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The future billboard Working on many things at the same time, the tunnel vision sets in, so every once in a while, I try to take a I step back and reflect on where we are in LTE land.

What I see is a early market that has yet to find it’s purpose in life. Yeah yeah, consumers are buying devices like Samsung Galaxy III/IV and Apple iPhones that are LTE enabled at a rapid clip in the US, but at this point the device is driving the sale not the LTE itself.  

There have been a couple of interesting developments, such as Audi and GM deciding to leverage LTE for in car data links and even going as far as choosing to use VoLTE for voice. That’s a major step towards finding the killer app for LTE.AudiLTE_connect

However, those developments are in progress and have not actually resulted in any traffic yet, both are expected in 2014.

Consumers are driving traffic today. Looking through some public data, like Root Metrics reports on average data speeds, I am reminded by how inefficient the networks are.

Verizon vs AT&T LTE

Here are some results from gottabemobile.com that more or less concur the performance observed by Root Metrics.
iPhone 5 Verizon 4G LTE Speed Test Results
  • 8.52 Mbps download, 13.87 Mbps upload, 39 ms ping
  • 7.47 Mbps download, 13.70 Mbps upload, 38 ms ping
  • 10.21 Mbps download, 13.81 Mbps upload, 38 ms ping

iPhone 5 on AT&T 4G LTE Speed Test Results

  • 9.32 Mbps download, 13.69 Mbps upload, 47 ms ping
  • 9.11 Mbps download, 13.88 Mbps upload, 47 ms ping
  • 9.69 Mbps download, 16.20 Mbps upload, 48 ms ping
  • 8.96 Mbps download, 15.83 Mbps upload, 40 ms ping
iPhone 5 over Wi-Fi (Comcast Blast 50 Mbps) Speed Test Results
  • 8.52 Mbps download, 13.87 Mbps upload, 39 ms ping

So it’s hard for me not to notice a couple of elements to this story. Firstly, the mad rush to provide LTE coverage (schedule driven) has been, understandably, at the expense of quality. Here’s the difference:

LTESNR_chart

Important

The peak throughout of a 10MHz 2×2 MIMO with 3 PDCCH symbols, 5% extra overhead and 10% retransmissions channel is 58Mbps, with SIMO at 35MBps. So practical rates in the field are 26.4% of the peak rates with retransmissions. 

It doesn’t take a math genius to realize that 26.4% efficiency is an ROI buster.

So with 50,000 eNBs they currently carry maximally 750GBs over their RAN instead of the 2.9TBs they have already paid for. Simply extrapolating from Cisco’s 2013 VNI report, I get a projected data explosion like this:

CiscoVNI_extrap

Uhhh, isn’t the datapcolypse supposed to need about 800GBps  per operator in 2017? They’re blowing 2x that amount with poor efficiency!

 

 Making matters worse, ATT and VZW are starting to throw some additional spectrum into the markets. VZW recently announced they are adding 5000 eNBs with AWS spectrum, most likely ‘hotspots’ costing them $3.9B in a one time AWS spectrum buy plus ~$15K/eNB = $75M annually for the additional carrier. ATT has done a series of multibillion dollar deals to add in more 700MHz spectrum. 

ATT has been spending something on the order of $22B to build out and maintain an extensive WiFi network they claim offloads their LTE networks.

Here’s the rub, improving the efficiency to move their average is not as expensive as the offloading or spectrum additions they are doing. One more thing, SON should be doing some of the work for them in a very OPEX friendly manner. 

By cleaning up the network, making it more efficient, there is going to be an induced demand, yes, however having users use your product is not necessarily a bad thing. (I’ve already complained about pricing.)

Let me just say this is crazy. Reducing the network efficiency effectively increases your cost to provide service thus degrading margins. There are tons of levers to pull in the protocol as it is written, with improvements on the horizon. Wake up!

Ladies and gentlemen, the captain has illuminated the fasten seatbelts sign as some turbulence and or distruption is expected in this market.. 

PS: Verizon and ATT, I will make myself available to send you an invoice for, say, $1-2B and will turnkey a project to give you another 800GBps. You can sell your recent investments and return the money to working capital or the investors, or hold them for getting to 1GBps over the air with carrier aggregation in the future… (ok time for me to get back to work…)

Oscar

 

VZW Rule The Air Logo Couldn’t help but notice that Verizon completed the transaction of selling off it’s Lower 700MHz spectrum today. Key point is, as long as it doesn’t go to AT&T consumers are better off. OK that had to be said.

The markets and spectrum from their PR is:

Nortex Communications, based in Muenster, Texas, acquired the Texas RSA 6-Jack 700 MHz lower B-block license, which covers a four-county area northwest of Dallas. Panhandle Telecommunication Systems, Inc., based in Guymon, Okla., acquired the Texas RSA 2-Hansford 700 MHz lower B-block license, which covers 12 counties in the northwest part of Texas. Colorado Valley Communications purchased a partitioned A-Block license covering a five-county area in the Houston market.

The next bottleneck, once the spectrum gets diffused into the market, is the availability of chipsets that support this spectrum, Band 12. See the diagram below for a quick refresher.

700MHz spectrum chart

I am planning to do an overview of this situation next so stay tuned. Yea for us. We got a little more market freedom today. Hopefully this will encourage some of the smaller operators to deploy LTE and compete with the big guys.

Fist Bump

 

 

BTW, When’s the last time we saw Munster, TX or Guymon, OK in a tech industry press release? Shout out to you peeps. 

 

 

 

Below is excerpted from their site.

Verizon Wireless Completes Spectrum Sales to Three Rural Companies

Verizon Wireless has completed three spectrum license sale transactions following agreements reached late last year as part of the open sale process for its 700 MHz A and B Block licenses. Nortex Communications and Panhandle Telecommunication Systems, Inc. closed on their respective purchases this week. Colorado Valley Communications completed its purchase on January 16, 2013.

Nortex Communications, based in Muenster, Texas, acquired the Texas RSA 6-Jack 700 MHz lower B-block license, which covers a four-county area northwest of Dallas. Panhandle Telecommunication Systems, Inc., based in Guymon, Okla., acquired the Texas RSA 2-Hansford 700 MHz lower B-block license, which covers 12 counties in the northwest part of Texas. purchased a partitioned A-Block license covering a five-county area in the Houston market.

Verizon Wireless offered its lower 700 MHz spectrum licenses for sale to rationalize its spectrum holdings and enable more spectrum to reach the marketplace where it can be used for the benefit of customers. As a result of the sale process, Verizon Wireless signed agreements with seven companies, including one national carrier, five rural or regional carriers and one minority-owned firm. To date, three purchases have been completed and four remain pending. Verizon Wireless is also getting 700 MHz C block spectrum into the hands of 20 rural operators through its LTE in Rural America leasing program.

Metro announces they sold their first VoLTE phone in the Dallas market tonight (07Aug12), the LG Connect 4G Android™. This is a necessary step for Metro as they will now be able to offer simultaneous voice and data for the first time now (SVLTE) and helps address the lack of spectrum they face in a few markets. I imagine they will w

ant/need to go down from AMR 14.4 voice coding in the future (default for VoLTE) due to the lack of efficiency compared to the EVRC-B that they are using today but they can surely start there. Also note, with the IMS client on the LG Connect, this device can also technically (InterRAT) handover to a WiFi channel (assuming they have deployed edge security and ePDG in the network), so they can technically have offload very rapidly, no small cells to deploy. This could be very interesting.

BTW, SK Telecom and LG Uplus announced their launches today too, so there was apparently a race on to be the first in the world, although the Korean launches seem to feature HD voice with a wideband Vocoder.

Gold/silver/bronze finish for US and S.Korea…

 

The full Press Release is at the bottom…

 Now full disclosure here: I have been involved with MetroPCS’s (again should we go to MetroLTE?) LTE involvement from the time it was a what if scenario. OK, fast forward…so I’m reading Bloomberg, Reuters etc… and they are going on about the good results from MetroPCS. Let’s review. Reuters specifically says: 

At the end of the second quarter, the company said, about 8 percent of its subscribers were using its so-called fourth generation high-speed service, which is based on a technology known as Long Term Evolution.

The company’s service revenue rose 4 percent to $1.16 billion for the quarter. Quarterly average revenue per user was $40.62, up 13 cents from a year earlier.

MetroPCS posted a net subscriber loss of 186,000 in the second quarter. Analysts had been expecting its subscriber numbers to fall by 94,000 to 174,000, according to four analysts contacted by Reuters.

The company said it expects to boost subscriber growth with 4G LTE For All, a line of affordable 4G LTE smartphones it plans to launch in the second half of 2012.

“During the fourth quarter, we expect our 4G LTE For All initiative to lead to a return to subscriber growth,” Chief Executive Roger Linquist said in a statement.

Churn — or customer defection rate — fell by half a percentage point to 3.4 percent for the quarter.

So the key points that stuck out to me are:

  • Metro is shedding their prepaid voice subscribers but gaining sticky LTE subscribers. 
  • Metro expects to grow subscribers- LTE subscribers
  • OPEX doesn’t seem to be out of control with prepaid all you can eat LTE data users.
  • They are planning to refarm their CDMA spectrum using VoLTE and presumably an all LTE device line up.
  • Churn is down so customers seem to be happy
MetroPCS deployed LTE on their existing AWS and PCS spectrum. Many said they couldn’t be successful on such limited spectrum. Metro even made tough choices with their towers and antennae to deploy but not break the bank. That took some courage. Also worth noting, they are completely prepaid so customers are buying these smartphones outright. LTE smartphones to boot.
So the big (public) bets placed by Metro’s exec team like skipping EVDO and heading for LTE with their prepaid customer model intact seems to be working for them. This is a good thing for MPCS shareholders but a really good thing for consumers (with an interest in wireless services) in general. It must have been a moment to sit in their conference room and get the news that the bets are paying off. So obviously they have their work cut out for them, they need more LTE devices from more OEMs, they need more spectrum to both improve performance and meet the demand from their growing customer base, and to do that they will either need to buy more spectrum or deploy VoLTE (with the associated IMS integration, UE clients etc…) to help them refarm the existing CDMA spectrum. That’s a lot to get done!
Go MetroPCS!
Links: reuters.com, prnewswire.com


MetroPCS Launches World’s First Commercially Available Voice Over LTE Service and VoLTE-Capable 4G LTE Smartphone (via PR Newswire)

DALLAS, Aug. 7, 2012 /PRNewswire/ — MetroPCS Communications, Inc. (NYSE: PCS) today reached another innovation milestone by announcing the world’s first commercial launch of Voice over LTE (VoLTE) services, availability of the world’s first VoLTE-capable handsets and the first sale of a VoLTE-capable…

Read Full Article →

I admit, I love the chutzpah of Verizon at times. They are offering, for the FCC’s benefit, to sell their Lower 700MHz A/B spectrum in exchange for having their purchase of AWS (2100MHz TX) spectrum from the cable companies (SpectrumCo) approved. They own 24 A block and 54 B block licenses that they purchased at auction for around $4B.These are 6MHz TX and RX (FDD) pairs so with one you could deploy up to 5MHz and with 2 up to 10MHz LTE channels.

and  The flip side of this is they are selling their 12MHz presumably in the $4B range in exchange for 20MHz at $3.6B and simultaneously acknowledging that they have no intention to support their competitors struggles with getting devices for lower 700MHz. Don’t forget about the challenges such as Channel 51 interference for Channel A and some to Channel B spectrum holders that the FCC has not really helped resolve that’s why devices have been nearly nonexistent so far.

If I were ATT I would lobby the FCC to be able to purchase it at the auction prices paid by VZW. By doing so ATT could match it up with their C block holdings and potentially have more lower 700MHz spectrum for current Release 8/9 LTE than VZW, as they are owners of C block, 15MHz channel worthy 700MHz is nothing to sneeze at. 

ATT has also purchased the unpaired lower 700MHz spectrum from Qualcomm so there is a potential of around 20MHz for lower 700MHz for LTE Advanced (Release 10) if they can purchase the spectrum. Funny to me how ATT just gave away their AWS spectrum as a penalty for the failed TMobile USA bid. 

Another thing that strikes me as odd is the fact it will take in the neighborhood of 4X more cell sites for VZW to have equivalent coverage density between 2100MHz and 700MHz. They will be hard pressed to consider AWS outside of urban and hotspot in the suburban areas due to the discrepancy, on the other hand they already have Upper 700MHz C block so this could be a good fit for their LTE – Advanced plans in the long term and mid term a supplement for overloaded urban sites like airports. 

Super regionals like MetroPCS, USCellular and CSpire should be very interested in VZW’s spectrum too. They could get lucky if the FCC doesn’t take back the 700MHz spectrum and forces ATT to deal with VZW, which a deal would be doubtful. Then VZW will be sitting on all the spectrum they promised to sell with no real existing operators willing to pay what they paid…ok except for 1 guy, Philip Falcone at LightSquared/Harbinger Capital

…but other than that, the spectrum could get discounted and that would be good for the super regionals.

Stay thirsty my friends….

Full PR below:

Verizon Wireless to Conduct Spectrum License Sale

BASKING RIDGE, N.J., April 18, 2012 /PRNewswire/ — Verizon Wireless today announced plans to conduct an open sale process for all of its 700 MHz A and B spectrum licenses in order to rationalize its spectrum holdings.  The licenses cover dozens of major cities across the country, as well as a number of smaller and rural markets.

Verizon Wireless obtained the 700 MHz A and B licenses, as well as nationwide 700 MHz upper C licenses (with the exception of Alaska which has since been acquired), in FCC Auction 73 in 2008.  Verizon Wireless is deploying its 4G LTE network, which currently covers more than 200 million people, on its nationwide 700 MHz upper C spectrum.  If Verizon Wireless is successful in acquiring additional AWS (Advanced Wireless Services) spectrum licenses, it will use AWS spectrum in conjunction with its 700 MHz upper C band spectrum to deploy additional LTE capacity.

Accordingly, the sale of the A and B licenses is contingent on the close of Verizon Wireless’ pending purchases of AWS licenses from SpectrumCo (an entity jointly owned by Comcast, Time Warner Cable, and Bright House Networks), Cox and Leap Wireless. These transactions are at varying stages of review by the Federal Communications Commission (FCC) and the Department of Justice (DOJ) and are expected to close by mid-summer.

The company is announcing the sale plans now and will begin the process of soliciting interest from potential buyers to ensure the process can move forward quickly once the AWS license transfers have been completed.

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers,” said Molly Feldman, vice president of Business Development for Verizon Wireless.  “Moreover, provided our acquisition of AWS spectrum is approved, our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers.”

Stephens Inc., a nationally recognized, independent financial services firm based in Little Rock, Arkansas, has been engaged to manage the offering process.  Interested parties may contact Stephens Inc. at [email protected] or 501-377-8134. Stephens Inc. will later release information about efforts to reach out to potential bidders, including minority-owned and female-owned businesses, to participate in the process.  All sales will be subject to applicable regulatory approvals.

About Verizon Wireless

Verizon Wireless operates the nation’s largest 4G LTE network and largest, most reliable 3G network. The company serves nearly 108 million total wireless connections, including 92.2 million retail customers.  Headquartered in Basking Ridge, N.J., with nearly 82,000 employees nationwide, Verizon Wireless is a joint venture of Verizon Communications (NYSE, NASDAQ: VZ) and Vodafone (LSE, NASDAQ: VOD).  For more information, visit www.verizonwireless.com. To preview and request broadcast-quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at www.verizonwireless.com/multimedia.

 

 

 

 

SOURCE Verizon Wireless

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 Right under our noses, Samsung’s SCH-R930, a Galaxy device similar to the Samsung Indulge on MetroPCS’s network is launching as was parroted in the blogosphere. What I realized about this was the interesting thing is FCC testing shows that it’s an all band player, with AWS, PCS, Cellular and yes,

Lower 700MHz covered for 5MHz and 10MHz channels. US Cellular is slated to launch this device, as they Tweeted last week, in April.

BTW, the Huawei Honor they are launching does not support this band so to me this points to US Cellular launching LTE on AWS. On the other hand there are a lot of lower 700MHz spectrum owners who have a hole burning in their pocket right about now…Good luck and keep the lines orderly!

Notice Samsung is very understated on this device. Hmmm…

 

Links: FCC, Engadget

Read Full Article →

My spin on the proposed US $39B merger of ATT and TMO is that ATT primarily gets to sell iPhones to a 40M customers that didn’t have access to it directly, and can add the TMO PCS 1900MHz and AWS 2100MHz spectrum in ATTs existing portfolio of 700MHz/850MHz/1900MHz/2100MHz. The additional sites are only a minor part of the interest from ATT. The CEO De La Vega mentioned today that the AWS would be used for LTE, thus the current HSPA+ (HSPA Evolution) use of AWS would cease and users would need to ensure their device could be updated to see 3G at 1900MHz, and/or replaced to do that and use LTE at 2100MHz.

Remember, Verizon played the 700MHz spectrum auctions very well and avoided having to deal with the lower 700MHz interference initially, has consistent channels/bands everywhere and gets to start with 10MHz channels at a pretty good price. ATT was not so tuned into this opportunity and has more variable 700MHz spectrum. At the moment they are purchasing Qualcomm’s unpaired upper D/E block chunks but that wont be useful for a while.

 

 

This is also more good for Alcatel-Lucent and Ericsson for upgrades but less good in the long run for Nokia-Siemens.

 

More to come as is revealed…

Links: TMO & ATT via mobileizeeverything.com

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