Alcatel-Lucent

Increasing demand for data

With the increasing use of bandwidth-intensive applications such as web browsing, network capacity is becoming constrained. A recent Alcatel-Lucent study of North American wireless network traffic (data only, no voice or VoIP) showed that, during a busy hour on one day, Web browsing consumed 33% of data-related airtime but 69% of bandwidth, while email used 30% of data airtime but only 4% of bandwidth (see Figure). ^[1]

Relative load per application in wireless data networks

6 key trends to watch

While many drivers are fueling the increased growth of mobile data, following are 6 key trends that need to be watched.

1. Smart endpoints – The rapid adoption of smart devices – from the Apple iPhone, to the RIM BlackBerry, to the increasingly popular netbook – is having a highly disruptive effect on network traffic usage patterns (see Figure). These new endpoints are generating 4 to 10 times more data downloads on the network from both consumer and business users.
2. Cloud computing on the rise – The power of mobile end-user devices will be dramatically enhanced by network-hosted information and applications. Companies will host private “clouds” of servers with data and applications that will enable them to share mission-critical location-based information. Public “clouds” such as data storage services will allow consumers to store data, vacation photographs for example, from wherever they are, reducing the risk of data loss.
3. New SaaS-based services – As traffic shifts to public wireless infrastructures, mobile operators have an opportunity to offer new services. Accelerated life cycles of products and services have prompted greater interest in Software-as-a-Service (SaaS). In this model, businesses and consumers “rent” capabilities and capacity from the Web instead of owning and hosting applications. A small business, for example, could “rent” a few seats of a sales force automation software to improve the productivity of its mobile sales team at a reasonable cost.
4. Mashups – LTE creates new opportunities for more compelling user experiences. Mobile operators can take advantage of Web 2.0 innovation to create intelligent applications that can be accessed from any device anywhere. Service providers in an LTE environment will be in an even better position to use “application-layer” technologies to manage users’ workflow and personal priorities. These mashups will drive new traffic onto the network.
5. Users and applications default to multimedia – Consumers and business users increasingly treat their portable communications devices like desktop computers. In many cases the portable devices are replacing the desktop computers. This has immense impact on what they expect to see on the small screen, and how they want to navigate between functions. One important impact is that devices, and the networks that support them, need to support visually rich, bandwidth-intense multimedia interfaces.
6. Multiple, simultaneous sessions automatically initiated – Wireless sessions will be driven automatically by applications – not by callers. Mobile browsers will initiate multiple, simultaneous connections from the device, to the network, to download security updates, refresh local mini-databases, and enable mashup applications.

A rapid rise for LTE

It is projected that LTE will be adopted across the globe – in both emerging and developed economies — at unprecedented rates. According to Pyramid Research, the number of LTE subscriptions worldwide will grow at a CAGR of over 400% from 2010 to 2014, a pace that exceeds any previous mobile standard including 3G. ^[2]

While most of the early LTE subscribers will be signed up in developed markets – led by the United States and Japan, Pyramid predicts the new technology will experience explosive growth among emerging markets – led by China, as we approach the mid-point of the next decade.

Currently, LTE is being aggressively pursued in Europe, North America and Asia.

• 27 operators worldwide have publicly committed to deploying LTE
• 12 operators are expected to roll out commercial services in 2010
• The remainder are targeting deployments in the 2011 and 2012 time frames ^[3]

To put the impact of LTE into context, it is important to note that traditional voice and data service models in place today will continue to grow at a respectable rate of about 30% per year. But even the most conservative projections for LTE-related revenues are more than 10 times this rate.

A tailored end-to-end approach

So the race is on to optimize this new revenue stream. Operators across the globe are migrating to all-IP to support LTE, as well as other fixed broadband services such as fiber-to-the-home.

As part of the Alcatel-Lucent applications enablement vision, we are assisting operators in building high-leverage networks that will help them scale cost effectively to handle the potential explosion in video and other multimedia-based applications that LTE and fiber will make possible. There is no one-size-fits-all rollout plan that will work for everyone in every region. Alcatel-Lucent’s comprehensive approach addresses all key elements – including applications, network infrastructure, and end-user devices – with an end-to-end management philosophy.

In the final analysis, LTE must meet the high end-user expectations across the global consumer and business base. The wireless industry has reached a tipping point. While it looks like the strategy and enabling trends for a rapid rise of this exciting new standard are in place, success for operators will be determined by the ability to quickly exploit and capture the wireless broadband opportunity with LTE.

You are invited to leave a comment and share your view on the products, services and skill sets you’ll be looking for from a partner to deliver the promise of end-to-end LTE.

To contact the author or request additional information, please send email to enrich.editor@alcatel-lucent.com.

Footnotes

^[1] ©2009, Alcatel-Lucent 9900 Wireless Network Guardian Research

^[2] ©2009, Pyramid Research, Global Telecom Insider, LTE’s Five-Year Global Forecast: Poised to Grow Faster than 3G, Vol. 1, No. 1 May 2009

^[3] ©2009, Pyramid Research, Global Telecom Insider, LTE’s Five-Year Global Forecast: Poised to Grow Faster than 3G, Vol. 1, No. 1 May 2009