According to the latest data from the UK broadband comparison website Broadband Genie, only around one in ten (11 per cent) mobile broadband users are satisfied with the speed of their mobile broadband. The data claims that exaggerated advertising and unrealistic ‘up to’ speed claims have given the public an unrealistic expectation of mobile broadband that the service cannot live up to. And of course, some operators are better than others as this comparison between Vodafone UK and 3 UK shows. At least from this person’s experience, 3’s mobile broadband service just does not work.
The relative success of Asus Eee PC has created a new product category – netbooks, also called Mobile Internet Devices (MID) or Ultra-Low Cost PCs (ULPCs). Never to shy away from new product hype, ABI research has promptly come out with a forecast calling for over 200 million of these little fellas by 2013. A quick note – this is the same size as today’s worldwide laptop market! The report probably assumes (like Michael Dell does) that mobile operators will play a significant role in pushing these babies out, bundled along with their 3G data plans – with subsidies to boot. This model is no different from the one where the operator subsidises expensive phones to sell a voice plan.
Given that netbooks are all about always-on connectivity, 3G in addition to WiFi is a must for this product category. This leads to the question – does it have to be built-in? I feel that the answer is yes. I am aware of the arguments against embedding 3G functionality in laptops. However, if you recall, PCMCIA cards were the initial enablers for WiFi connectivity – I still have one of those lying around somewhere. But convenience coupled with declines in module costs drove OEMs to deliver laptops with integrated WiFi functionality. The same trend is likely to be repeated with integrated 3G as well. To begin with, USB dongles hanging out of netbooks will look pretty awkward – in addition, embedded antennas down the side of a screen will deliver a better signal that translates into higher speeds. Instant 3G connectivity when the netbook is turned on, similar to WiFi, will also be a key selling point. Finally, mobile operators may end up driving this product category and the OEMs will have little choice other than partnering with the operators. Recent events seem to bear this out. Vodafone announced that it will start selling Dell’s Inspiron Mini 9 ultra-mobile device with built-in mobile broadband, exclusively through Vodafone stores and online, and directly from Dell, in key European markets. More mobile operators are launching netbooks with integrated 3G modem functionality in partnership with OEMs. T-Mobile Germany announced that it will be selling the Asus Eee PC 901 Go with integrated mobile broadband. The announcement also states that the 3G connection will be up and running when the netbook is switched on similar to WiFi. Acer, the world’s third largest PC vendor, is reportedly in talks with several 3G (third-mobile operators such as Chunghwa Telecom and Taiwan Mobile in Taiwan, as well as T-Mobile International, Vodafone Group and Orange in Europe to supply netbooks with built-in 3G.
LTE (the GSMA-adopted roadmap to 4G for GSM/UMTS carriers) has been getting a lot of attention of late. Verizon Wireless plans to begin network deployment in 2009 (using their newly acquired 700MHz spectrum) with full network deployment in 2010 and beyond. AT&T has also announced LTE rollout plans in 2012. Vodafone is also making the obligatory statements about rollout plans in 2011-2012 time frame – its ex-CEO, Arun Sarin has made snarky comments about Verizon needing LTE more than Vodafone owing to the inability of EV-DO to scale up to near-4G speeds like HSPA.
With the possible exception of Verizon, how real are these LTE rollout plans especially given the current financial turmoil? My bet is that 3G operators will look to squeeze the last ounce of return by upgrading their 3G/HSPA networks to HSPA+ (also called Evolved-HSPA or Advanced HSPA) long before they consider LTE. In fact, Japan’s Softbank Mobile has already chosen HSPA+ over LTE because of cost and backward compatibility. The reasons are as follows:
- No marked difference in spectral efficiency – LTE proponents talk about 144Mbps Downlink (DL) and 50+Mbps Uplink (UL) speeds. But realization of these speeds require available spectrum in excess of 20 Mhz. Now probably is not a good time to be buying spectrum. As the chart shows (courtesy: Qualcomm), spectral efficiency of HSPA+ (when MIMO is included) is close to that of LTE when you consider 5Mhz spectrum.
- Significant less Investment in Infrastructure – It is much easier and less expensive to upgrade HSPA to HSPA+ given that LTE is based on OFDM – a completely new modulation scheme while HSPA+ is still based on W-CDMA. LTE needs a completely new set of radio access and core infrastructure components – not only are the radio access algorithms different, the signaling and control protocols from the access to the core are also significantly different.
- Backward compatibility – It is simpler for a HSPA+ subscriber to gracefully handover to a HSPA network – the connectivity between RNC and the core (SGSN and GGSN) remains as before. Significant complexity exists for handover to be implemented between 4G/LTE and HSPA+ networks.
- Handset and terminal availability – Availability of LTE handsets may be less of an issue – clearly, the initial application for both HSPA+ as well as LTE is in mobile broadband (with USB dongles). It is reasonable to expect that HSPA+ dongles will be cheaper than those supporting LTE – given that a new semiconductor ecosystem needs to emerge that supports LTE.
At the recent Citigroup Technology Conference, Dell’s CEO, Michael Dell indicated that the strategy for selling the company’s ‘netbooks’ would be via the wireless network operators – the former would be subsidized to consumers along with 3G service. Actually, this model is not new – Carphone Warehouse in UK has been giving away free laptops in exchange for a 3G subscription for many months now.
CARPHONE WAREHOUSE - FREE LAPTOP OFFERS