New study investigates tomorrow’s LTE mobile broadband ecosystem
Date: Mon, 06/15/2009 - 11:47 Source: UMTS Forum press department
A major new report from the UMTS Forum presents a positive picture of LTE’s transformation of the global market for mobile broadband.
The report – titled “LTE Mobile Broadband Ecosystem: the Global Opportunity” and produced by global consulting firm Ovum with inputs from UMTS Forum project team members – offers detailed analysis and insight into key issues shaping tomorrow’s mobile broadband ecosystem.
Available free of charge to UMTS Forum members, the report explores key success factors, enablers, challenges and risk factors that will determine the global market success of 3G LTE (Long Term Evolution).
The study is based on over 30 interviews by Ovum with operators, vendors, regulators and standards bodies, plus end user research with 550 respondents in the US, Korea, Japan, Germany, France, Italy, the UK and Spain. It considers both consumer and enterprise market segments, as well as vertical markets that will benefit from the deployment of LTE.
Gauging levels of readiness in the industry as a whole, the report also provides a series of recommendations to operators, vendors and regulators that will help promote successful LTE deployments. A significant first step in understanding the critical enablers for LTE, the report is intended to serve as the foundation for further studies by the UMTS Forum.
Offering major enhancements in speed, capacity and support for new services, LTE will dominate the global market for mobile broadband over the next few years. Designed for all-IP traffic, LTE supports a flatter, more efficient network architecture that allows operators to reduce their long term capex and opex. In parallel with this, LTE allows operators to deliver a more compelling, service-rich mobile broadband user experience for consumers and business customers alike.
LTE will enhance many existing services while enabling new ones. In this new environment, non-voice mobile services – including real-time video, P2P content sharing and social networking – will be increasingly important. This evolution from a ‘traditional’ mobile ecosystem to embrace new internet-based applications, devices and content delivery mechanisms will see the emergence of a broader ecosystem than for any previous mobile technology.
LTE will be characterised by a complex ecosystem that includes not only operators, infrastructure providers, terminal vendors, standard bodies and regulators, but also chipset manufacturers, application developers, content platform providers and consumer electronics vendors. Supported by a healthy ecosystem, LTE will also see the emergence of dynamic new business models not hitherto seen in the mobile space.
Cross-industry momentum gathers pace
The report confirms widespread commitment and co-ordination across the industry, with most leading mobile
network operators planning to deploy LTE.
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.
In the longer term, LTE – together with major business transformation by operators – will provide an environment that allows capital and operational cost reductions in an increasingly competitive market. All major systems vendors have LTE product roadmaps, and these companies are engaged in technology trials in line with their market and company strategies. LTE standards are already being implemented by chipset vendors, and early pre-standard chipsets and devices are being used in interoperability and performance trials. The report confirms that these initiatives are benefiting from strong cross industry support.
Key findings: New services & devices drive traffic growth
A new generation of icon-based mobile devices has already stimulated demand for mobile broadband, which is increasingly being used as a fixed broadband substitute. Similarly, the availability of high quality content – including audio and video – will drive a significant increase in data traffic.
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. According to Ovum’s survey of currently active 3G users undertaken for this report (28% of whom use mobile broadband as their exclusive means of consumer broadband access), LTE will stimulate the greatest growth in demand for video and media services (35%-40%).
However 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%. This growth is expected within one to two years of users moving to LTE, as existing broadband contracts expire. It’s also to be expected that the base of mobile broadband users will increase as more consumers switch from 2G to LTE in line with standard adoption cycles.
Location-based (GPS-linked) and in-car services are also seen as major application areas that end users will find attractive. Broadband users are demanding increasingly higher bandwidths to access media-rich content. The primary demand for bandwidth is not just from music and video downloads. Newspapers, blogs and social networking sites are increasingly media-rich: all these benefit from being accessed through higher speed and lower latency connections.
Devices will become more complex, some with application-specific form factors which vendors will have to understand and develop. New devices will need greater processing capability to deal with video processing and applications. They will also need larger screens supporting a clean, intuitive, multi-touch interface. Other requisites include multi-standard and multi-frequency band operation to support roaming and increase coverage area; multiple antennas; and improved battery life.
Key findings: End user expectations and needs
The report’s authors expect to see the trend of fixed to mobile voice migration replicated with broadband access bringing considerable national economic benefits. There is not expected to be a single killer application for LTE. The capabilities of mobile broadband will serve a wide constituency of needs. Indeed, the actual 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. Main conclusions drawn from Ovum’s end user survey include:
• Accessibility is key. Survey respondents 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.
• 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 widely understood or appreciated: it will therefore take time to fully develop this aspect of the market.