Thursday, December 30, 2010

Breaking down 4G vs. 3G cellular networks

What is 4G?

With Sprint and Verizon Wireless launching fourth-generation high-speed networks in the Denver area this month, the term has dominated cellphone marketing recently and will continue to do so next year, when Apple is expected to release a 4G-capable iPhone.

The differences between 4G and predecessor 3G, which surfaced commercially nearly a decade ago, are fairly substantial. Sprint and network partner Clearwire have both generations of wireless technology atop a luxury high-rise near Washington Park in Denver.

The 3G cell site is the equivalent of an 8-foot- high storage cabinet filled with computer equipment. The 4G site is about half the size and consumes about five times less power.

3G networks

Clearwire operations manager Mark Severseike displays a 4G cell, with a much bulkier 3G cell in the background. Clearwire is majority-owned by Sprint. (John Prieto, The Denver Post)

carry voice and Internet traffic. 4G networks are built specifically for Internet content, so cell sites don't include equipment to route phone calls, reducing their footprint and creating energy efficiencies. That also positions 4G networks to better handle high-bandwidth activities.

"These are really key differentiators in the next generation of wireless networks," said Mark Loarie, director of technical operations in the Rockies for Clearwire.

Sprint is the majority owner of Clearwire, which is building the WiMax network that Sprint uses for its mobile broadband service.

When a user makes a call with Sprint's 4G cellphones, that traffic travels through 3G cell sites. The device uses 4G connections for Web browsing, video streaming and other Internet-related services. Clearwire has nearly 200 4G sites along the Front Range.

Of course, the most significant difference between 4G and 3G for consumers is speed. Sprint 4G offers Internet download speeds that are up to 10 times faster than 3G service, generally ranging from 3 megabits per second to 6 Mbps. Speeds can reach 12 Mbps, comparable to standard residential broadband service, depending on network congestion and how far a user is from a 4G cell site.

There are also differences between 4G technologies. Verizon's Long Term Evolution 4G service has faster average download speeds, advertised at 5 Mbps to 12 Mbps, and uses spectrum that can better penetrate buildings. Sprint and Clearwire's WiMax service uses a frequency with more capacity, allowing them to offer unlimited data plans.

Until recently, Sprint's and Verizon's networks didn't officially qualify for 4G classification, previously reserved for technology not yet commercially available.

But the International Telecommunication Union, which handles such designations for the industry, said this month that WiMax and LTE could both be recognized as 4G. The agency also said upgraded 3G networks could use the designation.

Why 3G rollout is tough??

Will 2011 turn out to be a revolutionary new year for India's half a billion mobile subscribers? While telecom companies are already hyping the brave new world of 3G services, standards of basic telephony services continue to languish in the basement.

The nine leading telecom operators, including state-run BSNL and MTNL, who had burned their pockets to pay Rs 67,718.95 crore to acquire 3G spectrum, much to their dismay, are finding it difficult to sell-off these airwaves to those telecom operators or companies who had not bid for it.

 Teething troubles

    Paid heavily to buy 3G airwaves to free-up decongestion for voice calls

  • Fear losing customers once MNP is rolled-out

The nine leading operators, including BSNL &

  • MTNL paid Rs 67,718.95 cr to acquire 3G spectrum

  • But they are yet to find any potential client for selling-off 3G airwaves

  • Heads of both had written to telecom minister for refunds of licence fee

Operators are wary of tariffs prior to launch of 3G, which makes their confusion apparent about fate of 3G

    Less than 20% of population uses services beyond voice calls

  • India has the lowest mobile tariffs, with average usage of Rs 130/mo

The worries for these operators have compounded further as they have invested another whopping Rs 20,000 crore and more to develop the 3G infrastructure, which they expect to roll out by early next year. "3G is not successful. The operators paid too much to buy the 3G airwaves to freeup congestion in voice calls. They also feared losing customers once the mobile number portability (MNP) is rolled-out.

Most of the newcomers have ample spectrum and they don't anticipate 3G requirement," said an industry expert. Despite the fact that state-run telecom operators BSNL and MTNL were given 3G airwaves two years back - private operators have got it in October this year - they have not been able to do much with their first-mover advantage in 3G. Both are now in the process of outsourcing their 3G networks.

But both MTNL as well as BSNL are yet to find any potential client for selling-off 3G airwaves. Heads of both the state-run BSNL and MTNL had written to the telecom minister for refund of licence fee paid for 3G and BWA spectrum.

However, operators like Bharti Airtel, who already have 3G services in many circles are in talks with operators who have got 3G for roaming pacts for ensuring a pan-India footprint. There have been speculations that Bharti could enter into strategic alliance with Idea and Vodafone for pan India 3G rollout. But other operators who do not have 3G airwaves have largely ignored the need for it in the near future.

For instance, Sistema Shyam TeleServices Ltd (SSTL), a joint venture (JV) between Sistema of Russia and the Shyam Group of India, which operates CDMA mobile services under the brand name MTS has already clarified that it does not need 3G services and that it has enough bandwidth to support faster data services and jam-free voice network. "We have adequate spectrum and we don't anticipate its need," said a top SSTL official.

Then there are worries whether the bruising tariff war currently on in 2G will continue into 3G. When Tata DoCoMo launched 3G services at 0.66 paise per second. Bharti Airtel said it had paid heavily for 3G spectrum and cannot afford a tariff war. Tata DoCoMo is keen on subscribing to 3G network to stay afloat in the Indian market. It does not have even start-up spectrum in certain circles.

Moreover, the industry experts have a view that 3G services will hardly matter for large number of subscribers. "I don't think 3G will make much of difference to most of the subscribers. We hardly have less than 20 per cent of them who use services beyond voice calls.

Over half of the subscribers are those who use nonvoice services," said Col S. N. Aggarwal, consumer activist and telecom expert. "3G is hyped. We have already told Trai (Telecom Regulatory Authority of India)that consumers first need to get better services rather than 3G services. We continue to get spam calls. There is no check on operators and telemarketers. The Trai, as a regulator, has become toothless. We need better regulations to govern the sector effectively," points out Randhir Verma, a telecom expert.

According to Rajan Mathews, the director general of Cellular Operators Association of India (COAI), the launch of 3G services will provide new valueadded service applications and also change the way we communicate. 3G would facilitate a new range of services, including high-speed data downloads and enable applications like Internet TV, video-on-demand, audio-video calls and highspeed data exchange.

India's telecom tele-density is 62.51 per cent, with 706.69 million phone connections, of which 1.9 crore new subscribers were added during October. India has the lowest mobile tariffs, with average usage of Rs 130 per month.

Airtel increases mobile internet charges

Airtel, the market leader in mobile space, has announced an increase in mobile internet browsing charges on its mobile office service.

Airtel has more than doubled the charges from 30p/50 KB to 30p/20 KB. However, if you have taken a package you are less likely to be affected. For instance, if you are paying a fixed charge of Rs 98 for 2GB data access, you are unlikely to see any change in your bill.

On the other hand, Airtel's Live WAP portal, which was free of charge till now, will be charged at the rate of 30p/20 KB with effect from December 28, 2010.

Whether other operators will follow suit is yet to be seen. Since it is a move that has been made to check excessive load on the network, there is a possibility that operators whose networks are not very busy will not hike prices.

Another possible reason could be to push people to take up fixed monthly plans for internet access, thereby securing a minimum revenue per user for the operator.

As per an Internet and Mobile Association of India (IAMAI) report, there was 104 per cent increase in users of mobile internet in 2009 as compared to 2008. As the trend is going to get stronger, moves like these might hamper it. In heavily competitive markets like India, such moves might not be feasible.