Why is there a need for 4G?

This blog entry is the second in a row about my thoughts on the current development of 4G wireless standards. You might want to take a look at the introduction before reading on.

The primary question when looking at future 4G systems is why there is or will be a need for them. Looking back only a couple of years, voice telephony was the first application that was mobilized. The short message service (SMS) was the first data application that was mobilized as a mass market application. By todays standards comparably simple mobile phones were required. Also, bandwidth requirements were very small. In a way, the SMS service was a forerunner for other data services like mobile eMail, mobile web browsing, mobile blogging, push to talk, mobile instant messaging and many others. These were enabled by the introduction of packet based wireless networks that could carry IP data on the one hand and more and more powerful mobile terminals that could cope with the requirements of these applications on the other. Today, current 3G and 3.5G networks are able to cope quite well with these applications as they offer a sufficient bandwidth per user. Also, network capacity is still not an issue as only few people use these services today. Having said that, there are a number of trends which are already visible today which will increase bandwidth requirements in the future:

  • Rising use: As prices get more attractive, more and more people will use wireless networks for data applications. Consequently, bandwidth demand will rise.
  • Multimedia content: While first attempts at mobilizing the web resulted in mostly text based web pages only, embedded images are now the norm rather than the exception. A picture says more than a thousand words but it also increases capacity requirements. Video and music downloads are also starting to become popular which again increase bandwidth requirements.
  • Mobile Social Networks: Similar to the fixed line Internet, a different breed of applications is changing the way people are using the net. Before, users were mainly consuming content. Blogs as well as podcasts, picture- and video sharing sharing sites are reshaping the internet as users suddenly do not only simply consume content anymore but also create their own content which they want to share with others. Applications like Shozu and Lifeblog, for example, allow to create content on the mobile phone and upload them to the web in an easy fashion. Especially picture-, podcast- and video up- and downloading is multiplying the amount of data users send and receive.
  • Voice over IP: The fixed line world is rapidly moving towards Voice over IP these days. I expect that in 5 years from now traditional fixed line circuit switched voice networks will be on a massive retreat and a fair percentage of users will use VoIP, e.g. over DSL or cable, as their primary fixed line voice service. The circuit switched market is already pretty much dead as operators are no longer investing in this technology. The same is happening in wireless, although there is one major issue: VoIP requires much more air interface bandwidth than the super slim voice codecs which are currently used for circuit switched voice calls over wireless networks. The air interface has been optimized on all layers of the protocol stack for circuit switched voice. The same is not possible for VoIP as the IP stack is a general data transmission stack and thus it can not be optimized for voice. The only solution is to increase the available bandwidth.
  • Fixed line Internet replacement: Voice revenue in both the fixed line and the wireless market are on the decline. In many countries, operators are trying to compensate by offering Internet access for PCs, notebooks, etc. over their UMTS/HSDPA or CDMA networks. Thus, they have started to compete directly with DSL and cable operators. Again, this requires an order of magnitude of additional bandwidth on the air interface.
  • Competition from alternative wireless Internet providers: In some countries, alternative operators are already offering wireless broadband Internet access with WiFi or (pre-)WiMAX 802.16d networks. Here’s an example of a small operator which offers wireless broadband access for a rural region in Austria. As such they directly compete with traditional UMTS and CDMA carriers who are also active in this market.

When combining these trends, it becomes quite clear why operators and standards bodies are pushing for ever faster wireless data networks.

In my next blog entry on this topic, I’ll take a look which technologies are competing for dominance in the 4G space. The most likely candidates to me are UMTS LTE, CDMA Rev-C and WiMAX.

The Race For 4G Wireless

While most wireless operators are still struggling to understand how to properly monetize their third generation wireless networks, the race for fourth generation network technologies has already begun. This is not a contradiction as current 3G networks will be operated and enhanced for many years to come. Furthermore, specification, development, rollout and mass production of 4G devices all take their time. Thus, most 4G systems are at least five years or more away from the mass market. So why will there be a need for 4G networks and which standards are competing on a global scale? Also, which of those are the most promising candidates for different kinds of operators? I’ve been thinking about these questions for a while now and will put my thoughts into a number of blog entries which I will add over the course of the next couple of weeks:

Steve’s doing the Carnival Of the Mobilists this week

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Steve Litchfield, also known for his great S60 reviews over at All About Symbian and of course from his web site 3lib.ukonline.co.uk is hosting the Carnival of the Mobilists this week. For those of you who don’t already know, the CoM is THE ressource which covers the best blog entries on mobile of the past week. I feel especially honored this week as Steve’s chosen my submission for the Carnival as best entry of the week. Thanks very much!

The Power Socket at Each Train Seat

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According to the ‘DB
Mobile’ magazine 9/2006, the Deutsche Bahn (German railways) is about to retrofit their
high speed trains with power sockets at each seat. Great news for people like
me and others who prefer the train and who previously had to struggle for seats
near power sockets to get some work done while on the go. All high speed trains
are also already equipped with GSM repeaters so coverage inside the train for the
mobile Internet is usually excellent. So Deutsche Bahn, when you do the
retrofit, don’t forget to add UMTS repeaters.

My Take on the Ultimate Landline Replacement Offer

In some countries like Germany, where mobile ownership has now gone beyond the 100% mark, mobile operators are looking for ways to continue their growth. Thus, mobile operators are now starting to develop offers to animate people to ditch their landlines in favor of a ‘mobile only’ lifestyle.

Telephony replacement only: Replacing a landline for people who do not have a computer and Internet access at home is pretty simple. Have a reasonable offer for both originating and terminating calls and people can’t wait to drop their monthly fixed line charge. O2 began to do this already many years ago in Germany with a product they called ‘Genion’. With that offer, mobile subscribers get both a mobile and a fixed line phone number. While being in their "homezone", cheaper tariffs apply for outbound calls. For incoming calls, people can use either the fixed line or the mobile number. The advantage of using the fixed line number is the fact that the caller only pays for a fixed line call which is much cheaper then calling a mobile phone. The model has been quite a success and since landline replacement has become the strategy of the day, T-Mobile and Vodafone have started to develop and market similar offers.

Telephony and Internet Replacement: Replacing both fixed line telephony and Internet at home is somewhat more difficult. But again, competition in the market brings some innovative ideas to get to those customers as well. Again, O2 was the first to start offering a surf box for the home. The surf box is basically a wireless lan access point with a built in UMTS phone or PCMCIA card. While prices for wireless Internet access where pretty high at the beginning they’ve come down quite a bit recently as Vodafone and T-Mobile have also started to make similar offers. Vodafone for example offers a surf box and 5 GB of data traffic for around 40 Euros a month. The catch: The use of the surf box with the included traffic is limited to a home zone. If location bound wireless Internet access solutions will persist in the market is not sure. Since T-Mobile has started their "web’n’walk" program, similar offers are now available without being restricted to a single physical location. With HSDPA now available in some networks, expect to see new versions of these surf boxes to match speeds of current DSL lines. While prices are not yet competitive enough to trigger a landslide victory for fixed Internet access replacement, wireless access has one big advantage: Ease of installation. In the majority of cases, DSL installation is a nightmare and takes weeks in the best case and many calls to service centers and sleepless nights in the worst case. When getting wireless Internet access, however, you can take your notebook to the sales point, get a surf box and contract, try it out in the shop and then take it home. That’s it! In my opinion, operators have so far not capitalized this tremendous advantage.

The ultimate replacement offer: Apart of the easy installation process, wireless networks have another big advantage over fixed line networks: Video telephony. Agreed, it’s still not much used today but things are changing quickly as I discovered in a previous blog entry. This is the one service fixed line networks can’t offer. Once UMTS terminal ownership reaches a point where your friends suddenly also have video phones, a competitive bundle of voice telephony, video telephony and wireless Internet access could make more people ditch their landlines. We are not quite there yet, but I expect that in another 12 to 24 months the critical element, UMTS phones in the hands of more than 25% of the population, should be in place in many countries.

1000 New Mobile Phone Users per Minute

Some incredible facts: The GSM Association has stated in a press release that 1000 new GSM subscribers are added around the globe every minute. They further say that it took GSM 12 years to reach 1 billion subscribers but only two and a half years to reach the second billion. Almost 30% of the earth’s population is now in possession of a mobile phone.

These days the phenomenal growth is mostly coming from countries like China, India and Africa. I guess the second billion is especially challenging to serve as monthly revenues in these countries per subscriber is probably very low. But wireless networks have come a long way since GSM was launched in 1992 and both networks and mobile phones today only cost a fraction of the prices 10 years ago.

While voice undoubtedly is still the main application for wireless networks in both rich and poor countries, the mobile Internet is catching up. Take a recent BBC article for example in which they state that a third of all WAP pages served to users outside the U.K. are requested from Nigeria. They state that their  WAP page access has now accumulated to over 58 million pages per month. A staggering number, just as the 1000 new users a minute.

Carnival of the Mobilists 42 at MobileActive.org

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Another week, another Carnival of the Mobilists. This week, the Carnival is hosted over at MobileActive.org. As always, the Carnival contains a great roundup of the latest ideas and thoughs of the people behind the major wireless blogs on the web. I very much agree to this’s weeks pick of Scott Shaffers blog entry on Google, China Mobile and 2D barcodes as post of the week. So don’t wait and head over to the Carnival.

S60 Phone Software Update Utility – List of Bug Fixes

By now you’ve probably seen on some other blogs that Nokia now offers a Phone Software Update program to let people update their S60 phones such as the 6630, 6680, N70 and others themselves. So I wondered what bugs an update of my N70 would fix. I came up with the following links which list the fixes done by each software version for a variety of phones:

The lists of bug fixes are quite extensive. Quite interesting, I never encountered 95% of them with my usage pattern. Unfortunately, the web sites do not mention where they’ve got the information from. I wished Nokia would officially post such lists.

What will the US do with the money of the spectrum auction?

Just read a report about the ongoing spectrum auction in the US. T-Mobile is already willing to pay over 3 billion dollars to get a nation wide spectrum allotme nt. Observers expect the total revenue generated by the auction from all companies involved to be over 15 billion dollars. It kind of reminds me of what happend
in Germany a couple of years ago when the total sum for 3G licenses was about 50 billion euros or about 70 billion dollars.

So what will happen to the money? Will the US be as short sighted as Germany and just use the money to reduce the national debt or will they reinvest at least a
part of the money into the wireless industry? Just imagine what 10% of this sum would do when invested into wireless projects and new services…

Anyone aware what will happen to the money?

Mobile Web Sponsoring

Wapreview recently ran an interesting article on Yelp Mobile, a service featuring user reviews of everything from restaurants to services and businesses. What I find particularly interesting is that they are sponsored by Palm. To me sponsoring web sites, particularly in the wireless domain, seems to be a win-win situation for the site, the sponsor and the mobile web in general.

On the one hand it’s obviously a win for the sponsored site. On the other hand it’s also a win for the sponsor in several ways. Big web companies like Yahoo and Google and also hardware manufacturers like Palm, Nokia and others live from their image. In my opinion this is one of the reasons why they offer so many services for free.

Sure, they do advertising on those sites in many cases. Nevertheless, I think many services might not be sustainable simply from the advertisement money they generate directly. I rather suspect that the main revenue stream of those companies is the advertising included in some of their other products which are loosely coupled to their services like search or sold ads on other web sites (e.g. Adwords). Free services get additional attention for profitable services which in turn generate more money which in turn again generates revenue to sponsor free services. A nice ecosystem.

Yahoo’s mobile activities around the recent Football world cup is another good example. They surely invested a lot of money into the mobile site for the event. At the same time they also advertised their involvement and thus generated attention for themselves and the mobile web. So a lot of people did not only become aware of Yahoo but also of the mobile web.

Many companies want to expand into the mobile space. So their sponsoring and advertising does not only help their brand but also helps to expand a market which is still in its infancy.