CARRIERS LEARN TO LIVE WITH CAPACITY CRUNCH

Wireless spectrum is a valuable commodity these days as carriers find themselves in a continual battle for new airwaves. Hundreds of mobile phone licenses in busy metropolitan markets such as Los Angeles and New York are in legal limbo as the Supreme Court decides whether once-bankrupt NextWave Telecom can keep these licenses, or whether an appeals court must rule again on the right of the FCC to reallocate the licenses to other wireless players. Other operators already bid billions for these licenses and may have to wait out years of NextWave appeals to see if they can get access to the spectrum.

In addition, the ability of the FCC to auction off more spectrum during the legal uncertainty may be hampered. The federal government has taken off the table the majority of military spectrum the wireless industry was lobbying hard to make available for third-generation services. And the U.S. is just now studying potential bands that could be used for the next generation. The FCC's move to lift the spectrum cap that regulates the amount of spectrum any one service provider can own in a market in 2003 will provide some relief, but carriers still won't have access to virgin spectrum to efficiently deploy data-intensive networks.

Spectrum efficiency wasn't always a high priority on carriers' lists. Spectrum auctions held in the early 1990s flooded the market with more frequencies, and carriers could easily build more cell sites to increase capacity. Today, penetration of wireless services is increasing, disgruntled local governments are curbing the buildout of cell sites and carriers are trying to make way for next-generation networks that will include data services within the limited amount of spectrum they have.

“The important factor is going to be the emergence of data,” said Paul Polakos, director of Lucent Technologies' advanced technologies lab. “Those applications will compete for the same spectrum that is using voice today. We now have to make room for additional voice plus increased demand for data.”

Capacity-enhancing technologies introduced years ago are finally making inroads. Major wireless network vendors are integrating proprietary, capacity-increasing equipment into their networks. And more efficient voice coders are promising significant capacity boosts.

The capacity issue is perhaps most critical to Cingular Wireless, which has been under fire of late for its decision to overlay GSM/GPRS technology on its existing TDMA network. Critics claim GSM fundamentally provides less capacity than Cingular's existing TDMA networks. TDMA technology has an inherent capacity advantage over GSM technology, but Cingular Chief Technology Officer Bill Clift says vendors have committed to providing Cingular with a flavor of GSM that adds capacity three to four times that of TDMA. Capacity enhancements will become an increasingly important element to all GSM operators building out GPRS networks because carriers are required to set aside voice channels in order to offer data services.

“Those are contractual commitments to us with really significant penalties,” Clift said. “The more efficiently we use the spectrum, the more we have available for data. It's going to be an aberration as it consumes spectrum, and none of us knows how fast this will happen.”

New voice compression technology, known as advanced multiple rate (AMR) vocoders, promises to provide the majority of capacity enhancements for Cingular, Clift said. But the enhancements — which could add up to 150% more GSM capacity — won't be seen until the majority of Cingular's GSM phones are AMR capable. But the carrier plans to validate AMR handsets in its networks during the second quarter and quickly seed the market as it launches GSM.

“The new GSM operators in the U.S. will have the AMR benefits faster than their European counterparts,” said Juha Lappalainen, sales director of mobile software for Nokia Networks. “In two years, we expect to see the full benefit of AMR.”

Nokia is providing Cingular with basic GSM technology that offers 33% more voice capacity than TDMA. It is also implementing a method known as dynamic frequency channel allocation to improve the reuse factor of Cingular's frequencies.

Nortel Networks, another Cingular vendor, recently completed trials with Cingular in Savannah, Ga., implementing technologies such as fractional frequency reuse, advanced radio frequency algorithms, automated cell tiering and enhanced handover algorithms. The enhancements resulted in a 120% increase in voice capacity using 18% less radio spectrum. Nortel estimates that these GSM spectral efficiencies can support about 14,000 Cingular subscribers in each cell site.

“Carriers have always gone about increasing capacity with more cell sites and adding more carriers,” said David Murashige, vice president of marketing for Nortel's wireless networks group. “But they have run into difficulties with facility costs and not having enough spectrum to add another carrier. Cingular can gain a lot in operational and capital costs savings.”

Cingular and other wireless operators also are looking at deploying smart antennas, products that have only recently gained acceptance as vendors integrate the technology in base stations and the economies of scale decrease. Smart antennas allow carriers to focus power into specific parts of cell sectors to reduce the amount of interference, creating the ability to double the number of users in a particular sector.

Nortel and Sprint PCS recently completed a trial in Canada using smart antenna technology, which resulted in a twofold increase in voice capacity on a CDMA network.

“We are relentless in exploring things that can maximize the spectrum asset we have,” said Tom Crook, director of technology R&D for Sprint PCS.

CDMA has an inherent capacity advantage over other digital technologies, and the move to next-gen 1X networks will double capacity again. But CDMA carriers still are looking for ways to increase capacity in preparation for the onslaught of data services.

Sprint PCS and other carriers have been waiting for vendors to incorporate stand-alone smart antenna technology into existing products.

“It's just a matter of the technology maturing to the point that vendors are comfortable integrating it into their infrastructure,” Crook said.

Leap Wireless Chief Technology Officer Mark Kelley said his company plans to begin trials of smart antenna technology shortly. Educating vendors about the costs associated with the technology is key. “We want vendors to see our point of view,” Kelly said. “If it costs $1 million and triples capacity, who cares? I can add more cell sites for that. All of the different vendors are becoming proactive and are beginning to see things from the carriers' point of view.”

Lucent last year announced plans to integrate smart antennas and a proprietary technology known as Bell Labs Layered Space-Time, or BLAST, in its 3G-ready Flexent OneBTS base station. BLAST is an advanced intelligent antenna technology innovation that allows the capacity of a given frequency band to increase proportionally to the number of antennas for data throughput. Lucent plans to incorporate transmit diversity technology, which reduces the fading of a wireless signal coming on the downlink, in today's CDMA base stations. This increases capacity by 20%. The next phase involves the use of smart antennas, which raises capacity by a factor of two. And BLAST, designed for more advanced data systems, could raise capacity by 300%, Polakos said.

A new CDMA voice vocoder, known as a selectable mode vocoder, could save operators an additional 50% to 60% in capacity. CDMA operator Leap Wireless, in conjunction with Qualcomm, recently tested a concept called receive diversity, which involves placing two antennas on one handset to find the stronger signal. In time, this technology could increase capacity by an additional 50%, Kelley said.

Still, as Nokia's Lappalainen pointed out, the methods available to increase capacity are limited by basic RF physics. There's only so much capacity carriers can squeeze out of a network, and carriers always will be looking for more spectrum.