Recently, a question was asked in the LTE forum on LinkedIn how LTE can reduce the cost per bit compared to todays broadband wireless systems such as HSPA. I found it quite interesting that a lot of people immediately jumped at the greater spectral efficiency as the means to reduce the overall cost. But I think there are also other innovations which will drive down cost:
- There are no Radio Network Controllers (RNC) anymore, i.e. fewer network components
- The backhaul network is radically different. While E-1/T-1 connections (cable, microwave) are still heavily used today, LTE will be rolled out with Ethernet over fiber / VDSL and microwave. Huge cost advantage here. It's not spectral efficiency operators worry about today, it's the rising E1/T1 backhaul costs.
- In all fairness, it has to be said, that current HSPA networks are changing towards this as well in terms of backhaul and network element (e.g. one tunnel architecture) but it is not built in and the RNC is still required.
- Another reason why LTE has a cost advantage over today's deployed networks is that technology has advanced and allows smaller base stations to be built which require less power, less space. These will be deployed from day 1 and in many cases will be put inside existing base station cabinets or mounted besides.
- Also count in remote radio head technology that will probably be used heavily with LTE to drive the cost down.
- In the mid- to long term, I think LTE access will be the catalyst to have multi radio base stations with a common Ethernet based backhaul thus also driving down the cost of 2G and 3G systems to some extend that will remain in place for the time to come.
Anything else you can think of?