Opportunities and Challenges in the Big Data Era

YLH: Even though many 3G services are just up and running, LTE is already being deployed around the world. What is the driving force behind this? In your opinion, what is the proposition of LTE?

WH: I think the proposition to all consumers is faster data services. As we move from a voice-centric world to a data-centric world, there is much greater demand for data, speed, and access to information. The proposition is also a consistently good experience. Relative to 3G, LTE/4G allows operators to provide better use of limited spectrum and more efficient data.

YLH: In the big-data era, how will 2G, 3G and 4G (LTE) networks coexist?

WH: I think, for the most part, 4G networks are going to overlay existing 2G and 3G networks in established markets. The challenge is to move the subscriber base to the more LTE technology with fallback operation on older 2G/3G networks. However, in the future, operators will “refarm” their spectrum. That is taking existing spectrum operating with older 2G or 3G technology and replacing it with newer technology, like LTE. It is less expensive to deliver a data byte using LTE than 3G and 2G.

YLH: Will 4G networks completely replace 3G networks? When do you think LTE networks will be available worldwide?

WH: It really depends on the operator. If they have significant CAPEX already invested in 3G infrastructure, as is the case for many operators in the U.S., then it will take longer for 4G networks to become prominent. 4G is just starting to be deployed, and you always need a fallback. If you are in a market that doesn’t have 4G, then you compete on 3G. So it really depends on how aggressive an operator is in deploying 4G, and that is a function of how much money they have to invest in their networks and spectrum availability. It’s like renovating your house bit by bit. You may not have the funds to do it all at once, so you prioritize according to funds, goals and necessity. There is another side, which is operational efficiency for delivering data. If subscribers are demanding more data, you are then forced to meet this need or lose them to competition; it becomes a fight to provide a fast network to retain and attract new customers. This is another factor that drives aggressive deployment. 

YLH: As LTE and HSPA+ networks are more widely deployed, lower-power small cells are becoming popular. What’s your opinion on the business model of small cells?

WH: Small cells allow an operator to reuse spectrum to deliver service in a targeted area. In a macro view, small cells are about coverage and capacity. As people are more data dependent, there is an expectation that a data network is going to be available. It’s necessary for operators in a highly competitive environment to deliver the user experience that subscribers expect. For example, if you go to the mall and you want to look something up but can’t because of poor coverage or poor data speeds, you may become unsatisfied and view your operator unfavorably. Low capacity might mean you are in one part of the city and have really fast speed, but then you go to the mall, and it’s really slow. That is another factor that influences customer satisfaction or dissatisfaction. When it comes time to renew your contract, you may not renew it simply because of that poor experience. In the operator community, the churn rate is a key performance indicator. Therefore, it is in the operator’s interest to have good coverage and capacity.

YLH: Chinese operators have started large-scale Wi-Fi deployment. Some say Wi-Fi is the real big deal. What do you think about the importance of Wi-Fi?

WH: Wi-Fi is an important way of offloading data without acquiring additional spectrum. You have small cells that can offload data in a small area, but at the same time, you still have capacity issues because spectrum is finite. So operating Wi-Fi in unlicensed spectrum is another tool that operators can use to meet customer data demand.  In some cases, Wi-Fi access points may be integrated into small cells that complements or supplements an operator’s data capability.

YLH: Self organizing network (SON) is a concept for automating network operations and management. Why does LTE need SON? What are the benefits of SON in LTE?

WH: Conceptually SON allows an operator to automatically optimize their existing and newer LTE networks. With LTE and small cell technology enabling higher data traffic, operating and managing the network will become more complicated. SON allows for newer base stations to get online with minimal configuration and optimizes these stations’ operational characteristics to best meet the needs of the overall network. For example, instead of sending a technician out to adjust cellsites’ antenna directions and increasing power levels, SON allows for these tasks to be done automatically and quickly. All this means SON potential is an operational efficiency gain for the operator.

YLH: What are the opportunities to promote the development of TD-LTE and FDD-LTE?

WH: The largest driver for TD-LTE success will be China Mobile, and in the FDD-LTE world, in my opinion, Verizon Wireless has shown that it is global catalyst. While there were other operators, such as MetroPCS, who launched LTE before Verizon in the U.S, it takes a large-scale operator with hefty resources and an aggressive plan to accelerate LTE take-up. It’s the same with China Mobile; there are opportunities because it’s sufficiently large enough to accelerate the TD-LTE ecosystem, and as a result global operators, particularly in Europe, Japan and the U.S. can benefit. 

YLH: Finally, can you predict the trends in the wireless sector?

WH: From the consumption standpoint, operators are trying to move people from regular voice phones to smartphones. As people adopt smartphones and get attached to data, there will be no stepping back to regular voice phones. The consumption profile is such that voice calls have diminished relative to previous years, and data consumption is much higher with convenient habits such as social networking, surfing the Internet, consuming streaming video and audio. Multiply this worldwide and that adds up to a lot of bandwidth consumption. More vendors therefore have the opportunity to provide effective solutions for operators to meet the customer demand. It’s tough because there are over-the-top (OTT) players, like Tencent QQ (messaging) and video content players such as YouTube and Youku, who provide free services and generate data consumption. As customers increase their use of these OTT services, it becomes difficult for operators to monetize their own alternative services. In essence, the OTT player’s brand will supersede the operator’s brand for that particular service. This is a problem for operators because operators are struggling for ways to increase the average revenue per user (ARPU). The environment today is such that operators are spending a great deal of capital to boost infrastructure to deal with demand created by third-party services. This trend is continuing and operators are looking for solutions.