A new lease of life

Once upon a time, when most of the industry still knew GSM as Groupe Spécial Mobile and Nordic Mobile Telephony was the big success story, another digital cellular operation was finding its feet. The CDG (CDMA Development Group) was formed to push the adoption of a technology that would become CDMA2000 in what many perceived as bitter rivalry against the 3GPP’s UMTS standard.

Fast forward two decades and with so many CDMA flag bearers migrating to LTE, the CDG has changed its focus to stay relevant. NMT finally disappeared from the landscape earlier this year and it’s actually these low frequency bands, such as 450MHz, once popular in many parts of Northern and Eastern Europe for analogue telecoms services, where the organisation is now heavily pushing its technology for spectrum– and capacity-poor mobile carriers.

It is well documented that one of the biggest problems facing an operator today is spectrum availability. So when the world’s last NMT network was switched off, in Poland, in June of this year, local licensee Orange found itself with a swathe of unused spectrum and a golden opportunity to offer something its rivals couldn’t.

The operator swapped out NMT equipment for CDMA450 and, exploiting the frequency’s natural efficiencies, was able to get a 12x increase in coverage versus 1800MHz or 2100MHz. Poland is a country with a population of around 40 million and around 40 per cent of those live in rural areas. As the only operator with a 450MHz licence, Orange has the monopoly, and while EDGE covers 99 per cent of the territory, WCDMA deployments are only focused on major urban areas. Less cells meant that the carrier was able to deliver ‘wireless broadband’ to 90 per cent of the Polish geography, with CDMA450 users now delivering an ARPU of around $18 per month. It is the relatively low ARPU of the rural regions as well as the challenging territory for network buildouts that make the 450MHz spectrum so well suited to this application. As Piotr Stepniewicz, manager of strategic projects for Orange Poland puts it, there is simply no incentive for any of the local carriers to invest in LTE or even 3G outside of dense urban areas, even if they were to collaborate.

“10MHz of LTE spectrum delivers the same experience to a user as 5MHz of CDMA spectrum, so it doesn’t make sense to invest,” he says. As a result, Orange is serving the rural Polish market alone. Orange Poland shares certain similarities with Triatel’s operation in Latvia. The 100 per cent privately-owned carrier achieved 98 per cent geographic coverage of the 64,000 square kilometre territory, playing home to two million people, with just 160 CDMA450 basestations.

According to Viktors Topors, technical director at the Latvian operator, the average CDMA450 base station on the Triatel network offers a coverage radius of 46km, extending up to 100km off the coast. By his calculations it would be “impossible” for HSPA+ to provide the same level of coverage even with “a few thousand” basestations.

Cranking the theoretical 3GPP deployment up to LTE would improve the coverage map by an order of magnitude but still not put it in the same ball park. Again Topors estimates that an LTE900 deployment would require more than 600 basestations to provide a similar level of coverage—a rollout plan that would no doubt struggle to find investment.

One of the key factors pointed out by Joseph Lawrence, VP of marketing at the CDG, is that an LTE carrier needs a site deployment that is guaranteed to cater to around 500 people per basestation, in order to justify the buildout. “This is why there are no cellular installations in places like upstate New York or Vermont. It just doesn’t make economic sense to cover these areas as there are not enough people there. And if a carrier won’t put HSPA+ or CDMA2000 in these places then why would they put LTE there?” he said.

Triatel can get away with between 50 to 100 customers per base station, depending on location, but Topors acknowledges that some rural regions are slim pickings. “There are some areas where there is only one police station or a single post office in the coverage area of a basestation, especially in the Russian border areas,” he says. To this end, Triatel is actually considering shrinking its coverage area when the mandate on its 450MHz spectrum licence requirements expires in June of next year. The company could relocate some of the basestations it has in areas where deployment doesn’t make economic sense, and then perhaps coverage in some of the borderlands would be provided by Russian operators.

“It’s commercially viable that we could shrink coverage by five to seven per cent or about six base stations,” Topors said, “without making any difference to our subscriber numbers or revenues.” The economics make CDMA450 a niche, but attractive play for those that have the opportunity.

“African operators I have spoken to, say they have to do business on ARPU of less than $5 per month, and 450 means operators can still be profitable on that kind of ARPU,” says Lawrence. “Economically, 450MHz is maybe three times more effective at coverage than 900MHz and around twelve times more efficient that 1800MHz or 2100MHz cells. But it also helps breach the digital divide.

“450MHz spectrum is the best solution for the connected world. In fact it doesn’t even matter what technology is used really, just that if you can make use of the 450MHz band you will be able to economically connect schools, businesses, communities and emergency services. And when you can do that with one basestation instead of 12 then the economics are dramatic. All the same services on 3G and 4G are enabled on the 450MHz band,” he said. Statistics from the CDG show that there are 116 450MHz networks in operation today across 61 countries, with new deployments still popping up. All of these installations use CDMA, and 12 new CDMA450 networks were launched in 2011, with two more upcoming deployments in Georgia and Serbia.

A quick look down the list of countries supporting 450MHz cellular deployments underlines the historical association with NMT in Northern and Eastern Europe, with the rest being soaked up by Central Asia, the Middle East, Africa and Latin America—emerging markets almost every one.

In other parts of the world the 450MHz band is used for trunking systems such as emergency services radio installations, military deployments, or even sits unused. Brazil, for example, took almost ten years to clear the 450MHz spectrum for use as it was being used by the federal police, so it’s not always easy to make the spectrum available for reuse. In the US it is used for trunking services and in the UK for wireless microphones and broadcast equipment. But in much of Western Europe, the 450MHz band is an untapped resource that has not even been auctioned yet.

The point, according to the CDG, is that lots of regulators don’t realise they are sitting on this potential gold mine, which could potentially even be used for LTE deployments. The remit of the CDG (which has renamed itself as the acronym and dropped all reference to CDMA) now, is to educate the industry on the importance of 450MHz networks for people and machines (M2M), given the understanding that LTE will not deliver broadband coverage for whole regions, leaving 3G and other technologies to pick up the slack as demand for wireless service grows.

To further explore Joseph Lawrence’s point about technology agnosticism in the 450MHz band, we spoke to Igor Virker, director of business development at the CDG, who revealed that the group is working with LTE stakeholders to specify LTE for 450MHz using non-contiguous spectrum. Virker warned this will likely be an arduous process, as standards bodies like the ITU and 3GPP need to be involved, but nonetheless, there is strong interest from operators in Brazil, as well as the local regulator, Anatel, and Sky Link, the Russian CDMA450 player.

“We could be there in about five years with input from Brazil,” he says, “but the challenge for new licensees is always coverage obligations, so maybe the operators don’t want to wait for LTE450 to mature.”

The vendors face a similar dilemma. While CDMA450 makes up a good chunk of Alcatel- Lucent’s portfolio at present, Brahm Parasher, network strategy manager at the vendor says that vendors are understandably reluctant to develop a solution without a standard in place, as they don’t want customers to be left with a proprietary offering.

In the meantime, CDMA is really the only solution for the 450MHz band, and with only 34 EV-DO Rev. A commercial networks and four EV-DO Rev. B commercial networks in play, there is plenty of headroom in the technology roadmap.

“Because it’s at the bottom of frequency pile, 450MHz offers the greatest range and covers the most distance. It means less cell sites and less backhaul and it also has good building penetration, making it a great choice for talking to smart meters in homes,” says Joseph Lawrence.

“It was licensing conditions that forced CDMA 450 into being the defacto standard globally for fixed wireless because of tough competition from GSM. The country of Georgia, which has three CDMA450 operators, has 50 per cent of its broadband subscribers on fixed wireless, and achieved that in just a few years. Then with Orange in Poland, once you leave the metro areas you are into CDMA coverage because as soon as you go out of urban areas the economic model becomes weaker,” says Lawrence. “You will never see a single technology used all over the world comprehensively.”

As both Orange Poland and Triatel Latvia attest, fixed wireless offers a great opportunity mainly due to a sheer lack of competition. Orange’s Stepniewicz says that many suburban new builds in the country have no fixed line access, so the operator offers a variety of consumer end point devices from nomadic routers to multi-mode dongles supporting WCDMA, GSM and CDMA in one unit.

In Latvia, there is a government sponsored project to close the Digital Divide by taking fibre out to 169 points of presence in the country and then letting local entrepreneurs extend those connections out to villages and other remote areas. Of course Triatel is there already with a wireless offering that delivers pretty good in building coverage, something that drives down the attractiveness of the state’s ‘middle mile’ project.

The other thing about rural and developing regions is that user expectations tend to be quite low. The majority of ex-NMT customers were either fishermen or farmers using the devices for work purposes, and the newer CDMA450 deployments are catering to much the same demographics from Poland to Indonsia. Operators like Orange say their user base is happy with the experience, with Alexsander Jakubczak, wireless access division director, Orange Poland, claiming that users can’t see any difference with most apps, “except maybe with video streaming.”

In Poland, Orange only guarantees downlink speeds of 1Mbps, but while testing in a rural, woodland area, MCI got an average throughput of 3.6Mbps and streamed high definition video with little buffering. Orange’s CDMA450 network has so far been upgraded to Revision B Phase One only, which was a software upgrade to the network. A second phase hardware upgrade is planned over the next year, where the network cards are swapped out in the base stations, pumping the network downlink peaks up to 14.7Mbps.

Jakubczak said that Revision B Phase 2 would increase throughput and improve network QoS, with the carrier offering packages supporting 45Mbps peaks for HSPA+ in urban areas and 1-2Mbps for EV-DO Rev. A in rural areas. With Rev. B Phase 2 this will jump to about 9.6Mbps in the rural regions. “But considering the alternatives, our users don’t have very high expectations,” he says. “So there is still scope for much of the countryside.”

All Orange Poland’s SIMs are multi standard by default, allowing access to all networks, regardless of device or terminal. Users have to switch network manually, but the only real issue is finding a supply of attractive devices that actually support both CDMA450 and HSPA+.

In Latvia, Triatel is competing against market incumbent LMT which has a licence for 2100MHz as well as DSL operators offering up to 10Mbps links. But Topors believes his company is competitive with average downlink speeds of 5-7Mbps with Rev. B Phase 2 and peaks of 14.7Mbps, while upload speeds average at 2-3Mbps and peak at 5.4Mbps. The company is also targeting a mid-price point compared with fixed line, selling its fixed wireless service for Lat19 or around €25 per month. From next year the company will also start an education programme to push capped offers based on usage bundles as Topors believes most people don’t need unlimited data.

The defining factor among these markets is that there are clearly some areas that don’t have fixed broadband because it’s not economical to deploy—some don’t even have narrowband, because the demand simply isn’t there. But what the CDG argues is that regulators don’t realise the potential of the spectrum they are sitting on. It comes down to an education issue, Joseph Lawrence believes. And while the potential of that spectrum is somewhat limited by technology at present, this may not always be the case.

“CDMA is the only technology working in the 450MHz band today but we are working with stakeholders to develop specs for LTE. Spectrum aggregation can allow you to expand bandwith with non contiguous spectrum,” he says. And bear in mind that CDMA 2000 operators are actually responsible for much of LTE’s initial growth, especially those based in the US.