LTE comes of age to feed data hungry mobile users

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Kevin Drinkall, Technical Presales Consultant at ZyXEL, examines some of the new business opportunities for operators created by the move to data-centric consumption.

With the surge in smartphone and tablet penetration and rapid rise of the Internet of Things (IoT), network operators are expecting data traffic to triple from 2015-2019.

We’re also seeing the rise in over the top (OTT) voice and messaging applications such as WhatsApp and Skype, which are seen as a threat to mobile operators’ traditional revenue streams, even if they do provide an opportunity to sell more data. Deloitte is predicting that a quarter of smartphone users will not make a single ‘traditional’ call over a cellular voice network in a given week highlights the reality of this threat.

Mobile data is now the most important source of revenue for mobile operators, meaning their networks must be able to support today’s customer needs. For the first time in 2015, 4G overtook 3G as the most common way to connect to the internet on a mobile in the UK. Usage in fact doubled between Q3 2014 and Q3 2015, underlining the increasing consumer demand for connectivity and the speed with which they’re upgrading.

Providing fast and reliable connectivity anywhere, anytime, and an improved user experience is a necessity for operators to remain competitive. Advances in Long Term Evolution (LTE) mean that it is not only viewed as the ideal technology to address growing user demands, but is even seen as a valid alternative or replacement for traditional fixed-line broadband. With the right use of technology, such as LTE routers, this means CSPs will increasingly be able to take business from traditional broadband providers.

LTE-Advanced technology, seen as the next generation of high speed mobile data, now unlocks new opportunities for service providers looking for improved revenue streams.  Rather than thinking of LTE as primarily for mobile, the arrival of LTE-A will see mobile data connections become more relevant to both homes and businesses, regardless of whether or not the devices being used are on the move.

LTE is evolving

New research from global analyst firm Ovum has revealed that LTE subscriptions passed the one billion mark during the final quarter of 2015, and will deliver double-digit growth for the next five years. While five countries account for nearly three-quarters of all LTE subscriptions, with China on top, this is predicted to expand to over ten countries by 2020.

Ovum also noted that LTE adoption has occurred twice as fast as W-CDMA adoption, with wireless data speeds being ‘critical’ for users, as operators aggressively roll out 4G networks to meet consumer demand for capacity. This uptake is being fuelled by an attractive and expanding LTE device ecosystem. Over 300 suppliers have now launched 3,000 LTE user devices, nearly half within the last twelve months.

LTE-A can deliver far greater data speeds than the 4G of today and could potentially reach real-world speeds of well over 160 Mbps, which is comparable to a 20MB home broadband connection. As validated by the industry numbers cited above, it’s not long before we’ll see mobile broadband become the main stream of connecting, with fixed broadband eventually becoming the backhaul of wireless. And with service providers struggling to provide fixed-line connectivity in rural areas, LTE is a good option as it’s inexpensive and easy to deploy.

With the faster speeds and increased flexibility that LTE-A provides, there are a number of opportunities for mobile operators.

What are the new opportunities?

As reported in the Ericsson Mobility Report (2015) the share of voice and messaging revenue reported by operators is declining, driven by growing data usage. Approximately 60 per cent of their revenues can be derived from voice and SMS services, and many operators offer combined voice and data plans, often with unlimited bundles. This has increased operator-provided voice and SMS usage in many markets, but packet-switched communication services based on VoLTE are reinvigorating the voice business.

Enabling operators to offer attractive bundled high-quality communication services and data packages to consumers and businesses helps them stay competitive and fight back against the rise in OTT services.

Services such as Voice over Wi-Fi (VoWi-Fi) and Voice over LTE (VoLTE) provide telecom-grade HD voice, video calling and other new, richer communication services, while enabling simultaneous high speed LTE data services. By the end of the year, about 100 carriers worldwide will be offering at least one packet-based voice service and approximately 300 million customers will be using VoWi-Fi and / or VoLTE by the end of 2016.

To differentiate their offers operators are increasingly forming partnerships with content providers, such as Netflix and Spotify. In 2016 we’ll see operators start to leverage the capabilities in their business support systems to better package and market their content offers, e.g. differentiating one Netflix offer vs. the Netflix offer of another operator.

LTE also enables operators to revolutionise video delivery over mobile networks, to enhance the user experience. Compared to unicast broadcasting, LTE Broadcast delivers the same stream of content to multiple users, removing network capacity constraints and delivering higher quality video and reduced latency. Recent deployments of LTE Broadcast have focused on live sporting events, meaning large audiences can view simultaneous real-time streams of HD content.

LTE Broadcast enables operators to unlock revenue generating opportunities by monetising their content. Examples of this include enhancing push video on demand (VOD) delivery, targeted advertising with ‘hyperlocal’ services and subscription based services.

With the emergence of the IoT and Big Data as major industry forces, it has been estimated that there will be up to 50 billion connected devices online by 2020. Mobile operators are rightfully placing their bets on LTE-A to handle the rapid growth of these interconnected machines and devices, and subsequent delivery of the huge volumes of data. This is down to the increased network capacity, efficiency, low latency and improved building penetration offered by LTE networks, meaning they’re ideal for the speed and responsiveness required by IoT applications.

Mobile operators are quickly developing their IoT solutions to take advantage of the trend, with AT&T already forming IoT agreements with more than 130 organisations spanning multiple industries, such as agriculture, automotive, aviation, energy, healthcare and transportation.

While many service providers offer mobile viewing of live events, network constraints mean that the ability to provide coverage within the venue itself is challenging, particularly for large sporting events. LTE Broadcast enables a single copy of a video stream to be viewed by thousands of users simultaneously, making in-venue video a reality and the ability to watch performers or sporting events up close. Trials conducted to date cover a wide array of events including music concerts, football, cricket, motor racing and golf.

As we see LTE technology come of age, the next generation of user experiences is becoming a reality. In order to seize the opportunities and new business models that LTE provides, mobile operators need to ensure they’re working with the right technology partner and consider all the necessary steps for robust delivery.  Doing so enables them to remain competitive by providing better user experiences and opening new avenues for revenue generation.

Kevin Drinkall, Technical Presales Consultant, ZyXEL

Kevin is a Technical Presales Consultant at ZyXEL and is an experienced network and solutions professional with over 10 years’ experience within the IT industry. Prior to joining ZyXEL, Kevin was the Technical Director at Quickline Communications, the UKs largest (coverage area) independent Wireless Internet Service Provider. Prior to his time at Quickline he was the Technical Director at Vixsoft Systems a solution integrator for logistics & Custom Clearance, where he spent 8 years working with ZyXEL equipment. Kevin started his career as a web developer and Linux System Administrator in 2001 and moved onto working as a Junior Network Architect within the Centralized Network Initiative in Canada.