The Network Paradox Part 2: Meeting the Mobile Data Demand

In the first installment of this series we looked at some of the incredible growth projections for mobile data traffic worldwide and in North America. Faster networks and more robust applications like video are expected to drive up data demands on mobile networks anywhere from a factor of 30 to 40 globally as more regions and more subscribers adopt mobile broadband services. While developing countries like India will see staggering growth as 3G services come online, the US certainly won’t be spared. Cisco Systems (NASDAQ:CSCO) estimates mobile data traffic will increase 49 times in four years in the US.

Given such enormous demand, how will mobile operators support that traffic? What will the networks look like that carry 49 times the traffic they carry today? In the second installment of Network Paradox, we explore what exactly operators will have to do to their networks to meet those challenges.

GETTING TO 49X

Assuming operators will need to increase capacity by a factor of 49 over today’s networks in any given area, how do they get there? According to Bob DiFazio, fellow at InterDigital (NASDAQ:IDCC), there are some fairly well-defined steps operators can take to improve their existing capacity. The first, and most obvious, is the launch of 4G technologies such as long-term evolution (LTE). 4G is being played up as the answer to many of the industry’s data woes, but according to DiFazio’s estimates if the carriers built LTE networks over all of the frequencies they’ve identified for 4G today, they’d see at most a 2X increase in overall capacity. Double the capacity may not seem like much, but DiFazio said that even that number is generous.

“The fact of the matter is that the spectral efficiency of long-term evolution is marginal compared to that of the latest releases of HSPA+,” DiFazio said. Operators like T-Mobile and AT&T, which are deploying the latest iterations of HSPA, will see far less than a 2X improvement in capacity as they move to LTE as wideband CDMA technologies start bumping up the against the theoretical limits of the amount of information that can be transmitted over a hertz of spectrum. At that point, DiFazio said, any gains in capacity will come from three means: more spectrum, more infrastructure and better optimization techniques that allow networks to get closer to their theoretical peak speeds.

When it comes to optimization, vendors and technology innovators are creating a veritable buffet of solutions they hope will squeeze more capacity out of each cell, many of which are being implemented in the 3GPP’s release 10 standard for LTE Advanced. InterDigital has developed a technology called Fuzzy Cell that allows multi-carrier cell sites to rein in the majority of their cell radii so there is no overlap between cells, cutting down on interference and boosting overall capacity. Lone carriers, each at different frequencies would then extend beyond the traditional cell border to grab users traversing the cell edges. In that fuzzy zone between cells, multiple towers could serve the same user, increasing throughput available to those on the fringes of the cell as well as those at the center, DiFazio said.

Another technology that multiple vendors are working on is coordinated multipoint (CoMP), which like InterDigital’s Fuzzy Cell allows more than one tower to service a single user. But rather than use overlapping cells of different frequencies to mitigate interference, CoMP uses the same frequencies transmitted from separate towers to the same device as a means of reinforcing the signal. You can visualize CoMP as a means of tethering a device to the network through a Web of strands, rather than a single string.

The industry is also investigating the use of simply relays within individual cells to extend coverage, improve cell-edge performance and shorten the distance between transmitters, which together would allow more devices to take advantage of the peak capacity of the cell.

While all of these technologies are critical steps along the 4G evolutionary path, the capacity gains they bring to the network are incremental, DiFazio said. Fuzzy Cell, CoMP and simple relays are technologies that vendors and operators could implement in the short term—within the four to five years of the projected 49X increase of capacity. But Fuzzy Cell would realize a 40% increase in capacity, CoMP a 21% increase and relays a 40% increase. In total, those combined technologies could increase capacity on an LTE network by a factor of 2.5, DiFazio said.

Combine those benefits with a doubling of capacity from new LTE networks, and you get a 5X increase in capacity. That’s an extraordinary increase, Difazio said, “but it’s not 49X. There’s still 9X to go.”

So even after building out their LTE networks, utilizing the 4Gspectrum they’ve spent billions of dollars on at auction and adopting the most up-to-date interference mitigation, coordinated transmission and relay techniques, operators will still have to find ways of increasing their network capacities nine times, almost an order of magnitude. How do they do it? According to DiFazio, operators will do what they’ve always done: build more networks.
While much has been made about the transitions between analog to 2G technologies and the introduction of high-speed 3G data, the vast majority of new capacity on networks today isn’t owed to better technology, but rather more network infrastructure, DiFazio said. According to Agilent Technologies (NYSE:A), in the last 50 years wireless capacity has increased only 20 times due to improvements in spectral efficiency. It’s been boosted another 25X by new spectrum. But operators installing base stations and shrinking cell sizes has produced a whopping 2000X increase in capacity in that same time period.

If operators were to build that 9X of capacity into their networks today using the same macro-cellular topologies it would require shrinking cell radii two to three times, which would result in anywhere from four times to nine times the number of cell sites today, DiFazio said. He cautioned those numbers were just back-of-the-envelope calculations. Just as traffic demands won’t increase uniformly 49 times across all U.S. cellsites, the individual infrastructure requirements for individual cities or cells won’t be uniform. The bottom line, though, is if mobile data traffic increases the way everyone expects it, carriers are going to have a build a lot of networks. What those networks will look like though, is where it gets interesting DiFazio said: “This is going to be more an art than a science.”