LTE – Rough patches

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LTE has great promise but it is still very immature.

  • Everyone seems very excited by the prospect of LTE and how much it will add to the mobile experience.
  • However, just like last time, everyone has forgotten that it is a new technology and as such it is going to have teething problems.
  • The first and most pressing of which is handover.
  • LTE brings the number of totally different radio technologies co-existing to three. (OFDM (LTE), CDMA (3G) and TDMA (GSM))
  • To be effective, the basestation and the handset need to be able to flip between each of these three during both voice and data sessions without dropping the connection.
  • Furthermore they must be able to do with an array of equipment from different vendors.
  • To date seamless handovers between LTE and 3G have been reported but only between handsets and infrastructure made by the same vendor.
  • Telefonica has now claimed to be able to affect the handover with equipment from different vendors but only in its labs.
  • This was exactly the same with the 2G to 3G transition and because of this (among other things) it took much longer than expected for 3G to really take-off.
  • This time around, the experience from 3G should help 4G to mature more quickly, but there still going to be a lengthy period where 4G devices constantly drop calls as they switch from one radio to another.
  • They will also tend to gobble battery power significantly faster than 3G, much to the annoyance of users.
  • This will be construed as bad service and immature technology which, combined with the high prices being charged for the services, is likely to keep users at bay.
  • I am a big fan of LTE as it offers superb spectral efficiency and flexibility to efficiently offer all manner of services but it is going to take time before it is good and cheap enough for all and sundry.
  • As a result, I think that those expecting LTE to drive the next big explosion in mobile will be disappointed for a little while yet.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.