4G Trends Exec Summary - July2010

8/3/2019 4G Trends Exec Summary - July2010

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M a r a v e d i s I n c . , 4 1 0 r u e d e s R e c o l l e t s , S u i t e 3 0 1 , M o n t r e a l , Q CH 2 Y 1 W 2 C A N A D A

By: Robert Syputa and Chad PralleReviewed By: Adlane Fellah

July10

4Ggear Quarterly Report:Infrastructure Trends

Issue 2


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Executive Summary

The wireless industry has made it clear over the last year or so that 4G technology is a short-termnecessity in mature markets, and the long-term answer to broadband connectivity worldwide. In maturemarkets, consumers are beginning to find ubiquitous access to medium or higher-rate broadband a

necessary part of their communications capabilities. In developing markets, wireless will continue to bethe only affordable way to deliver broadband and governments will foster those services to promoteeconomic growth. Thus, it is clear that the experience with voice services over the last two decades inwhich it overtook and caused the decline of wireline will repeat itself with broadband. That is, wirelesswill become the dominant method to deliver broadband services tousers. This process may take 10 years or more, but it will happen.

So, we find ourselves on the verge of another upgrade of wirelesstechnology and the potential is tremendous. However, the entirewireless industry is in the midst of interesting circumstances that arecausing fundamental changes throughout the industry. The globalrecession, new technologies and devices, open networks, an explosionof data usage, commoditization and the new competition that brings; all

of these things have made and will continue to make serious waves inthe industry. As a result, the list of top 5 infrastructure providers hasbeen rearranging itself for the past few years and we expect this tocontinue.

The biggest issue that service providers are dealing with today is howto deal with the explosion of data usage in the face of modestlyincreasing revenues. Carriers expect to see a 10,000% increase in per-capita data usage over a five-year period. At the same time, many oftheir revenue-generating services such as ring-tones and SMS are atrisk as SmartPhones proliferate. Carriers are scrambling to determinehow to remain profitable in this new environment.

So, what factors will lead to success for infrastructure vendors? Howwill the oldguard compete with new leaders? Which companies arebest positioned for growth and which kinds of solutions and servicesare likely to promote that growth?

This report focuses on the 10 top vendors in LTE and WiMAX:

Airspan NetworksAlcatel-LucentAlvarionAviat NetworksEricssonHuaweiMotorolaNokia-Siemens NetworksSamsungZTE

With regard to WiMAX, it has been a difficult year. The hope that WiMAX could become a worldwidestandard for mobile broadband access has mostly evaporated. The technology is certainly sufficient, butincumbency is too hard to defeat. 4G network rollouts require the capital that only tier-1 service providerscan provide and they benefit from those providers existing 3G and 2G networks to provide ubiquitousaccess. As a result, the worlds major carriers have been virtually unanimous in their vote for LTE.

The acquisition of MotoroNetworks by NSN showshow competition hasshifted to a few integrated

systems suppliers whichhas left the second tier tocompete on price. The

jewels in the deal includerelationships with NorthAmerican and Japaneseoperators. The exclusion Motorola's patentsindicates the importanceIPR licensing: How IPRlicenses stack up remainthe caveat for wider 4Gadoption and a hope forWiMAX to regainmomentum


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4Ggear Quarterly Report Issue 2

2 Copyright 2010 Maravedis Inc. March 2010

The situation for WiMAX is anything but dire, however. We fully expect to see continued growth in theWiMAX market. In the short term there are still many network deployments underway with significantcapacity to be filled. Some of these will continue unim peded by LTEs impending arrival. In addition, weexpect to see tremendous growth in WiMAX vertical markets, driven by low-cost solutions that have beenenabled by the significant investment of the WiMAX ecosystem. Certain vendors, such as Motorola,Alvarion, and Airspan, who have a good head start on applicable solutions, have already decided toembrace these vertical markets. Others including Huawei and Samsung are not as well positioned for thismarket at this time.

So we expect LTE to replace WiMAX almost completely for mainstream mobile broadband applications,but when? Although there are rumblings about many large WiMAX operators switching to LTE, and Yota

just announced definitively that it would do so, WiMAX operators will continue to grow their networks untilLTE is a real threat that is, when the networks are installed and mature enough for commercial service.Although Verizon states that it will launch 20 to 30 LTE networks in 2010, our findings are that thetechnology is not sufficiently mature to warrant such early availability. At this stage of solutiondevelopment we expect that all early-adopter carriers will announce delays later this year, with suitablecommercial network stability of LTE networks happening later in 2011.

A vendors success in LTE will certainly depend upon the traditional success factors: existing customer

base, successful product development, etc. However, the ongoing capacity crunch from SmartPhones isdriving significant changes in the topology and methodology of network deployments. Vendors whorecognize this change and provide the best solutions to it have an opportunity to significant improve theirmarket share.

First, networks will be bigger. Improvements in technology and additional spectrum are not sufficient toprovide the additional capacity that will be required in the next 5 years. Carriers will also need to install anorder of magnitude more base stations in their networks. The bulk of these base stations will be managedpicocells, a significant portion of which will need to be installed in non-traditional locations, which weexpect to drive innovation in high-efficiency compact base stations and backhaul.

The issue facing service providers is that this increasing bandwidth demand does not arrive with acorresponding increase in revenues. Carriers need to deploy and manage these base stations at

significantly lower costs per site. Recognizing this need, vendors are actively promoting Self-OrganizingNetwork (SON) solutions to enable a plug-and-play experience with base stations. SON is a no-mansland today, however. There are only very high-level guidelines for SON functionality, and no consensuson how these functions should be performed. Furthermore, there is not yet any real push forinteroperability, which we feel is an absolute requirement for the long-term success of such a solution.

In this environment, we expect Ericsson and Huawei to fare very well. Other vendors may find themselvessqueezed between Ericssons incumbent leadership position and Huaweis pricing and financing. Nokia-Siemens Networks has developed some very interesting solutions focusing on flexibility, efficiency, andperformance which, combined with a good existing customer base, may enable it to keep pace. Thecommon theme from all vendors is end-to-end solutions and Self-Organizing Networks.

In short, these are still very early days for LTE and a lot will depend upon the performance of trials over

the next 12 months. Implementing a new airlink standard is exceptionally tricky and the major vendorshave not attempted something so new and so complex for a long time. By comparison, WiMAX took 5years to go from standardization to mature product. Vendors will benefit to some extent from the WiMAXecosystem, but one should expect delays.

One note of caution, however: the point-of-no-return for a switch from WiMAX to LTE is likely in themillions of subscribers for some carriers. Waiting for LTE delays to enable WiMAX to compete in thatmarket would be wishful thinking. LTE will be the dominant world standard for mobile broadband, andWiMAX will have to find its place in that world.


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Table of Contents

Executive Summary ...................................................................................................... 1

Key Findings .................................................................................................................. 3

Questions Answered by This Report ........................................................................... 5

List of Figures ............................................................................................................... 9

List of Tables ................................................................................................................. 9

Forward ........................................................................................................................ 10

Methodology and Resources ..................................................................................... 10

1. 4G Market Update and Overview ............................................................................ 12

2. Major Events ............................................................................................................ 20

3. 4G RAN Vendor Landscape................................................................................... 263.1. Airspan Inc......................................................................................................................26

3.1.1. Overview...................................................................................................................263.1.2. Solutions ...................................................................................................................263.1.3. Product Overview .....................................................................................................273.1.4. Recent News ............................................................................................................303.1.5 SWOT ........................................................................................................................303.1.6 Future ........................................................................................................................31

3.2. Alcatel-Lucent .................................................................................................................323.2.1 Overview....................................................................................................................323.2.2. Solutions ...................................................................................................................343.2.3. Product Overview .....................................................................................................353.2.4. Recent News ............................................................................................................383.2.5. SWOT .......................................................................................................................40

3.2.6. Future .......................................................................................................................413.2.7. Recommendations ....................................................................................................41

3.3. Alvarion...........................................................................................................................423.3.1. Overview...................................................................................................................423.3.2. Solutions ...................................................................................................................433.2.4. Product Overview .....................................................................................................433.3.5. Recent News ............................................................................................................443.2.6. SWOT .......................................................................................................................453.2.7. Future .......................................................................................................................463.2.8. Recommendations ....................................................................................................46

3.4. Aviat Networks ................................................................................................................463.4.1. Overview...................................................................................................................46

3.4.2. Solutions ...................................................................................................................473.4.3. Product Overview .....................................................................................................483.4.5. Recent News ............................................................................................................493.4.6. SWOT .......................................................................................................................493.4.7. Future .......................................................................................................................50

3.5. Ericsson..........................................................................................................................503.5.1. Overview...................................................................................................................503.5.2. Solutions ...................................................................................................................513.5.3. Product Overview .....................................................................................................51


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3.5.4. Recent News ............................................................................................................513.5.5. SWOT .......................................................................................................................523.5.6. Future .......................................................................................................................523.5.7. Recommendations ....................................................................................................53

3.6. Huawei............................................................................................................................533.6.1. Overview...................................................................................................................53

3.6.2. Solutions ...................................................................................................................543.6.3 Product Overview ......................................................................................................543.6.4. Recent News ............................................................................................................553.6.5. SWOT .......................................................................................................................563.6.6. Future .......................................................................................................................563.6.7. Recommendation ......................................................................................................56

3.7. Motorola..........................................................................................................................573.7.1. Overview...................................................................................................................573.7.2. Solutions ...................................................................................................................583.7.3. Product Overview .....................................................................................................583.7.4. SWOT .......................................................................................................................593.7.5. Future .......................................................................................................................59

3.7.6. Recommendations ....................................................................................................603.8. Nokia-Siemens Networks................................................................................................60

3.8.1. Overview...................................................................................................................603.8.2. Solutions ...................................................................................................................613.8.3. Product Overview .....................................................................................................613.8.4. Recent News ............................................................................................................613.8.5. SWOT .......................................................................................................................623.8.6. Future .......................................................................................................................633.8.7. Recommendations ....................................................................................................63

3.9. Samsung ........................................................................................................................633.9.1. Overview...................................................................................................................633.9.2. Solutions ...................................................................................................................64

3.9.3. Product Overview .....................................................................................................643.9.4. Recent News ............................................................................................................703.9.5. SWOT .......................................................................................................................713.9.6. Future .......................................................................................................................723.9.7. Recommendations ....................................................................................................72

3.10. ZTE...............................................................................................................................723.10.1. Overview.................................................................................................................723.10.2. Solutions .................................................................................................................723.10.3. Product Overview ...................................................................................................733.10.4. Recent News ..........................................................................................................753.10.5. SWOT .....................................................................................................................763.10.6. Future .....................................................................................................................76

4. 4G Infrastructure Vendor Ranking............................................................................. 764.1 WiMAX Vendors .............................................................................................................76

4.1.1. Description of Criteria ...............................................................................................774.1.2. WiMAX Rankings Analysis ........................................................................................77

4.2 LTE ..................................................................................................................................784.2.1. Description of Criteria ...............................................................................................784.2.2. LTE Rankings Analysis .............................................................................................79

5. 4G Device Updates ................................................................................................... 79


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5.1. WiMAX Device Trends and Drivers ..............................................................................795.1.1. WiMAX Device Landscape as of Years End 2009....................................................805.1.2. WiMAX Became Fully Mobile in 2010......................................................................805.1.3. What Became of Volume Expectations for WiMAX Laptops and UMDs? ..................80 5.1.4. Will Dual-Mode Devices (GSM + WiMAX or CDMA + WiMAX) Gain Momentum? ....815.1.5. Fixed Device versus Mobile Device: Long Term Trend .............................................81

5.2. LTE Device Trends and Drivers ...................................................................................815.2.1. LTE Device Landscape .............................................................................................825.2.2. LTE-Only Demand ....................................................................................................83


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List of FiguresFigure 1 - Regional Breakdown of POPs Covered by Top 25 LTE Operators (Committed) Worldwide.... 22Figure 2 - Mobile ARPU Breakdown of Top 25 LTE Operators ................................................................. 22Figure 3 - Airspan Base Stations ................................................................................................................ 27Figure 4 Airspan HyperMAX .................................................................................................................... 28Figure 5 Airspan MicroMAXe ................................................................................................................... 28Figure 6 - MacroMAXe ................................................................................................................................ 29Figure 7 - Airspan ControlMAX ................................................................................................................... 29Figure 8 - Airspan VoiceMAX ...................................................................................................................... 30Figure 9 - Alcatel-Lucent 2010 Organization Structure ............................................................................... 32Figure 10 - ALcatel-Lucent High Leverage Network ................................................................................... 33Figure 11 - Alcatel-Lucent 9740 WiMAX Access Controller ....................................................................... 36Figure 12 - Alcatel-Lucent 9753 WiMAX Operation and Maintenance Center ........................................... 36Figure 13 Alcatel-Lucent Wireless RAN Product Applications................................................................. 37Figure 14 - AL-LU Evolved Packet Core Solution ....................................................................................... 38Figure 15 - Alvarion Product Focus ............................................................................................................ 43Figure 16 - Aviat StarMAX 6000 Base Stations .......................................................................................... 48Figure 17 Aviat StarMAX 3000 Subscriber Stations ................................................................................ 48Figure 18Aviat Wireless Services Gateway ............................................................................................. 48

Figure 19 Aviat StarMAX 2100 Subscriber Stations ................................................................................ 49Figure 20 - Samsung M-WiMAX Base Station SPI-2410 ............................................................................ 64Figure 21 Samsung M-WiMAX Base Station SPI-2213 ........................................................................... 65Figure 22 - Samsung Picocell U-RAS Light Series 3P ............................................................................... 65Figure 23 - Samsung Picocell U-RAS Light Series 3F ............................................................................... 66Figure 24 - Samsung Picocell U-RAS Light Series 5 .................................................................................. 66Figure 25 - Samsung SWD-M100 Mondi .................................................................................................. 66Figure 26 - Samsung SWD-V300 ............................................................................................................... 67Figure 27 - Samsung Smart Phone (SPH-M8400) ..................................................................................... 68Figure 28 - Samsung Mobile Internet Device (SWD-M100) ....................................................................... 68Figure 29 - Samsung USB Dongle (SWC-U200) ........................................................................................ 68Figure 30 - Samsung USB Dongle (SPH-H1300) ....................................................................................... 69Figure 31 - Samsung PC Card (SWC-E100) .............................................................................................. 69

Figure 32 - Samsung WiMAX Macrocell Unit .............................................................................................. 69Figure 33 - Samsung Picocell ..................................................................................................................... 70Figure 34 - Samsung Femtocell .................................................................................................................. 70Figure 35 - ZTE E9200 (W100/200) ............................................................................................................ 74Figure 35 - ZTE B9100 (BBU), R9100 (RRU) ............................................................................................. 74Figure 36 - ZTE ZXMBW-A250 ................................................................................................................... 74

List of TablesTable 1 - Comparison of Spectral Efficiency by 4G Access Standard ........................................................ 16Table 2 - List of Typical Base Station Formats and Characteristics ........................................................... 17

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4G Trends Exec Summary - July2010