UMTS – Giga thoughts …

Published in Voice & Data Oct 22, Walking the 3G tightrope in India

Introduction

India is now poised for the next technological leap with the planned rollout of 3G services by early next year. The auction of the 3G spectrum by the government recently concluded in May, 2010 after 34 days and 183 rounds of intense bidding by nine private operators for 22 circles. The auctions ended after hectic bidding wars with no single operator winning the high speed 3G spectrum in all 22 circles. The three biggest carriers of India namely Bharti Airtel, Reliance Communication and Vodafone managed to bag 13 circles each.

While the 3G spectrum auction was a bonanza for the Indian Government which netted Rs. 66000 crores, the Indian carriers had to pay a steep price for the 3G spectrum artificially inflated by the intense bidding over the 34 days this year. The question that will be foremost in the minds of all the Indian operators is how to recover the cost of the expensive 3G spectrum in the shortest possible time as they plan the rollout of the 3G services. In other words the operators in India will have to walk the 3G tightrope over the next couple of years.

Navigating in the 3G domain

This article looks at some techniques that can be adopted by the Service Providers to quickly recoup the 3G spectrum costs. The 3G rollout will involve network upgrades to access, core and backhaul networks in order to meet the demands of the newer 3G services. The distinguishing and alluring feature of 3G, governed by the IMT-2000, is the great increase in data speeds. 3G networks allow download speeds of 2Mbps for a stationary user and up to 384 Kbps for a mobile user enabling Service Providers to come up with a slew of exciting new services. Such high network speeds allow for innovative services spanning voice, data and video.

A look at some of the techniques that can be adopted by Operators to generate a healthy revenue from 3G

Incentivizing for traffic growth:

a) Smartphones

A recent report by Ericsson indicated that mobile data traffic globally grew 280% during each of the last two years with the forecast of doubling annually over the next five years. This explosion in mobile data traffic in countries like US, Europe and Japan is largely due to the entry of smartphones like the IPhone, Nexus One or Droid with their numerous data hungry applications. A compelling strategy for the carriers is to have a voice and data plan in the network, for which a smartphone like the ones above, are provided at a throw away price. This will be a major incentive for the subscribers to download high speed, data hungry applications. The operators should avoid the flat-rate pricing offered in some networks in the US and instead have price tiered service based on usage.

b) 3G dongles

Another strategy on the same lines is to subsidize 3G dongles for enterprises. As before, the CSPs should concentrate on the revenue arising out of usage of the dongles as opposed to making any margins on the dongles themselves. Now with the entry of the iPad and other competing tablet computers there is bound to be significant growth in data traffic.

c) App Stores:

What makes 3G service so attractive is the high speed coupled with the inherent mobility. The CSPs have to take advantage of this fact and provide compelling high data applications which subscribers can download and use through App Stores. The App Stores should include innovative applications spanning location based services, video download services and mobile commerce.

3G network design considerations

a) UMTS RF design

The Service Providers will have to devise their RF design strategy based on whether the 3G deployment is Greenfield or Brownfield in which the 3G network will be co-located with existing 2G radio access systems. The UMTS RF design and planning should take into consideration the increased capacity requirements and traffic growth projections for the 3G network. The RF design considerations should be based on sound market research and its goals should be to maximize coverage, to provide sufficient capacity, optimized link budgets, acceptable QoS while minimizing Opex and Capex. The Service Providers will have to take appropriate steps if spectrum re-farming from 2G to 3G is considered. In this situation the Operator must ensure that the transition is transparent as possible. Also the Operators should introduce dual –mode handsets that will allow the subscribers to seamlessly switch between 2G and 3G networks and vice-versa where 3G services are co-located with legacy 2G networks.

b) Core Network design considerations

In parallel with the design of the UMTS RF access, planning and design should also be taken for the Core network. The projected increase in subscriber on a monthly basis, the expected increase in voice traffic and the potentiality of explosive growth in data traffic should be given due consideration. All these factors should be taken into consideration while dimensioning the Core 3G network. The traffic handling capacities of Network Elements like the MSCs, HLRs, SCPs, SMSCs, SGSNs and the transmission systems like High Speed Links (HSLs) /Low Speed Links (LSL) should be dimensioned based on voice and data traffic projections. Based on experience of existing 3G networks in the world it would make better sense to slightly over-dimension the network than to face potential outages because of shortage of network resources. The Operators have to accurately anticipate traffic growth, increase reliability of the network and plan for the eventual migration to an all-IP network.

c) Mobile Data Offload

The tremendous growth of mobile data traffic in countries that have already deployed 3G like US, Japan resulted in carriers there having to offload some of the data traffic to Wi-Fi networks and femtocells in order to reduce the burden on the network. Indian Service providers should plan their network with data offload as a possible eventuality.

Prudent Technology choices

As the Network Providers plan their growth of their network to support 3G technology they should also look at some of newer technologies that can help in reduction of the Service Provider’s Capex and Opex. Two technologies with great potential are cloud computing and analytics. By judiciously migrating some of their applications on a public cloud Carriers can reduce their capital expenditure.

Lastly CSPs can look at how data mining and analytics of their existing software systems can be used for identifying areas which will improve customer retention and reduce customer churn. Analytics provide a wealth of information on customer behavior which can then be strategized to increase revenue

Conclusion

These are truly exciting times for the India Telecom. Coupled with the promise of the advanced technologies like the 3G are also associated challenges and opportunities that are unique to those technologies. CSPs that plan ahead and execute on their strategies are bound to emerge as true winners in the years to come.

Tinniam V. Ganesh

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Published in Voice & Data Apr 14, 2010
CodeProject
Abstract: : In this era of technological inventions, with the plethora of technologies, platforms, paradigms, how should the India telecom network evolve? The evolutionary path for the telecom network clearly should be one that ensures both customer retention and growth while at the same time be also capable of handling the increasing demands on the network .The article below looks at some of the technologies that make the most sense in the current technological scenario The wireless tele-density in India has now reached 48% and is showing no signs of slowing down. The number of wireless users will only go up as the penetration moves farther into the rural hinterland. In these times Communication Service Providers (CSPs) are faced with a multitude of different competing technologies, frameworks and paradigms. On the telecom network side there is the 2G, 2.5G, 3G & 4G. To add to the confusion there is a lot of buzz around Cloud technology, Virtualization, SaaS, femtocells etc., to name a few. With the juggernaut of technological development proceeding at a relentless pace Senior Management in Telcos, Service Providers the world over are faced with a bewildering choice of technology to choose from while trying to maintain the spending at sustainable levels. For a developing economy like India the path forward for Telcos and CSP is to gradually evolve from the current 2.5G service to the faster 3G services without trying to rush to 4G. The focus of CSPs and Operators should be in customer retention and maintaining customer loyalty. The drive should be in increasing the customer base by providing superior customer experience rather than jumping onto the 4G bandwagon. 4G technology, for example LTE and WiMAX, make perfect sense in countries like US or Japan where smart phones are within the reach of a larger set of the populace. This is primarily due to popularity and affordability of these smart phones in countries like the US. In India smartphones, when they come, will be the sole preserve of high flying executives and the urban elite. The larger population in India would tend to use regular mobile phones for VAS services like mobile payment, e-ticketing rather than downloading video or watching live TV. In US, it is rumored, that iPhones with their data hungry applications almost brought a major network to its knees. Hence, in countries like US, it makes perfect sense for Network Providers to upgrade their network infrastructure to handle the increasing demand for data hungry applications. The upgradation to LTE or WiMAX would be a logical in countries like US. In our nation, with the growth in the number of subscribers, the thrust of Service Providers should be to promote customer loyalty by offering differentiated Value Added Service (VAS) service. The CSPs should try to increase the network coverage so that the frustration of lost or dropped calls is minimal and focus on providing superior customer experience. The Service Providers should try to attract new users by offering an enhanced customer experience through special Value Added Services (VAS). This becomes all the more important with the impending move to Mobile Number Portability (MNP). Once MNP is in the network many subscribers will switch to Service Providers who offer better services and have more reliable network coverage. Another technique by which Service Providers can attract and retain customers is through the creation of App Stores. In US, app stores for iPhone have spawned an entire industry. Mobile Apps from app stores besides providing entertainment and differentiation can also be a very good money spinner. While the economy continues to flounder the world over the Service Providers should try to reduce their Capacity Expenditure (Capex) and their Operating Expenditure (Opex) through the adoption of Software-as – Service (SaaS) for their OSS/BSS systems. Cloud technology, besides reducing the Total Cost of Ownership (TCO) for Network Providers can be quite economical in the long run. It is quite possible that prior to migrating to the Cloud all aspects of security should be thoroughly investigated by the Network Providers and critical decisions as to which areas of their OSS/BSS they would like to migrate to the Cloud. While a move to leapfrog to 4G from 2G may not be required, it is imperative that with the entry of smartphones like iPhone 3GS, Nexus One and Droid into India the CSPs should be in a position to handle increasing bandwidth requirements. Some techniques to handle the issue of data hungry smartphones are to offload data traffic to Wi-Fi networks or femtocells. Besides, professionals these days use dongles with their laptops to check email, browse and download documents. All these put a strain on the network and offloading data traffic to femtocells & Wi-Fi have been the chosen as the solution by leading Network Providers in the US. Conclusion So the road to gradual evolution of the network for the Network Operators, Service Providers are 1. Evolve to 3G Services from 2G/2.5G. 2. Create app stores to promote customer retention & loyalty and offer differentiated VAS services 3. Improve network coverage uniformly and enhance the customer experience through specialized App stores 4. Judiciously migrate some of the OSS/BSS functionality to the cloud or use SaaS after investigating the applications of the enterprise that can move to the cloud 5. Offload data traffic to Wi-Fi networks or femtocells.