Will 3G Networks Cope?

Table of Contents

Report summary

Chapter 1: Will 3G networks cope with future traffic volumes?

• 1.1: 3G networks have been underutilised
• 1.2: 3G traffic volumes have increased substantially since 2007
• 1.3: Several factors will continue to drive 3G traffic volumes
• 1.4: Migration of 2/2.5G users to 3G services will drive 3G traffic
• 1.5: Increased penetration of USB modems and datacards will drive 3G traffic
• 1.6: Increased penetration of smartphones will drive 3G traffic
• 1.7: Affordable pricing will drive 3G traffic
• 1.8: Changing service mixes will drive 3G traffic
• 1.9: Cellular network improvements will drive 3G traffic
• 1.10: Increasing availability of easy-to-use applications will drive 3G traffic
• 1.11: Greater indoor usage of 3G devices will drive 3G traffic
• 1.12: There are big risks as 3G traffic volumes continue to increase

Chapter 2: 3G enhancements will boost capacity and performance

• 2.1: There are a number of significant 3G enhancements
• 2.2: HSDPA has already been widely deployed
• 2.3: HSUPA brings significant improvements in uplink speeds
• 2.4: There is increasing momentum behind HSPA+
• 2.5: LTE deployment will start in 2010
• 2.6: LTE-Advanced will eventually extend the performance of LTE even further
• 2.7: Average throughput - not peak data rate - determines network capacity
• 2.8: Network capacity could be improved in three ways
• 2.9: 3G operators differ in their customer numbers and spectrum allocations
• 2.10: We have derived realistic 3G network capacities
• 2.11: 3G performance will continue to lag fixed broadband networks
• 2.12: 3G operators will need to swiftly upgrade backhaul capabilities

Chapter 3: Complementary service deliverymethods could relieve 3G

• 3.1: There are a number of complementary delivery methods to 3G
• 3.2: Mobile TV broadcasting solutions could carry multimedia content
• 3.3: Indoor systems could carry a significant proportion of indoor traffic
• 3.4: Sideloading could provide guaranteed quality of service in any location

Chapter 4: Traffic growthmust be quantified to enable network evolution decisions

• 4.1: We have developed a comprehensive service and traffic model
• 4.2: We have modelled significant increases in 3G device penetration
• 4.3: We have modelled changes in the mix of 3G devices
• 4.4: We have modelled complex changes in the 3G service mix
• 4.5: We have modelled big differences in the traffic intensity of services
• 4.6: We have modelled the impact of complementary delivery methods
• 4.7: We have derived forecasts for service traffic levels

Chapter 5: We have forecast 3G traffic volumes for twomarket scenarios

• 5.1: We have forecast service usage and traffic volumes for two market scenarios
• 5.2: In the wireless-only scenario, wireless services will compete with fixed
• 5.3: In the integrated scenario, fixed broadband connections will be utilised
• 5.4: Overall mobile penetration will reach a higher level in the wireless-only scenario
• 5.5: Voice usage will continue to increase in both scenarios
• 5.6: In the wireless-only scenario, 3G USB modems and datacards will substitute for fixed broadband
• 5.7: In the integrated scenario, 3G USB modems and datacards will be complementary to fixed broadband
• 5.8: Average monthly data usage per 3G USB modem/datacard will reach 10.5GB by 2014 in the wireless-only scenario
• 5.9: While USB modems/datacards will represent only 16%of 3G devices, they will contribute 73.5% of all 3G data usage in 2014
• 5.10: Video streaming and downloads will contribute the largest proportions of total data usage
• 5.11: Data services will account for about 99%of total service usage by 2014
• 5.12: Under 10%of service usage will be carried by broadcasting networks by 2014 in both scenarios
• 5.13: About 14% of service usage will be delivered using indoor systems by 2014 in the integrated scenario
• 5.14: More than one-fifth of service usage will be delivered using sideloading by 2014 in the integrated scenario
• 5.15: 3G cellular networks will carry 77% of total 3G device traffic by 2014

Chapter 6: Incumbent 3G operators face major challenges in the wireless-only scenario

• 6.1: We have modelled incumbent and new-entrant 3G operators
• 6.2: 3G capacity per device will decline substantially for incumbent 3G operators
• 6.3: Some incumbent 3G operators will face HSPA capacity problems in 2010
• 6.4: There are short-term strategies for incumbent 3G operators to delay HSPA capacity problems
• 6.5: New-entrant 3G operators will have a significant short-term competitive advantage in the wireless-only scenario
• 6.6: Incumbent 3G operators will face a number of critical issues in the wireless-only scenario
• 6.7: LTE will be an essential upgrade for all types of 3G operator, with additional spectrum required
• 6.8: HSPA+ will co-exist with LTE for many years

Chapter 7: 3G operatorsmust take action to cope with 3G traffic increases

• 7.1: 3G operators must evaluate their own circumstances
• 7.2: 3G new entrants can seize short-term opportunities for fixed - mobile substitution
• 7.3: Incumbent 3G operators must try to avoid an early HSPA capacity shortfall
• 7.4: Incumbent 3G operators should carefully review their marketing and technology strategies
• 7.5: All 3G operators should plan to deploy LTE and evolve quickly to Ethernet backhaul solutions

Glossary

FIGURES AND TABLES

• Figure 1: Factors that will further drive 3G traffic volumes
• Figure 2: Structure of service and traffic model for wireless devices
• Figure 3: Forecast average traffic per 3G device, split by delivery method, in the wirelessonly scenario, 2008 - 2014
• Figure 4: Forecast average traffic per 3G device, split by delivery method, in the integrated scenario, 2008 - 2014
• Figure 5: 3G network capacity per device for an incumbent 3G operator, 2008 - 2014
• Figure 6: 3G network capacity per device for a new-entrant 3G operator, 2008 - 2014
• Figure 7: HSPA network capacity per device and forecast traffic per device for an incumbent 3G operator, for the wireless-only scenario, 2008 - 2014
• Figure 8: HSPA network capacity per device and forecast traffic per device for an incumbent 3G operator for the wireless-only scenario with accelerated 3G migration, 2008 - 2014
• Figure 9: Factors that will further drive 3G traffic volumes
• Figure 10: 3G penetration for selected 3G operators, March 2005 - March 2009 Figure 11: Mobile broadband penetration as a proportion of the population, for selected
• European countries, January 2009 [Source: European Commission, 2009]
• Figure 12: Fixed broadband penetration as a proportion of the population, for selected
• European countries, January 2009 [Source: European Commission, 2009]
• Figure 13: Forecast for global smartphone unit shipments, 2006 - 2014
• Figure 14: Calculation of realistic monthly network capacity and network capacity per device
• Figure 15: Calculated HSPA network capacities for incumbent and new-entrant 3G operators
• Figure 16: Distribution methods for delivery of services and content to 3G devices
• Figure 17: Structure of service and traffic model for 3G devices
• Figure 18: Wireless devices modelled to derive traffic forecasts
• Figure 19: Structure of service and traffic model for wireless devices
• Figure 20: Penetration of devices (as a proportion of the population) in the wireless-only scenario, 2008 - 2014
• Figure 21: Penetration of wireless devices (as a proportion of the population) in the integrated scenario, 2008 - 2014
• Figure 22: Average voice usage for each device type in the wireless-only scenario, 2008 - 2014
• Figure 23: Average voice usage for each device type in the integrated scenario, 2008 - 2014
• Figure 24: Average data usage per 3G device in the wireless-only scenario, 2008 - 2014
• Figure 25: Average data usage per 3G device in the integrated scenario, 2008 - 2014
• Figure 26: Contribution of different devices to the overall data usage per 3G device in the wireless-only scenario, 2008 - 2014
• Figure 27: Contribution of different devices to the overall data usage per 3G device in the integrated scenario, 2008 - 2014
• Figure 28: Average data usage per 3G device, split by service, in the wireless-only scenario, 2008 - 2014
• Figure 29: Average data usage per 3G device, split by data service, in the integrated scenario, 2008 - 2014
• Figure 30: Average service usage per 3G device, split by service, in the wireless-only scenario, 2008 - 2014
• Figure 31: Average service usage per 3G device, split by service, in the integrated scenario, 2008 - 2014
• Figure 32: Proportion of service usage delivered by broadcasting networks in the wirelessonly scenario, 2008 - 2014
• Figure 33: Proportion of service usage delivered by broadcasting networks in the integrated scenario, 2008 - 2014
• Figure 34: Proportion of service usage delivered by indoor systems in the wireless-only scenario, 2008 - 2014
• Figure 35: Proportion of service usage delivered by indoor systems in the integrated scenario, 2008 - 2014
• Figure 36: Proportion of service usage delivered by sideloading in the wireless-only scenario, 2008 - 2014
• Figure 37: Proportion of service usage delivered by sideloading in the integrated scenario, 2008 - 2014
• Figure 38: Forecast average traffic per 3G device, split by delivery method, in the wirelessonly scenario, 2008 - 2014
• Figure 39: Forecast average traffic per 3G device, split by delivery method, in the integrated scenario, 2008 - 2014
• Figure 40: 3G network capacity per device for an incumbent 3G operator, 2008 - 2014
• Figure 41: 3G network capacity per device for a new-entrant 3G operator, 2008 - 2014
• Figure 42: HSPA network capacity per device and forecast 3G traffic per device for an incumbent 3G operator, for the wireless-only scenario, 2008 - 2014
• Figure 43: HSPA network capacity per device and 3G traffic per device for an incumbent 3G operator, with accelerated 3G migration, for the wireless-only scenario, 2008 - 2014
• Figure 44: HSPA network capacity per device and 3G traffic per device for an incumbent 3G operator, with slow 2G to 3G migration, for the wireless-only scenario, 2008 - 2014
• Figure 45: HSPA network capacity per device and forecast 3G traffic per device for an incumbent 3G operator for the integrated scenario, 2008 - 2014
• Figure 46: HSPA network capacity per device and 3G traffic per device for an incumbent 3G operator, with slow 2G to 3G migration, for the integrated scenario, 2008 - 2014
• Figure 47: HSPA network capacity per device and forecast 3G traffic per device for a newentrant 3G operator in the wireless-only scenario, 2008 - 2014
• Figure 48: HSPA network capacity per device and forecast 3G traffic per device for a newentrant 3G operator in the integrated scenario, 2008 - 2014
• Figure 49: Network capacity per device for different 3G enhancements, and forecast 3G traffic per device for an incumbent 3G operator for the wireless-only scenario, 2008 - 2014
• Figure 50: Network capacity per device for different 3G enhancements, and 3G traffic per device for an incumbent 3G operator for the integrated scenario, 2008 - 2014
• Figure 51: LTE network capacity per device and forecast 3G traffic per device for an incumbent 3G operator in the wireless-only scenario
• Figure 52: LTE network capacity per device and forecast 3G traffic per device for a newentrant 3G operator in the wireless-only scenario
• Figure 53: LTE network capacity per device and forecast 3G traffic per device for an incumbent 3G operator in the integrated scenario

• Table 1: Estimated dates when 3G traffic volumes will exceed HSPA capacity for our two scenarios and for different 3G operator circumstances
• Table 2: Monthly cellular data usage in Hong Kong, December 2002 - December 2008
• Table 3: Mobile broadband service pricing for selected 3G operators, June 2009
• Table 4: Data consumption for a range of mobile services
• Table 5: Characteristics ofW-CDMA, HSDPA, HSUPA, HSPA+ and LTE
• Table 6: Characteristics ofW-CDMA, HSDPA, HSUPA, HSPA+, LTE and LTE-Advanced
• Table 7: Realistic spectrum efficiencies and average throughputs forW-CDMA, HSPA, HSPA+, LTE and LTE-Advanced
• Table 8: Key differences in circumstances between UK operators that significantly affect network capacity per device
• Table 9: Total network capacity and network capacity per device that could be supported for a number of operator circumstances
• Table 10: Calculated peak data rates possible per base station for a three-sectored base station
• Table 11: Evaluation of alternatives to 3G macrocells for delivering services and content to 3G devices
• Table 12: Suitability of complementary methods to deliver different types of mobile TV and video content
• Table 13: Description of services modelled to derive traffic forecasts
• Table 14: Traffic intensity of services modelled
• Table 15: Key service delivery methods and their contribution to the delivery of services in each scenario
• Table 16: Data service mix in the wireless-only scenario, 2014
• Table 17: Data service mix in the integrated scenario, 2014
• Table 18: Estimated dates for when the forecast 3G traffic will exceed HSPA capacity for our two scenarios and for different 3G operator circumstances