to the

current trends in the traditional broadcast markets, in which subscription and advertising

based channels are under pressure from multi-channel broadcasting and internet-based

content (catch-up TV, social networking, user-generated content, blogs, news sites).

Operator respondents recognise that there will be a market for high-quality mobile

broadcasting to meet user expectations. The technology of choice (e.g. MediaFlo, DVB-H,

DVB-SH, MBMS, IMB [Integrated Mobile Broadcast], etc.) will depend on region, and has still

to find real traction. Those requiring a dedicated overlay network may find the business caseto be more challenging. Unicast and internet-based TV and media will become extremely

popular over HSPA, HSPA+ and LTE. Users will have raised expectations of internet-based TV

services (broadcast programmes and catch-up TV) because of their experience of the

services available on their fixed network broadband internet access.

The current availability of mobile devices with Wi-Fi capability provides an alternate means

of accessing internet-based video content. In a recent global survey, Ovum found that 89%

of users who use their mobile phone to access online video did so using their mobile

network, and 20% accessed the service via a Wi-Fi connection (a small proportion of

respondents use both access methods.)

Given that Wi-Fi access has only been widely available on phones since 2007and even

then, mainly on phones with an open OS platform such as Microsoft or SymbianWi-Fi isbeing adopted fairly rapidly in some markets. As mobile operators have been slow to roll out

flat-rate data packages on their high-speed networks, Wi-Fi has provided a cheap alternative

means of accessing multimedia content on the phone. With vendors such as Nokia pushing

Wi-Fi access on Ovi, Wi-Fi based services may become more of a threat to the operator

channel in future. However, the advent of faster-speed networks coupled with flat-rate

affordable data packages should alleviate this threat to some extent, providing operators get

to market quickly.

As the LTE market develops, operators will have to assess the market take-up of Wi-Fi

network devices, which may influence strategy for in-building and hot-spot femtocell

deployment, and decisions regarding incorporation of Wi-Fi capability within the femtocell.


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Figure 3.2 Content / devices preferences

0%

20%

40%

60%

80%

TV device 63% 58% 33% 32% 27% 17% 10%

PC 47% 43% 27% 28% 32% 19% 18%

PMP 17% 16% 11% 10% 20% 6% 9%

Mobile phone 9% 13% 11% 7% 15% 5% 9%

Hollywoodfilm

TVprogramme

Sport Homemovie

Musicvideo

Adult Shortclips

0%

20%

40%

60%

80%

TV device 63% 58% 33% 32% 27% 17% 10%

PC 47% 43% 27% 28% 32% 19% 18%

PMP 17% 16% 11% 10% 20% 6% 9%

Mobile phone 9% 13% 11% 7% 15% 5% 9%

Hollywoodfilm

TVprogramme

Sport Homemovie

Musicvideo

Adult Shortclips

Source: Ovum - Video trends: the mobile story. March 2009

Figure 3.2 illustrates the findings of recent Ovum research, which indicated the device

preference for viewing different types of video content. With three of the device categories

PC/laptops, personal media players and mobile phonesall having inherent mobility, the

results demonstrate latent potential for mobile TV and video content. As LTE service plans

mature over the next few years, further market research can identify content requirements

and regional differences at a more granular level.

A recent report from Cisco11 projects that mobile data traffic will double every year from

2008 to 2013, and that almost 64% of this traffic will be due to mobile video at the end of

the period. Furthermore, the report indicates that by 2013, 80% of traffic will come from

mobile devices and handsets which are connected at access speeds greater than those

offered by 3G mobile. The Asia Pacific region is projected to account for one third of mobile

data traffic by 2013, while Western Europe exhibits the highest level of mobile video traffic,

with a projection that 73% of mobile data traffic will be due to video services.

The take up of mobile TV services, whether broadcast or streamed internet-based content,

should be monitored over the next two years. Mobile service providers will need to segment

their offerings and encourage access to free sites to generate mobile broadband traffic,

offering some advertising-supported content and providing premium content packages where

possible. The former will target the mass market, while the latter will appeal to a smallersegment of users. Service offerings will also need to be packaged for mobile phone users and

those using personal media players, as viewing expectations will be different. The availability

of subscription packages which do not impose monthly download limits will be essential. If

11 http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-

520862.pdf


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these services become popular, then the high traffic demand generated by such services will

be a major driver for increased LTE rollout to increase national coverage and to drive greatercell density.

Real time and interactive services

Our end user survey identifies interactive services as another type of service that will place

demands on LTE service providers. Voice services and video telephony/video conferencing

are prime interactive real-time services. Mobile gaming is a typical interactive service which

requires a low latency network and high capacity data storage, and backup will require

network capacity.

Mobile gaming has not been successful on the current generation of 2G and 3G mobile

networks. The majority of handheld mobile gaming consoles choose Wi-Fi to support network

group gaming, and our survey indicates that operators recognise that the market demand formobile gaming is low. Operators are concerned that there are factors beyond the network

which will influence the gaming community. The network operator will provide the gaming

market with network performance and will help create device availability (probably games-

specific) to support the end user demand. However, the end user requirement for low end-

to-end latency will also require the gaming server and the gaming device to have

performance to meet the end users expectations. Although gaming server performance is

improving as the popularity of network supported gaming consoles increases, mobile gaming

device manufacturers are expected to focus on improving their device performance,

especially in the areas of graphics design and game design. It is clear that the gaming

industry is currently less focused on mobile gaming, but it has made rapid developments to

improve the performance of standalone, fixed internet and Wi-Fi consoles which have already

become features for standard gaming consoles. Given their powerful performance, it is

questionable how much value mobile broadband will bring to these devices.

It should be noted that mobile gaming does not necessarily mean that all games will require

powerful handheld terminals. Internet gamingalong with many other internet applications

will move to the mobile internet domain. Games such as World of Warcraft, Second Life (a

virtual social world) and WAR (Warhammer Online: Age of Reckoning) attract tens of millions

of users worldwide. With mobile broadband support, users will increasingly be able to play

games away from their fixed network access. All they will need is a laptop/PC with mobile

broadband (via a USB dongle/data card or embedded chipset).

High capacity data storage and back up capabilities are already being built into digital

cameras and video cameras with the introduction of HSPA into the devices. Other

applications in real-time monitoring and surveying services will also benefit from immediate

download of data to server and are being considered by the vendors and service providers.

Location based services

A major difference between mobile broadband networks and fixed networks is that the

former can be subject to location changes. This provides a huge opportunity for location

based services (LBS) which have very broad potential to integrate with high performance


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mobile services. General LBS include the updating of maps, provision of information on the

location of shops, service points, etc., depending on the location of the user.

As LBS become more intuitive to use, require regular updates when on the move and have

access to the sophistication of applications like Google Maps and Google Earth, they are

expected to drive network traffic to considerable volumes. Operators are strongly interested

in LBS as a route to providing true personalised services, and, with true broadband

connectivity, they will be able to take advantage of devices with embedded GPS to offer their

own and third party services, e.g. using Google Maps or similar.

Services such as these raise the possibility of new business models to be developed for

charging users or specialist service providers for use of network capacity.

3.3 Enterprise services vertical sectorsWhilst the business sector will use many of the consumer services, the flexibility to offer new

services to vertical markets (as shown in Figure 3.3) will require service providers to

reassess their approach to marketing, which includes many non-traditional markets and

service delivery.

Figure 3.3 Business services enabled and enhanced by LTE

Sector LTE EcosystemComponents/ characteristics at service,

application, device level

Business servicesNote: * indicates machine to machine

service

Refer also to Figure 3.1 (consumer services). Many components, applications and servicesidentified in the previous consumer service review also apply to the enterprise sector.

Devices anduser

interface

Applications, services and content, portalsand devices developed for specific verticalmarket sectors.

Industry-specific applications (based onstandard architectures): health, logistics,emergency services, retail, finance, etc.

Internet All that Web 2.0 comprises: communication,interoperability, sharing, collaboration

Wide base of data for consumer addedvalue, marketing

Corporate VPN access

Service delivery on the web - contentformatted for mobile broadband delivery

Transaction services with customers andindustry partners

Personalised content for customers

Targeted marketing

Navigation,location,transport

GPS and cell location data

GIS services

Mapping data

Service directories

Dispersed enterprise resources

Location-based content

Presence/location information*

Location-based push-marketing

In-transit travel updates to itinerary

Fleet monitoring speed, location*Logistics control*

Health and safety (driving time)*

Public transport in fleet services*

Road tolling*

Emergency service command and control

Nationalutilities and

services

Emergency services; utilities Live relay of incident*

Telemetry*


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Financial Banks, credit card and financial sector

companiesVending machines

Point of sale terminals

Associated manufacturing and applications

Online mobile banking and e-commerce

Integrated near-field communicationsTransaction service

Health Mobile access to health advice sites

Medical devices and records

Health and dental practices, hospital services

Insurance company records

Monitoring devices

Scanners and display systems

Advice and diagnosis web sites

Full-scale clinical records scans, x-rays,personal data access*

Remote diagnostics with video support*

National and international coverage*

Journalism Video and audio reporting tools adapted formobile delivery

High definition capabilities

High speed/low latency news gathering(without news gathering satellite services)

Storage ,security andcontrol

Corporate storage networks

In-building alarm monitoring/reporting


Cameras store + forward, or online

Heating and AC control

Back-up storage for field workforce*

Corporate security/CCTV archive*

Integrated with control centre

Switches and cameras integrated*

HD surveillance/security*

Long term, high capacity storage*

Industryapplications

Interfaces for telemetry devices

Remote polling systems

Remote office working

Push-to-talk/video

Emergency services support

Machine tomachine

See items marked with * above

Source: Ovum

Note: * Indicates machine to machine service

Machine to machine services

Machine to machine communications services are currently used in public safety, finance,

healthcare, utilities, etc. They require only low speed, low capacity network support, for

which GPRS/EDGE and 3G networks are well suited.

Our industry and end user survey indicates that machine to machine services will not be a

major driver of LTE uptake. There is general agreement that low capacity requirementapplications will stay with GPRS/EDGE and 3G networks for many years. Any machine to

machine applications which require a high capacity LTE network are expected to develop

over time, but specific examples are not identified, and current HSPA networks should be

able to provide a good data service for emerging machine to machine services. Ultimately,

service costs and total cost of ownership will influence the demand for and take up of LTE

machine to machine services.


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It should be noted that machine to machine users are not the usual business or consumer

groups. Their network requirements are often constant and, if the capacity demand is high,this would lead to high charges on a standard tariff. However, if operators have predictable

demand, they may be flexible and offer service to these users at a lower price, which could

encourage machine to machine services. An example of public safety service can be

considered with regards to the control and data from thousands of CCTV cameras being

gathered. Each camera may demand a constant 1-2 Mbit/s support which, as a proportion of

a cells uplink capacity, equates to about one fiftieth for an LTE cell, one tenth for an HSPA

Evolution and one fifth for an HSPA cell, this improvement being one of the advantages of

the lower interference inherent in OFDM technology used in LTE, compared to W-CDMA.

The mobile operator community perceives machine to machine as a long term strategic

market opportunity for LTE and, although not one that will initially drive high volumes of

product, one which provides an opportunity for mobile network operators to expand their

market. The vision for machine to machine is that LTEs higher capacity combined with alarge penetration of LTE modules in various device form factors in the consumer market and

in several vertical markets will generate a huge market opportunity for machine to machine

connectivity services. This vision may only fully materialize in 10 years from now, but is a

perspective that is certainly in operators minds.


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4Devices and infrastructure

4.1 Overview

The vendor community provides the foundation of the LTE ecosystem. Vendors work very

interactively in partnerships and alliances to help build their own success and that of the

industry. During the early stages of standards development, architecture design and systems

development, the vendors are the main drivers in the ecosystem. In this section of the

report we will discuss the chipset, user device, infrastructure suppliers and test system

vendors.

The timing of demand, the variety of services, applications and content, and the volumes of

LTE related chipsets will have a direct impact on the range and sophistication of LTE enableddevices. However, this aspect of the industry is very intertwined and successfully so, as it

allows new innovative companies to bring new ideas to market. Device vendors and software

developers interact to define and develop mobile operating systems and applications. With

the introduction of mobile data services, service and content providers have increased in

importance as they cooperate with device vendors, software developers and operators to

bring more services/applications to the mobile user market.

Test capability is hugely important to enable clean, functional products to be brought to

market and equipment manufacturers provide product testing support to user device vendors

and infrastructure suppliers. The test community plays an especially impor

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Documents