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Quality First: New technologies cater to the growing demand for data

March 17, 2015

Over the years, the telecom infrastructure requirements of mobile network operators have undergone a significant change due to the changing behaviour of telecom consumers. The sector has witnessed a major demand shift from traditional voice services to data-based services. According to the Cisco Visual Networking Index 2014, global mobile data traffic is expected to increase by 10 times, at a compound annual growth rate of 57 per cent, between 2014 and 2019. Further, industry analysts are expecting the growth to be driven by greater adoption of cloud and 3G services, the increasing popularity of social networking and video calling, and the emergence of the internet of things. In order to meet this surge in demand and increase their data service revenues, telecom operators across the globe are investing in new technologies and infrastructure.

Traditionally, operators considered network coverage and voice quality as important differentiators while delivering quality service to users. However, customers have now started recognising the quality aspect of mobile internet while making a choice between operators. As a result, the majority of operators are now focusing on new technologies in the data segment to increase the uptake of these services. In order to maintain their competitiveness in the telecom market, companies are making capital expenditure on establishing differentiated infrastructure. Heterogeneous networks have become the most popular choice amongst operators. A key part of most operators’ mobile broadband strategies, heterogeneous networks allow the delivery of additional radio network capacity and coverage through the deployment of small cells. The main reason behind the emergence of such infrastructure, including Wi-Fi and small cells, has been the delivery of high quality services by operators under their complete mobile broadband solutions.

tele.net takes a look at the emerging infrastructure trends in the telecom space and the opportunities for telecom companies to leverage these...

Small cells: Telecom operators need to upgrade the existing networks in line with the increased demand. However, they have been unable to do so due to limited availability of spectrum. In such a scenario, operators are exploring the option of augmenting network capacity by deploying new technologies through various densification efforts. In densification, the macro cells in high-traffic areas are replaced with multiple smaller cells. Therefore, the reduction in the range of each cell helps the carrier to support more users for a given unit area. The other key advantages offered by small cells are greater regulatory compliance (in terms of electromagnetic field radiation), higher speed, precise tracking of customer usage patterns, larger coverage, efficient spectrum reuse, high spectral efficiency and lower cost of deployment.

Another reason for the growing popularity of small cells is that they occupy less space and ensure seamless connectivity. Given the challenges in acquiring land and other permissions for installing towers and other requisite infrastructure, these small cells can effectively replace large cell sites in crowded urban areas and towns. In addition, operators now have the option to augment the existing cell sites using small cell solutions.

Recently, Ozone Networks signed a Small Cell as a Service agreement with Ericsson to provide a neutral carrier-grade Wi-Fi network across India. With this, Ozone will be able to help operators reduce the data burden on their network by utilising the neutral Wi-Fi network.

Distributed antenna systems (DAS): In the enterprise segment, the application of small cells is restricted to small and medium enterprises, with large corporations using DAS in their wireless networks. Two business models for DAS – neutral host and carrier led – are being deployed by companies, depending on their requirements for the transmission of voice and data indoors. DAS can provide efficient mobile connectivity to users through a network of small, low-power antenna nodes, especially in commercial buildings and large campuses where mobile connections are inconsistent. The passive DAS solutions from radio frequency (RF) systems deliver all the capabilities needed to give people better access to wireless services in buildings. However, the performance depends on the RF engineering expertise applied to the designs, including the optimum number, type and positioning of DAS nodes.

The neutral-host capability is a shared-infrastructure model where an independent third party provides coverage and capacity that does not depend on the carrier. This model is gaining popularity in the telecom infrastructure space, especially with the growing popularity of the bring-your-own-device concept to accommodate multiple carriers on an equal basis.

Carrier Wi-Fi: In order to support the data surge, operators have now shifted to the deployment of Wi-Fi networks for minimising the traffic on cellular networks. Over the years, the number of hotspots has increased globally to deliver expanded coverage. According to market research, the number of hotspots deployed globally will increase from 5.2 million in 2012 to 10.5 million in 2018. Further, the thrust for service augmentation and network function virtualisation will drive the carrier Wi-Fi market from $527 million in 2013 to $3 billion in 2018.

Earlier, Wi-Fi technology was introduced to share unlicensed spectrum on a non-interfering basis with autonomous performance and control for any number of users. However, with new technologies like 4G, operators are planning to offload data on such networks by augmenting the design, to closely match their performance with that of cellular networks within the inherent limitations of Wi-Fi. Illustrating the attractiveness of Wi-Fi, a market research study reported that around 22 per cent of new data capacity created in 2014 came from Wi-Fi networks.

A form of Wi-Fi that is creating new business opportunities for telecom handset vendors is Wi-Fi First. Through this, mobile devices would use Wi-Fi as the primary network and cellular networks would be used only to fill the gaps between different hotspots.

Other in-building solutions: According to a report, around 80 per cent of data directed to mobile devices is consumed indoors. However, new wireless technologies such as universal mobile telecommunications system and 4G long term evolution, which are delivered on high frequencies, may not be able to penetrate building walls effectively and thereby at times lead to poor coverage. Therefore, effective wireless in-building solutions are being used by service providers to overcome these challenges.

Further, operators are devising strategies including a healthy mix of macro cell and small cell solutions for seamless coverage. Many of them have started conducting trials of femtocell deployment in developed markets to augment indoor coverage. In the context of the Indian telecom market, limited spectrum availability in the 2100 MHz band will lead to widespread deployment of in-building solutions in order to increase the uptake of 3G services.

Outlook

Telecom operators in India are taking the necessary steps to meet the growing consumer demand for high speed internet, including the implementation of a comprehensive network strategy to deploy both indoor and outdoor coverage solutions. Today, network quality has surfaced as a key differentiator among service providers, which can in turn impact customer churn, especially in the saturated urban telecom markets. Having achieved significant outdoor network coverage, operators will now focus on indoor coverage to offer an enriched customer experience.

 
 

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Discussion Board

A Maturing Ecosystem: Strong outlook for 4G
  • Amitoj Arya, Director, Telecom Strategy, EY
  • Hemant Joshi, TMT Leader, Deloitte India
  • Murtuza Onali Kachwala, Managing Director, Telecom, Media and Entertainment Industry Practice, Protiviti, India
  • Inderpreet Kaur, Analyst, Ovum
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