China Paves the Way to LTE

Long Term Evolution (LTE) is the latest buzz in telecommunications markets worldwide. And China is not behind. In fact, China is driving the LTE wave with a lot of investments made in LTE R&D. There are aggressive efforts by leading carriers to launch LTE services earliest by 2011.

What is LTE?

LTE is considered the fourth generation of radio communications technology because it is faster than the existing 3G WCDMA/HSDPA/HSUPA technologies and also because it operates on an all-IP platform that handles all types of communications, including voice, in the form of data. LTE, in fact, refers to a set of enhancements to the Universal Mobile Telecommunications Service (UMTS), which will be introduced in the Third Generation Partnership Project (3GPP) Release 8.

LTE supports both Frequency Division Duplexing (FDD) and Time Division Duplexing (TDD). The technology promises downlink peak rates of at least 100 Mbps and uplink of at least 50 Mbps. The standard supports scalable carrier bandwidths from 20 MHz down to 1.4 MHz. LTE standards are designed to replace the GPRS Core Network, but at the same time, to ensure support for and mobility between the legacy or non-3GPP networks.

LTE is gaining momentum worldwide thanks to its high throughput, low latency, plug and play feature, and support for FDD/TDD on the same platform. Without doubt, LTE will enhance user experience and promise low operational expenses because all of these features can be offered on a simple architecture.

LTE and China

According to Pyramid Research, worldwide LTE subscriptions will increase from zero to 136 million between 2010-2014, after which China will have about 36.1 million LTE subscribers in 2014 - about one quarter of the world's total.

A recent report from market research firm In-Stat says China will lead the LTE deployment, especially the TD-LTE because it is backwards compatible with China's own homegrown 3G technology, Time Division Synchronous Code Division Multiple Access (TD-SCDMA). China Mobile will be the first to deploy LTE services. In 2010, China Mobile will use TD-LTE to construct a pre-commercial LTE network in China.

"LTE is the only route to wireless services in China," says In-Stat. LTE is the most sought-after technology because it offers a cost-effective solution to the growing demand for high-speed wireless data services and mobile video. LTE subscribers in China will number more than 500,000 by 2013, 80 percent of whom will be with China Mobile, predicts In-Stat.

"China Mobile will be the first operator to launch commercial LTE operation," said Anty Zheng, In-Stat analyst. "This will happen in limited areas in 2011. China Telecom and China Unicom will, we believe, follow China Mobile's lead."

China Unicom and China Telecom are far behind China Mobile. According to In-Stat, they are likely to begin LTE network construction in 2012.

Vendors in Action

It's the windfall season for equipment vendors. Equipment spending by Chinese mobile operators is estimated to reach $41billion over the next two years. Eyeing this opportunity, leading equipment vendors are trying their best to contain the next-generation technology demands from the operators. The market is already hot with leading players such as Huawei, Nokia Siemens Network, Ericsson, Motorola, ZTE and others creating the 4G trend in the region.

Huawei Technologies

Huawei, the leading Chinese telecommunications equipment vendor, has been researching LTE technology since 2004. Huawei is one among the many players involved in China Mobile's TD-LTE push in China. Recently, Huawei announced the launch of the world's first LTE eNodeB ready for large-scale commercial deployment. This LTE eNodeB, leveraging Quadrature Amplitude Modulation (64QAM) and Multiple Input Multiple Output (MIMO) is able to fully support a downlink rate of up to 150 Mbps in commercial LTE networks.

Earlier in June, Huawei successfully performed the interoperability tests for automatically switched optical network (ASON) solutions for China Telecom and France Telecom. The tests were conducted by the Optical Internetworking Forum (OIF) at its Worldwide Interoperability Demonstration 2009. This test proved Huawei's capability in offering an interoperable ASON solution to operators.

"The completion of the tests has proved the interoperability of our ASON equipments," said Christian Chua, president of Transport Network, Huawei, in a statement. "We will continue our investment in optical transport technology and work closely with operators worldwide to address their challenges and pressures with our customized solutions."

Prior to this ASON test, Huawei Technologies was selected by the Next Generation Mobile Network Congress to provide the new end-to-end TD-LTE/SAE solution for field tests at its conference in Beijing. Huawei was the sole network provider for the tests. It conducted a live demonstration of the world's first handoff tests between TD-LTE base stations with a 100-percent success rate. These field tests demonstrated the ability of Huawei's network to successfully deliver the handoff or handover technology that facilitates phone calls between different technologies. The completion of the tests marks a major step forward in the evolution of TD-LTE technology.

Nokia Siemens Networks

In March 2009, Nokia Siemens Networks announced its plans for the commercial rollout of TD-LTE in China with the expansion of its R&D team in Hangzhou, China. Hangzhou R&D center focuses on supporting China's home-grown TD-LTE technology through 2009. Nokia Siemens Networks believes that TD-LTE can catapult China to advanced next generation mobile broadband services. The company has offered a network solution for TD-SCDMA, apart from the huge R&D investments in both FDD and TDD segments.

Nokia Siemens Networks has already procured a decent share from the Chinese market. The company has made framework agreements valued at RMB 7.6 billion from China Mobile and China Unicom to purchase 2G and 3G mobile equipment and services. Under these agreements, Nokia Siemens Networks will roll out WCDMA networks for China Unicom in 11 provinces across China and will provide China Mobile with TD-SCDMA and GSM networks.

Motorola

Motorola is actively involved in the TD-LTE trials initiated by China's Ministry of Industry and Information Technology (MIIT) as part of its efforts to develop a globally competitive TD-LTE industry. Motorola's Wireless Broadband Access Solutions (WBAS) Hangzhou team and Wideband Base Transceiver Systems (WBTS) China team are working with Chinese operators, contributing to the promotion of the technology. Motorola Home & Networks Mobility division announced the completion of its joint Over-the-Air (OTA) trial with operators for TD-LTE commercialization in August. Consequently, Motorola became the first company to complete download throughput up to 70 Mbps in a 20 MHz bandwidth channel.

"Motorola is committed to broadband and 4G developments, and supports both TD-LTE and Frequency Division Duplex (FDD) LTE. We've made significant progress in TD-LTE commercialization as demonstrated by these trials," said Mohammad Akhtar, vice president and general manager, Home and Networks Mobility, Motorola China.

Motorola has also set up the Motorola China R&D Institute (MCRDI), to facilitate advancements in the latest communications technologies including LTE. The center is one of the largest multinational R&D organizations with a talented team of 3,000 from various fields including software, handset, infrastructure, value-added applications and various 2G and 3G technologies. 4G, including LTE and related migration solutions, has become one of MCRDI's key focuses with contributions from Motorola's Hangzhou R&D center and WBTS since 2006.

Agilent Technologies

Agilent Technologies, a leading measurement and analysis company, has assumed the role of a technology partner for innovative research in 3GPP-LTE. In July, the company announced a partnership with China's Southeast University for R&D on 3GPP-LTE systems performance. The company is providing test instruments and funding for researching ways to obtain higher data rates and high-quality services with increased spectrum and power efficiency.

"This collaboration enables Agilent to make a contribution to the future of wireless communication and gives the university access to our resources, empowering further success of scientists in academia," said Mike Kawasaki, education program manager at Agilent Technologies.

With this collaboration, the university is investigating credible measurement methods of RF circuits and sub-systems for 3GPP-LTE and analyzing impacts of RF impairments on 3GPP-LTE systems. "We have achieved some interesting results with this collaboration and some of them will be published in academic journals. We hope to promote research and employments of 3GPP-LTE in China and the rest of world," said Wei Hong, project team leader who is also director of the State Key Laboratory of Millimeter Waves at Southeast University.

Alcatel-Lucent

Alcatel-Lucent, one of China's top three suppliers for 3G, has stepped in to the LTE arena with a commitment to ensure smooth evolution to 4G. Earlier this year, Alcatel-Lucent completed a series of data calls involving terminals from third-party suppliers using TD-LTE. The test calls were completed by Alcatel-Lucent Shanghai Bell (ASB), Alcatel-Lucent's flagship company in China. The tests, the first such calls completed using Alcatel-Lucent's commercial eNode B base station and terminals from UTStarcom and Signalion, involved live video streaming and Web browsing services on TD-LTE.

Following this, Alcatel-Lucent inked two framework agreements valued at US$1.7 billion in total with China Mobile and China Telecom, to provide network upgrades, integration and maintenance services in April 2009. The agreements were secured through Alcatel-Lucent's Chinese company Shanghai Bell. Under the agreement valued at approximately US$1 billion with China Mobile, Alcatel-Lucent will provide its GSM/EDGE solutions, TD-SCDMA wireless networking equipment, optical, microwave and IP transmission offerings, IP service routers, application platforms and related services. As per the agreement with China Telecom, valued at approximately US$700 million, Alcatel-Lucent will supply its 3G CDMA/EV-DO networking equipment, application platforms, optical and IP transmission platforms, IP service routers and network maintenance services to support the rollout of the company's 3G wireless broadband network.

In another recent development, China Mobile selected a consortium of Alcatel-Lucent Shanghai Bell and Datang Mobile for deployment of its phase III TD-SCDMA mobile networks in 11 provinces. With this win, the consortium achieved overall market presence in 16 out of 31 provincial markets in China. In December 2008, Alcatel-Lucent Shanghai Bell and Datang Mobile provided their TD-SCDMA solutions for 11 of the 28 cities covered by China Mobile's phase II TD-SCDMA network.

ZTE Corporation

ZTE Corporation has made significant investments in China to facilitate migration from third generation to LTE. In October 2008, the company started by investing millions to build a new R&D facility and production base in Xi'an, China. The primary focus of this facility was on the developments of post 3G technology and the creation of new LTE solutions for its handset business.

In July, ZTE announced the launch of the industry's first LTE and EV-DO Rev.B Dual-Mode System at the opening of EXPO COMM Wireless Japan 2009. ZTE's SDR platform-based EV-DO Rev.B System can smoothly evolve to LTE by simply adding LTE baseband board and upgrading software, officials claimed. Through software advancement, ZTE's EV-DO Rev.A can evolve to EV-DO Rev.B network, which is backward compatible with EV-DO Rev.A users' access. EV-DO Rev.B, characterized by the flexible multi-carrier bundling technology, can bundle up to 15 carriers in Phase II, with a download rate of 73.5Mbps and an upload rate of 27Mbps. It also offers certain speed advantages over HSPA and others. Currently, ZTE is carrying out EV-DO Rev.B tests in China's CDMA market.

ZTE Corporation was recently named a Top 3 LTE Network Infrastructure Vendor by Gartner in its latest industry report, "Dataquest Insight: Scorecard for Vendors of Long Term Evolution Network Infrastructure." Gartner acknowledged that ZTE is a strong player in the LTE industry with a quality product portfolio and a growth strategy that is both prudent and sustainable.

The Road Ahead

LTE has now become a reality. An LTE commercial trial is expected at the earliest by 2011. The explosive demand for high-speed data connectivity, driven by trendy handsets like the iPhone and other mobile devices, is forcing operators to migrate to LTE. With initial tests showing that LTE has surpassed the technical requirements outlined by the 3GPP, LTE deployments should go smoothly.

However, there are a number of issues surrounding the implementation of this next-generation technology. Standardization of network components, including the hardware, may delay LTE deployments. Though a number of vendors say that they'll have LTE hardware ready next year, even the most optimistic projection has it that LTE deployment cannot happen before 2011. Device availability has also been an issue because new types of chips are required to support HSPA+.

Spectrum availability is another major concern for operators. There is not much regulatory clarity regarding the spectrum allocation at the moment. Since the service supports roaming, a global coordination of frequency bands is required, say officials at GSMA.

In spite of these hurdles, service providers in China are keen to migrate to LTE, with China Mobile taking the lead in the evolution to 4G technology. In July the company announced plans for a joint MultiService Forum's LTE and System Architecture Evolution (SAE) interoperability test with Vodafone. The test, scheduled for March 2010, will focus on Evolved Packet Core (EPC) for LTE radio access networks. Other test scenarios included in the trial are LTE roaming, backward compatibility with 2G and 3G into the EPC, handover/relocation, and access into the IP Multimedia Subsystem (IMS) core network. With this agreement, Vodafone and China Mobile became the first operators to sign up for MultiService Forum's LTE and SAE interoperability test.

China Mobile also started the bidding invitation for the joint research and development of TD-LTE data cards. The application for the bidding ended Aug. 4, 2009. This move is part of the preparation of China Mobile to commence LTE experiments at the World Expo to be held in Shanghai next year. By then, the company will set up a TD-LTE display network to exhibit its 4G evolution technology.

By the end of 2009, mainstream equipment suppliers will be allowed to provide TD-LTE commercialized equipment. In the second quarter of 2010, they will be able to provide terminals such as data cards. China Mobile is expected to start LTE pre-commercials in 2010, and promote a small-scale commercialized network in 2011.

After 3G, LTE will be the lucrative market for China.