The Future of 4G Technologies: New Opportunities and Changing Business Models For The Emergence of LTE and WiMAX

Date: June 22, 2010
Pages: 185
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US$ 2,875.00
Publisher: Business Insights
Report type: Strategic Report
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ID: FEBF6E70F46EN
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The Future of 4G Technologies: New Opportunities and Changing Business Models For The Emergence of LTE and WiMAX
Technological innovation, including 3G, improved smartphones and multiplay mobile Internet devices (MIDs), has led to a boom in data usage with data traffic surpassing voice traffic for the first time in December 2009. Having nearly trebled in 2008 and 2009, global mobile data traffic is expected to double every year until at least 2013.

The wealth of content and mobile applications available to users worldwide puts a strain on mobile networks. Next generation technologies like pre-4G and 4G with their promise of greater speed and spectral efficiency become all the more appealing to the players involved in the ICT value chain. However, the reality is that 80% of mobile connections are still on 2G networks and 3G connections are only available in some areas, even in developed countries, with the exception of a few leading countries.

The 4G proposition sounds very promising but its success will ultimately depend on the availability of new spectrum and wide coverage. The many benefits of 4G may also be wasted unless ICT companies find business models that will not only drive adoption but will also help them to increase revenue.

Key features of this report
  • Overview of the market trends, technological and regulatory changes that are shaping the adoption of 4G.
  • Identification of the main features of IMT-Advanced and of the principle 4G technology candidates.
  • Comparison of the LTE and WiMAX technology families and their respective interest for ICT players.
  • Examination of current pre-4G deployments.
  • Analysis of the threats and opportunities posed by 4G.

Scope of this report
  • Review the current technologies, regulatory factors and industry support impacting the adoption of 4G technologies.
  • Identify key changes in consumer usage behavior that drive the need for the greater speed and spectral efficiency afforded by 4G.
  • Understand how legacy technologies will influence vendors’ choice of 4G protocol due to the economic and technical implications of deploying each technology.
  • Identify the technology family best suited to a chosen 4G strategy based on each technology’s characteristics and individual corporate circumstances.
  • Identify the various initiatives in support of each technology candidate in order to revise considered strategies if necessary.

Key Market Issues
  • Mobile penetration keeps growing worldwide. More consumers have access to mobile broadband and applications that require large amounts of bandwidth. This new trend creates connection issues and network congestion while posing network management and profitability issues for network operators.
  • Technological advances such as the wider availability of 3G and innovation made in smartphones and other Internet-enabled devices have encouraged consumers to use their mobile devices more in the way they typically use their computers, accessing an increasing amount of data. By widening their range of user equipment, handset and PC manufacturers such as Apple and Samsung have increased consumers’ expectations of a truly mobile computer environment. The experience of services such as mobile video, TV, and VoIP are becoming more comparable to those provided by a fixed PC environment.
  • The great majority of mobile users are still on 2G networks that do not support the rich communication services users are increasingly expecting from their networks. Even the experience of those users on 3G networks is restrained by the technology’s limitations. As data traffic increases in volume, network operators are confronted with the threat of traffic congestion and diminishing revenue. They need to find a way to not only meet their customers’ needs but also ensure their profitability, which impacts their relationship with other vendors in the ICT value chain.

Key findings from this report
  • Consumers are generating increasingly high volumes of mobile data traffic due to their adoption of more advanced devices. Smartphones and mobile Internet devices contribute to the growing popularity of bandwidth-intensive applications such as mobile video but also peer-to-peer and social networking. This puts pressure on networks and leads to congestion and poorer consumer experience.
  • 2G still accounts for the great majority of mobile connections worldwide but increasingly high pockets of data traffic in some markets, combined with changing user needs, are rendering current mobile technologies inadequate to meet demand satisfactorily. Although 3G is responding to rising consumer data usage, a more efficient technology is required to not only meet consumer needs but also enhance user experience while ensuring profitability for ICT companies.
  • Industry and consumers alike are keen to take mobile communications to the next level and there is strong interest in pre-4G technologies such as Mobile WiMAX and LTE that can increase data rates and capacity dramatically. Both technologies are marketed as 4G despite not meeting the IMT Advanced requirements. While Mobile WiMAX is already available in some markets, deployment of LTE is only just starting, pushing back the date when true 4G will be widely available commercially.

Key questions answered
  • What are the major trends and drivers behind the adoption of 4G?
  • What are the main 4G protocols and what is their appeal?
  • What technologies, products and services will influence the successful rollout of 4G?
  • Who are the major players in the 4G market and how do they position themselves?
  • What are the main threats posed by the deployment of 4G and how can companies protect themselves?
The Future of 4G Technologies
Executive summary
Competitive landscape
LTE and WiMAX
Technology deployments
Leading player strategies
The future of 4G technologies

CHAPTER 1 INTRODUCTION

Introduction
Who is this report for and what is it about?
Definitions
Evolved Packet Core (EPC) (ex. System Architecture Evolution – SAE)
E-reader
GSM
IMT-Advanced (4G)
LTE
LTE Advanced
Mobile broadband
Mobile Internet
Mobile Internet device (MID)
Mobile WiMAX
Notebook
Netbook
Peer-to-Peer (P2P)
Portable media player (PMP)
Portable navigation device (PND)
Radio access network (RAN)
Radio interface technology (RIT)
Smartphone
Set of radio interface technologies (SRIT)
Tablet PC
Ultra mobile PC (UMPC)
Wi-Fi
WiMAX
WiMAX 2 (WiMAX Release 2)

CHAPTER 2 COMPETITIVE LANDSCAPE

Summary
Introduction
Impact of legacy technologies
Impact of 2G technologies
2G Technologies Have Limited Data Capacity
2G Will Remain the Dominant Technology UntiL 2012
Impact of 3G and pre-4G technologies
3G Technologies Cannot Cope With Major Changes in Mobile Services Usage
Long Term Evolution (LTE) provides a temporary solution
Support for LTE translates into support for LTE Advanced
Mobile WiMAX offers an acceptable interim solution
Support for Mobile WiMAX translates into support for WiMAX 2
Legacy technologies will dictate the roadmap to 4G
Key trends and drivers
Mobile Internet fuels demand for faster service delivery
Mobile broadband substitution compounds network congestion
Increased mobile Internet usage also impacts devices and applications
Data traffic is skyrocketing
Current technologies are under mounting pressure
Industry support and regulatory factors will influence the adoption of 4G
Strong commitment from vendors to LTE will speed up 4G adoption
The LTE ecosystem is developing
The EU supports next generation networks and LTE
WiMAX also benefits from its own support group
The ITU IMT-Advanced standard and 4G technology candidates
3GPP and 3GPP2 standards
UMB
LTE Release 10 and beyond (LTE-Advanced)
IEEE standards
IEEE 802.16m (WiMAX 2 / WiMAX release 2)
The countdown to 4G has started but deployment may be delayed
The ICT landscape changes as competition intensifies

CHAPTER 3 LTE AND WIMAX

Summary
Introduction
Note on technology definitions
Industry and regulatory bodies rally around 4G
LTE Release 10 and beyond (LTE Advanced) supporters
3rd Generation Partnership Project (3GPP)
LTE/SAE Trial Initiative (LTSI)
Global mobile Suppliers Association (GSA)
The One Voice Initiative
GSM Association (GSMA)
Next Generation Mobile Networks Alliance (NGMN)
IEEE 802.16m supporters
WiMAX Forum
WiMAX 2 Collaboration Initiative (WCI)
The WiMAX Open Retail Initiative
M Taiwan
American Recovery and Reinvestment Act of 2009
Key features of LTE and WiMAX
Performance and capacity
Speed
Spectral efficiency and latency
VoIP capacity
Backward compatibility
Ubiquity and coverage
Ecosystem
WiMAX
LTE
Applications
WiMAX strives to reproduce a full computing environment
LTE Advanced will support the same applications as WiMAX 2
Economic factors
WIMAX
LTE
Summary: LTE and WiMAX share many similarities

CHAPTER 4 TECHNOLOGY DEPLOYMENTS

Summary
Introduction
Regulations and policies can impact 4G adoption
EU regulations drive 4G development but favor LTE
The EU welcomes next generation networks (NGN)
The EU backs LTE and LTE Advanced
Beyond Next-Generation Mobile Broadband (BuNGee)
Spectrum issues could jeopardize 4G
Spectrum allocations will impact operators and manufacturers
WiMAX
LTE
Allocation of the digital dividend would benefit 4G
The spectrum (re)allocation process is under way
Europe:
Middle East: Bahrain frees up spectrum for LTE
Africa is allocating the 790-862 MHz band to mobile broadband
Central & Latin America (CALA): Mexico may open up the
700MHz band
Asia-Pacific
4G Deployments in the World
WiMAX has a head start on LTE but lower coverage
Mobile WiMAX
WiMAX 2
Current WiMAX deployments
Asia-Pacific
Western Europe
Eastern Europe and Russia
Middle East
Africa
USA
Central & Latin America
LTE and LTE Advanced deployments
The first phase of LTE deployment will occur in 2010-2011
What is in the pipeline?
WiMAX Forum is gearing up efforts to finalize WiMAX 2
WiMAX 2 should be commercially available on a larger scale in 2011-2012
The deployment of LTE Advanced will be delayed by LTE

CHAPTER 5 LEADING PLAYER STRATEGIES

Summary
Introduction
Samsung Electronics
Samsung wants to be an innovator and leader
Samsung’s 4G strategy is user- and device-focused
Samsung targets the smartphone segment
The Smart life content plan will help boost smartphone sales
Samsung ventures into software territory
Samsung launches its own app store
Samsung embarks on an open mobile OS strategy
The success of Samsung’s 4G strategy relies partly on the success of its Bada OS
4G Technologies: Samsung Wants the Best of Both Worlds
Samsung is a step ahead with its LTE product offering
Samsung’s WiMAX involvement and strategy
Samsung is a leader and innovator in mobile WiMAX
Samsung leads the way to WiMAX 2 (802.16m)
Samsung’s WiMAX range of devices is also versatile
Samsung targets Asia and the Middle East for its WiMAX development
LG Electronics
LG changes strategic direction and forms new partnerships
LG steps up efforts to become a reference in the smartphone segment
LG is seeking technology independence to secure its position as LTE market driver
LG’s 4G strategy focuses on LTE
LG is gearing up towards producing an LTE capable handset
Innovation and leadership will consolidate LG’s place in the 4G market
LG wants to capitalize on its LTE track record
Motorola
Smartphones will drive growth in the handset market
Applications will help Motorola meet its smartphone strategic targets
Motorola is involved in both LTE and WiMAX while remaining a key player
in previous technology generations
Motorola raises its 4G profile
Motorola is a leader in WiMAX
Motorola aims for a larger share of the LTE market
Motorola’s LTE contracts increase
Motorola intensifies its LTE efforts and extends its product range
Motorola targets emerging markets to drive growth
Motorola expands its 4G wireless strategy into the consumer electronics market
Motorola will start embedding proprietary technology in third-party
CE devices
Motorola still believes strongly in WiMAX
Motorola supports WiMAX 2
Motorola deploys its WiMAX technology in Asia
Motorola is extending its WiMAX portfolio
Apple
Apple delays its entry into the 4G market
The iPhone 4’s features offer better support for rich media communications
Apple’s edge in the MID segment is confirmed
Apple offers multifunction devices with one predominant use
Changes to the iPhone’s operating system makes the iPhone more 4G compliant
Apple’s dominance of the apps market in all form factors continues
Apple wants a share of the mobile advertising market
Vendor summary – Samsung, LG, Motorola, Apple
Zain Group
The departure of Zain’s CEO derails Zain’s development plans
Zain’s expansion is put on hold and its African assets are sold off
Zain brings next generation mobile technology to emerging markets
Zain will be launching LTE in the Middle East first
Zain chooses LTE to assert its position as a global player
Zain is also investing in WiMAX technology
Clearwire
Clearwire opts for aggressive and fast deployment across the US
Clearwire looks set to switch allegiance from WiMAX to LTE
Clearwire may enter an agreement with T-Mobile to create an MVNO
Clearwire opens up the ecosystem with its “best-of-breed” strategy
Clearwire’s gamble has paid off so far
ZTE
ZTE aims for continued rapid growth
ZTE goes from late entrant to innovator
ZTE’s High Performance Product Development program increases its competitiveness
ZTE is ready for 4G
ZTE has a double 4G offering
ZTE targets the US for 4G deployment
ZTE claims to have found the killer service: interoperability testing
ZTE is keen to increase investments in LTE
ZTE makes a bid for technology independence
ZTE pursues an aggressive internationalization strategy
ZTE will raise awareness of its brand in the terminal segment
Vendor summary – Clearwire, ZTE, Zain

CHAPTER 6 THE FUTURE OF 4G TECHNOLOGIES

Summary
Introduction
LTE and WiMAX both have their place in the 4G family
Leading players and organizations will influence the choice of 4G technology
The choice of technology depends on the business model
All roadmaps lead to 4G
The GSM and CDMA roadmap
The WiMAX roadmap
LTE and WiMAX are not mutually exclusive
The deployment of 4G will change the ICT market
Impact on networks
Impact on the ecosystem
Devices will become multimode
Ultra mobile device adoption will increase
CE devices will turn into mobile Internet devices
Impact on content
Increased data usage could raise copyright issues
Impact on applications and services
4G Will Accelerate Three-Screen Convergence
Adaptability and personalization will be the key words
4G Will Enhance the Gaming Experience
Location-based services (LBS) will drive network traffic up
In Africa, mobile entertainment will drive growth
Mobile VoIP will take off once 4G is fully deployed
Impact on user experience
Mobile cloud computing will become more of a reality
The new ICT competitive environment
Technology convergence is still ongoing
Impact on business models
Prepaid model
Usage-based model
Application-specific
Time-based
Time of day model
Location-based model
Funded by mobile advertising or mobile commerce
Who stands to gain and who stands to lose from 4G technologies?
Consumers
Network operators
Network equipment vendors
Device manufacturers/consumer electronics manufacturers
Software vendors
Index

LIST OF FIGURES

Figure 2.1: Global mobile subscribers by technology generation (bn), 2009-14
Figure 2.2: Global Internet* subscribers (m), 2008-2012
Figure 2.3: Global mobile data traffic (Terabytes/month), 2009-14
Figure 2.4: Mobile data traffic by region (Terabytes/month), 2009-14
Figure 2.5: Mobile data traffic by device type (Terabytes/month), 2009-14
Figure 2.6: Mobile data traffic by application (Terabytes/month), 2009-14
Figure 2.7: 4G drivers
Figure 2.8: Progression towards IMT-Advanced
Figure 2.9: IMT-Advanced candidate technology submissions
Figure 2.10: Steps in 4G radio interface development process
Figure 2.11: Critical milestones in the 4G radio interface development process
Figure 3.12: LTE vs. WiMAX
Figure 4.13: Top 5 4G markets (% share of global 4G subscriptions), 2014
Figure 4.14: Global WiMAX technology adoption by subscriber coverage (%), 2009
Figure 4.15: Regional mobile WiMAX subscriptions (m), 2009-15
Figure 4.16: EMEA mobile WiMAX subscriptions (m), 2009-15
Figure 4.17: Global LTE subscriptions (m), 2012-2015
Figure 5.18: Vendor summary - Samsung, LG, Motorola, Apple
Figure 5.19: Vendor summary - Clearwire, ZTE, Zain
Figure 6.20: LTE and WiMAX - competitive positioning
Figure 6.21: The impact of 4G
Figure 6.22: Global user device shipments (m) 2009-13
Figure 6.23: Penetration of devices classified as MIDs (% of total devices), 2012
Figure 6.24: New pricing business models
Figure 6.25: Positives and negatives for stakeholders in 4G technologies

LIST OF TABLES

Table 2.1: Global mobile subscribers by technology generation (bn), 2009-14
Table 2.2: Global Internet* subscribers (m), 2008-2012
Table 2.3: Global mobile data traffic (Terabytes/month), 2009-14
Table 2.4: Mobile data traffic by region (Terabytes/month), 2009-14
Table 2.5: Mobile data traffic by device type (Terabytes/month), 2009-14
Table 2.6: Mobile data traffic by application (Terabytes/month), 2009-14
Table 2.7: LTE ecosystem, 2010
Table 2.8: Key features of 3G and 4G
Table 2.9: Key features of LTE Advanced
Table 3.10: WiMAX coverage by region, 2009
Table 4.11: Top 5 4G markets (% share of global 4G subscriptions), 2014
Table 4.12: Global WiMAX technology adoption by subscriber coverage (%), 2009
Table 4.13: 38 LTE networks commitments, 7 April 2010
Table 4.14: 25 LTE networks commitments, 7 April 2010 - Launch date to be confirmed
Table 4.15: LTE trials (pre-commitment stage)
Table 4.16: Global LTE subscriptions (m), 2012-2015
Table 6.17: Global user device shipments 2009-13
Table 6.18: Penetration of devices classified as MIDs (% of total devices), 2012
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