It is interesting to look at the details of Verizon's spectrum purchase from US Cellular in the St Louis market area (EA-96). Many industry sources talk about how purchase will provide 20MHz for Verizon's LTE. While this is true, it should not be confused with Verizon deploying a 20 x 20 channel. As can be seen from the Spectrum Grid view of AllNet Labs' Spectrum Ownership Analysis Tool, Verizon is purchasing the AWS B channel and previously owned the F channel. Although Verizon will own 20 MHz of spectrum, it is not contiguous and until they can deploy Release 12 software code into their network, they will have to operate this spectrum as two separate 10 MHz channels. Release 12 is likely a 2015 or maybe 2016 release since operators are either planning or deploying Release 10 currently.
The industry talks alot about Carrier Aggregation (CA) but there are several facts that are not well understood. First, Release 10 includes the functionality for carrier aggregation but the frequency band definitions for the US are not included until Release 11. Another point that needs to be understood is that the initial definitions require that aggregated carriers be in contiguous blocks in different spectrum bands (inter-band) or in separate blocks but in the same band (intra-band). For Release 11, only 2 carriers can be aggregated together. For Release 12, Verizon has sponsored a work group that will allow 3 carriers to be aggregated, 1 from the 700MHz band and 2 different carriers from the AWS band. Thus, Release 12 will be necessary for Verizon to aggregate their two AWS blocks of spectrum with their 700 MHz LTE.
The Spectrum Grid view is sorted by the EA geographical area which show that the AWS B and C licenses have not be dis-aggregated. The A channel licenses do show discontinuity since they were originally auctioned as CMA licenses. AT&T through their Leap purchase will strengthen their AWS ownership in this market.
To look at the competitive picture for spectrum in the St Louis market (EA-96) we can look at the
Company By Band worksheet from the AllNet Labs' Spectrum Ownership Analysis Tool. Looking first at Verizon, we can see the variety of spectrum depths across the EA that Verizon indicated in their FCC filing. Verizon will range from 62 MHz to 117 MHz depending on the county. The only county that Verizon controls 117 MHz is Montgomery County, MO which is 40 miles west of St. Louis.
Looking at the other carriers in this market we see that US Cellular will still control between 32 MHz and 69 MHz, while AT&T with their Leap purchase will control between 61 MHz and 105 MHz.
T-Mobile controls between 40 MHz and 60 MHz with two counties at 70 MHz and Sprint with their Clearwire purchase controls between 130 MHz and 242 MHz.
For the past month I have been examining the effect of WiFi off-loading based upon my usage habits. To do this leave WiFi turned off so my phone only receives data service from a commercial carrier network. This was not a simple task because the Smartphone network optimizer will continue to request to have WiFi turned on and whenever you are using location services (Google+) not having WiFi provides a notification "to improve you location, please turn on WiFi".
My typical monthly data usage averages around 1.3 GB per month with WiFi enabled. I travel infrequently and have WiFi both at home and work. I think it is important to note that my work WiFi doesn't block YouTube, Pandora, Facebook, or WatchESPN, but I typically use a WiFi only tablet for music streaming or the watching a major sporting event e.g The America's Cup or the MBL playoffs.
In the month of September, I ran 5.7 GB of data in what I consider to be a typical work month. What this equates to is 3.4 GB of data that was off-loaded from the carrier network to the WiFi network for which I also pay. Another way to look at it is that my carrier only sees 1/3 of my usage.
Using some of the wholesale data rates that have been thrown around in the trade press, $5/GB; the cost to support my data usage through a WiFi Off-loading provider would be $17/month. If I am paying my carrier $30/month for my data usage and they pay a Wi-Fi off-loading provider $17/month, they only end up with $13/month to offset their operational expenses (site leases, backhaul costs, employees...)
When you consider the "true" smartphone usage and where the majority of that traffic is handled today, it is clear why cellular carriers have been reluctant to purchase wholesale access to data or a WiFi off-loading partner.
Check back next month. After my billing period closed, I spent the weekend out of town, so streaming two college football games on Saturday (Dish Anywhere) and 1 NFL game on Sunday will all be part of my October usage. With just 9 days on my billing cycle, I have already consumed 3.3 GB.
With the news that Verizon is beginning to turn up some of their AWS spectrum with LTE, I will examine the spectrum available for those LTE deployments in the Top 5 CMAs with the Spectrum Ownership Analysis Tool.
New York:
Verizon clearly holds 40 MHz of AWS spectrum. To see how this spectrum will affect their total LTE capacity I have evaluated the LTE channels that Verizon can deploy based on their stated direction. Based upon Verizon's stated direction I have eliminated any 700 MHz 5x5 LTE channels, any cellular LTE channels, and any PCS LTE channels.
With this analysis, it is evident that Verizon will top out at 223 Mbps across all of the counties in the New York CMA.
Los Angeles: In Los Angeles, I would expect Verizon to be deploying a 10 MHz LTE channel until AT&T has shifted its LTE usage of this AWS channel to it "new" 700MHz B band holding.
At this point Verizon is limited to 2 - 10x10 channels or 146 Mbps throughout the Los Angeles CMA.
Chicago:In Chicago, Verizon holds a 20x20 AWS channel.
This combined with Verizon's 700 MHz C-band (10x10) channel will provide 223 Mbps throughout the Chicago CMA.
Philadelphia:
In Philadelphia, the largest channel Verizon can form is a 10x10 channel. When AT&T gets control of the Leap spectrum assets, I would expect a three-way spectrum trade to allow Verizon, T-Mobile, and AT&T to rationalize their AWS spectrum positions.
For the throughput analysis, the additional 5x5 channel that Verizon can form in the AWS frequency band is included with the 2 - 10x10 channels (AWS and 700) for a total metro throughput of 183 Mbps.
Detroit:In Detroit, Verizon can again form a 20x20 AWS channel.
In the Detroit CMA, Verizon can achieve a metro through put of 223 Mbps.
Chicago:
Philadelphia:
Denver:
T-Mobile announced an acquisition this morning of USCellular's AWS spectrum in several markets. This was clearly foreshadowed when I analyzed the Sprint - USCellular PCS spectrum deal earlier this year.
On this chart from the Spectrum Ownership Analysis Tool, you can see the PCS spectrum in Chicago and St. Louis that Sprint acquired along with the subscribers and network. Thus it was clear to see that USCellular's AWS(B) and AWS(E) spectrum was no longer needed.
It clearly makes sense for T-Mobile to acquire this spectrum as indicated in the chart below. In St Louis, T-Mobile will increase their LTE Channel size from 10MHz to 25MHz and in Kansas City, T-Mobile will increase from 10MHz to 15MHz. The chart also highlights the important spectrum position that Leap hold in the AWS band which both T-Mobile and Verizon would desire to add to their portfolio.
With AT&T's announcement that they are meeting some challenges related to testing operation between LTE Band Class 29 and Band Classes 2 and 4, I figured that many readers would appreciate a reference map for how these band classes relate to the US mobile radio and satellite spectrum bands.
All of these screenshots are from the AllNet Labs Spectrum Ownership Analysis Tool, where we display and provide analysis tools related to spectrum ownership for all of the US mobile radio and satellite spectrum bands for all 50 states and US territories.
AllNet Labs Spectrum Ownership Analysis ToolIn the images below, the band classes are color coded Gray for Uplink Spectrum, Yellow for Downlink Spectrum, and Blue for Spectrum supporting Time Division Duplex.
700MHz Spectrum
SMR/Cellular/L-Band Spectrum
AWS/PCS Spectrum - Uplink
PCS/AWS Spectrum - Downlink
WCS/EBS/BRS Spectrum
Recently I reviewed the 3GPP Standards site to check in on the status of LTE Carrier Aggregation. I found a gold mine of information.
First a few definitions: Carrier Aggregation allows a wireless carrier to band together different blocks of their spectrum to form a larger pipe for LTE. This can be accomplished in two ways: Inter-band and Intra-band.
Inter-band combines spectrum from two different bands. The spectrum in each band to be combined must be contiguous within that band. Intra-band combines spectrum from two non-contiguous areas of the same band.
Here is a link to an article from 3GPP that explains Carrier Aggregation.Below is a table summarizing the relevant 3GPP working group descriptions for Carrier Aggregation.
First of all, the current network release for all carriers is Release 9. T-Mobile, Sprint, and Clearwire have announced that they are deploying Release 9 equipment that is software up-gradable to Release 10 (LTE Advance). From the chart, it does not appear that there are any carrier configurations planned until Release 11. Release 10 appears to be a late 2013 commercial appearance and Release 11 will likely be very late 2014 or mid-2015. For Carrier Aggregation to work it must be enabled and configured at the cell site base station and a compatible handset must be available. The handsets will transmit and receive their LTE data on two different spectrum bands for the Inter-band solution. All handsets currently only operate in one mode, 700MHz, Cellular, PCS, AWS, or 2.5GHz.
Highlights by Carrier:
Canada: Rogers Wireless will have support for inter-band aggregation between their AWS spectrum and the paired blocks of 2.5GHz spectrum.
AT&T: Inter-band support in Release 11 for their Cellular and 700MHz spectrum, inter-band support to combine their AWS and Cellular spectrum, as well as configuration to support combining their PCS and 700MHz spectrum. All of the 700MHz band plans only include their 700B/C holdings. No 700MHz inter-operability.
USCellular: Inter-band support in Release 11 for Cellular and 700MHz (A/B/C). No support for PCS or AWS spectrum combinations
Clearwire: Intra-band support for the entire 2.5GHz band. China Mobile is also supporting this with an inter-band aggregation between 2.5GHz and their TDD 1.9GHz spectrum.
Sprint: Support in Release 12 for combining (intra-band)their holding across the PCS spectrum, including their G spectrum but not the un-auctioned H spectrum. No band support for their iDEN band or the 2.5GHz band.
T-Mobile: Support in Release 12 for intra-band in the AWS band and inter-band between AWS and PCS.
Verizon: Ericsson appears to be supporting Verizon's need to combine (inter-band) between AWS and 700MHz C. Not support for Verizon's Cellular or PCS holdings.
Dish: Release 12 support to combine their S band (AWS4) spectrum (inter-band) with the 700 MHz E holdings. This is the only aggregation scenerio for the US that combines FDD operation (AWS4) with TDD operation (700MHz E).
In listening to the wireless carrier earnings calls for 4Q2012, many of the analysts are interested in the timing for offering VoLTE. VoLTE stands for Voice over LTE, in other words, Carrier VoIP. It is unclear whether the carriers are looking at this as a launch of a handset supporting only VoLTE or whether it is essentially a dual-mode handset providing VoLTE where the quality is acceptable and traditional 2G or 3G voice everywhere else.
There is no doubt that 4G speeds enable VoLTE and all of the other VoIP over-the-top (OTT) providers like Skype, OOMA, and GoogleTalk. Carriers will have the ability to better control their customer experience with their VoLTE service since they can change the QOS settings because they can identify the data as a voice call.
I believe that Verizon has essentially stamped a date for their networks being 100% VoLTE for voice as the same 2021 data for shutting down CDMA. This is a reason time frame for networks to mature so they are capable of supporting VoIP seamlessly across the carriers footprint.
A key consideration that is not openly discussed, is the fact that the traditional wireless carriers that began as wireless voice providers have only overlaid their 4G data networks on top of a network that was originally designed for voice. This is important because capacity is impacted differently on a voice network than a data network. A voice user, whether 100ft or 4 miles from a site, essentially consumes the same amount of voice capacity. A data user, 100ft from the site, is capable of transmitting his data with a high efficient data modulation scheme, which reduces the capacity burden on the cell site. A user, 4 miles from the site, will receive his data using a more robust modulation scheme with a significant cost to the site's capacity. In this example the first user transmits his data on a train that has 64 cars for data, while the user 4 miles from the site only has 4 cars to carry his data.
How does this affect VoIP and the launch of VoLTE? With the diagram above I have indicated the areas of each cell site that will have high, medium, and low capacity based upon their voice network design. These are the areas that VoIP voice quality will suffer due to lack of coverage or capacity. With each carrier only offering LTE on one channel, the option to add additional spectrum to solve the capacity issue is not available. Carriers are pursuing small cell solutions to meet this capacity need but it will require extensive time to mature the networks to support VoLTE and VoIP on a standalone basis.
There were several interesting details that came out of the Deutsche Telekom Capital Markets Day 2012. The primary announcement concerned T-Mobile USA being blessed with the ability to sell the iPhone. T-Mobile's new CEO, John Legere indicated that it will have a dramatically different experience than the other iPhone on the market. In addition T-Mobile will sell it unsubsidized, although they will offer financing plans. This should continue to drive T-Mobile's Cost Per Gross Add (CPGA) down, although they didn't disclose if this only affects their iPhone retail business or potentially all of their retail. This is a dramatic step which eliminate the primary issue that I have had with the subsidy pricing model. I have a problem with paying the same monthly rate for my smartphone if I am out of contract as the guy that who just got a new device. With T-Mobile's plan the true cost of upgrading will be carried by the customer, with the expectation of lower monthly rates.
Above is a restatement of the testing data from PC Magazine which T-Mobile released. It is interesting to note how far their speeds have fallen from their early announcements in late 2010 concerning the HSPA+ network. It is also worth noting that they compared AT&T's LTE network. You can again see the loading effect on the network. AT&T's Chicago network was launched September 2011 so it has been loading for over a year reflecting the slower speeds. AT&T's complete New York and San Francisco networks are much newer, launching September 2012, thus carrying less traffic. I am curious why T-Mobile did not chose to compare themselves to AT&T's 4G (HSPA+) network.
From a LTE network build perspective, this was the first time I have heard clearly that T-Mobile is deploying tower top electronics. It is interesting that they state that they are the first carrier in North America to broadly deploy radio-integrated antennas. Clearwire was the first carrier to deploy tower top base stations, followed by Sprint with their Network Vision project. T-Mobile is playing up the fact that their radios are some how integrated into the antenna. Not really an earth shattering announcement. From a technology perspective, deploying the tower top base stations will fill in coverage holes and improve data speeds so it is a good move. In addition, these base stations will be Release 10 capable, meaning a software update will move these radio from the LTE features to the LTE Advance features.
The Numbers:
- Current 4G Network covers 225 million POPs
- Release 10 Equipment being deployed to 37,000 cell sites
- T-Mobile and MetroPCS: Migration not Integration
- With MetroPCS Spectrum Position across Top 25 service areas is improved by 21%
- Planning to shutdown 10,000 macro sites from MetroPCS
- Retain and integrate 1,000 MetroPCS sites
- Operating MetroPCS Markets
- San Francisco
- Detroit
- Boston
- New York
- Dallas
- Atlanta
- Florida (except panhandle)
- MetroPCS brand will increase coverage from 105MPOPs to more than 280MPOPs.
Clearly the wireless industry has locked in spectrum pricing with the MHz-POP pricing model, but is this the right way to look at it as we move into a 4G World where data throughput and capacity are key? For those that aren't familiar, the typical value of spectrum is determined by the $/MHzPOP which is the dollars spent for the spectrum divided by the total amount of spectrum times population that spectrum covers. This model falls short now as carriers are interested in acquiring larger contiguous blocks of spectrum enabling higher users speeds and more capacity.
To use a real estate analogue, a large plot of land is much for flexible for multiple uses, than two plots, even if they are in the same neighborhood. In real estate, the developer that is able to consolidate several tracks of land into a larger development is rewarded as he sells the larger development.
In the wireless industry, we continue to price based upon the $/MHz POP basis, even as carriers such as T-Mobile and Clearwire have combined adjacent channels to create larger bands of spectrum to utilize in larger LTE channels. T-Mobile has worked this year with Verizon, SpectrumCo, and MetroPCS which will allow it to assimilate a 2X20MHz LTE channel on a national basis. Clearwire has leased and purchased operators in the BRS and EBS spectrum bands providing it with an average of 160MHz of spectrum in the top markets. Since Clearwire's spectrum has many geographical boundaries, it is difficult to say how many 20MHz channels they could support across each of their markets, but they have been successful consolidating small bands of spectrum into larger more flexible spectrum bands.
How does a larger band of spectrum affect the wireless carriers? In the US, carriers have deployed FDD-LTE in 1.25MHz channels, 5MHz channels, and 10MHz channels. As you increase the channel size throughput performance improves because a lower percentage of the data packets are dedicated to overhead activities Qualcomm has provided achievable LTE Peak Data Rates for different channel bandwidths based upon whether the antennas are 2x2 or 4x4 MIMO.
Link to Qualcomm DocumentAs you can see in the 4x4 MIMO downlink case, the throughput is 12Mbps greater in the 20MHz channel than the composite of 4-5MHz channels.
So if a 20MHz channel is 4% more efficient than 4 - 5MHz channels should the MHz POPs pricing adjust accordingly?
By the way.. I am going to look for more source data on the capacity improvements for wider channels, a 4% improvement would seem to be relatively negligible. I recall hearing 30% improvements in capacity when a channel size is doubled, but I haven't been able to re-source that data for this blog. More to come.
