LTE economics dependent on RF and antenna design in the handset says RTT study

The study has also forecast that data traffic will see a thirty-fold increase in volume over the next five years (from three to 90 exabytes (a million terabytes)). However, over the same timescale, based on present tariff trends, income will have increased at the most by a factor of three.

“LTE operators need to listen carefully to the findings of this study,” said Geoff Varrall, Executive Director at RTT and lead author of the study. “The move to LTE, if coupled with investment in band flexibility and improved year on year user equipment efficiency, can provide a positive and improved return on present and future network investment, or put another way, allows operators and carriers to make money out of data volume growth.”

While some operators are looking to simply increase network density, the problem with this is that capital and operational costs increase through a composite of site acquisition, site rental, site energy cost, hardware and software investment and backhaul costs. Using subscriber ADSL lines as backhaul via femtocells partly provides a solution to the back haul cost issue and can increase local area network density in a cost-effective way at the subscriber’s expense. However femtocells address local area access economics not wide area access economics. Similarly MIMO achieves high peak data rates in small cells but if poorly implemented in user equipment compromises SISO performance in larger diameter micro and macro cells where average data throughput is more important, having a more direct impact on the user experience.

Instead the combination of user equipment efficiency and extended multi band support will have a more positive impact on mobile broadband radio access economics than commonly assumed or presently modeled. Implementing additional bands should however only be considered if performance in existing bands is maintained.

The study also concluded that it is also important to address the growing disparity between bench top measurements and real life user equipment performance. This is resulting in best to worst differences of 7dB in user equipment performance. A network cannot be dimensioned to meet defined user experience expectations with this degree of performance uncertainty. RF and baseband innovation help to reduce this difference. Changes to conformance and performance measurement methodologies are also required to reduce the gap between what is measured on the bench and real world performance.

There is clearly a demand side opportunity if delivery cost, investment, innovation and test issues can be addressed.

This collaborative industry, technical and commercial study quantifies the relationship between user equipment performance, quality of service, quality of experience and the operator and industry EBITDA (Earnings Before Interest Tax and Depreciation of Assets) return. It is sponsored by Peregrine Semiconductor and Ethertronics and it uses as a starting point, a study RTT undertook for Vodafone UK in 2009.