We have heard plenty of dire warnings of the impending bandwidth crunch facing mobile operators as a result of proliferating video traffic.
Mostly, however, they have emanated either from vendors hoping to sell products designed to mitigate the impact, or analysts with a vested interest in selling reports on the back of it. But when an operator sounds the alarm, we are more likely to sit up and take notice. This has just happened in the UK, in the wake of the country’s recent auction of spectrum for impending 4G/LTE cellular services.
The auction itself was a disappointment for the UK government, attracting just £ 2.3 billion ($ 3.5 billion) from the five successful bidders, far lower than the target £3.5 billion, and dwarfed by the £22.5 billion ($34 billion) paid in 2000 for 3G spectrum. That, though, was the result of a heated bidding war at the height of the dot com boom before the bubble burst.
The price just paid for 4G represents a more realistic appraisal of future returns on the investment, in the light also of the cost that will be incurred in the backhaul and core networks feeding the radio towers. It was this factor that kept the price down and led to the warning of the bandwidth crunch from one of the successful bidders, the operator Everything Everywhere (EE), jointly owned by France Telecom and Deutsche Telekom, trading under the Orange and T-Mobile brands.
EE’s Senior Manager of Network Strategy, Matt Stagg, was quoted in the UK online magazine IP & TV News warning that 2013 will be a critical year for operators to address an impending “mobile video tsunami” before it is too late. He was referring to escalating mobile video traffic growth, which doubled according to some surveys during 2012 and is likely to accelerate as a result of 4G/LTE deployment.
4G brings improved spectral efficiency but does not increase the bandwidth available, so it will still rely on spectrum reuse by creating smaller cells to support the anticipated mobile video traffic growth. This, in turn, will require increased fixed network capacity to feed this increasing dense cell network, which is what EE is warning about. EE itself would address the issue by building its own mobile video ecosystem, but hinted that this could not be achieved without outside developments, citing two in particular.
One was separation of video traffic from the rest of the data so that it can be handled independently and accorded an appropriate level of QoS (Quality of Service). This might well involve mobile broadcast for popular content to avoid overloading the network with multiple unicast streams delivering the same content at offset times to multiple user handsets.
Second, EE is betting on the emergence of CDN federations between operators as a way of providing the required fixed network infrastructure dedicated to video. This was interesting in that some operators are looking at offloading data via WiFi to existing broadband ISP networks, which then begs the question of who pays to carry the extra traffic. EE’s idea of using dedicated federated CDNs would address that issue, since the services generating the data would also pay for its transmission over all parts of the end to end path. There is no reason of course why such a solution involving federated CDNs would not make use of WiFi for the offloading to complement 4G, but from a business point of view it is most attractive to operators that have substantial WiFi hotspot coverage.
That is the case for BT in the UK, one of the five successful bidders for 4G spectrum after some years out in the wilderness as far as cellular is concerned, having been confined to fixed line broadband and WiFi. But now, BT believes it is well placed to compete in the emerging UK mobile video and TV market by combining its 4G and WiFi hot spot coverage.
Meanwhile it is also selling WiFi hot spot access to other cellular operators, including EE, whose subscribers can access the BT network via an app. Whether BT will want to continue doing this now that it is back in cellular remains to be seen, and it is possible the regulator may have something to say about this in future. Meanwhile though, as EE has pointed out, the heat is on to shore up the back end infrastructure to serve 4G.
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