Broadband Wireless Communications Business

Broadband Wireless Communications Business

Broadband Wireless Communications Business An Introduction to the Costs and Benefits of New Technologies Riaz Esmailzadeh IPMobile Inc., Japan

Copyright 2006 John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England Telephone (+44) 1243 779777 Email (for orders and customer service enquiries): cs-books@wiley.co.uk Visit our Home Page on www.wiley.com All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP, UK, without the permission in writing of the Publisher. Requests to the Publisher should be addressed to the Permissions Department, John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England, or emailed to permreq@wiley.co.uk, or faxed to (+44) 1243 770620. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The Publisher is not associated with any product or vendor mentioned in this book. All trademarks referred to in the text of this publication are the property of their respective owners. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the Publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Other Wiley Editorial Offices John Wiley & Sons Inc., 111 River Street, Hoboken, NJ 07030, USA Jossey-Bass, 989 Market Street, San Francisco, CA 94103-1741, USA Wiley-VCH Verlag GmbH, Boschstr. 12, D-69469 Weinheim, Germany John Wiley & Sons Australia Ltd, 42 McDougall Street, Milton, Queensland 4064, Australia John Wiley & Sons (Asia) Pte Ltd, 2 Clementi Loop #02-01, Jin Xing Distripark, Singapore 129809 John Wiley & Sons Canada Ltd, 22 Worcester Road, Etobicoke, Ontario, Canada M9W 1L1 Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data Esmailzadeh, Riaz. Broadband wireless communications business : an introduction to the costs and benefits of new technologies / Riaz Esmailzadeh. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-470-01311-3 ISBN-10: 0-470-01311-7 1. Information technology Economic aspects. 2. Telecommunication Economic aspects. 3. Broadband communication systems. 4. Wireless communication systems. I. Title. HC79.155.E84 2006 384.3 dc22 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN-13 978-0-470-01311-3 (HB) ISBN-10 0-470-01311-7 (HB) 2005056960 Typeset in 10/12pt Times by Laserwords Private Limited, Chennai, India. Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire. This book is printed on acid-free paper responsibly manufactured from sustainable forestry in which at least two trees are planted for each one used for paper production.

To Izumi, Amin Asad, and Kian

Contents List of Figures List of Tables Preface Acknowledgements xiii xvii xxi xxv 1 Background 1 1.1 Fixed-line Data Communications....................... 3 1.2 Mobile Communications............................ 4 1.3 Wireless Data Communications........................ 7 1.4 Broadband Wireless.............................. 10 1.4.1 Edholm s Law............................. 10 1.5 Duplex Modes................................. 12 1.6 Voice to Data.................................. 14 1.6.1 Voice-over internet protocol...................... 14 1.7 Traffic Profiles................................. 15 1.8 Access Technologies.............................. 16 1.8.1 Frequency division multiple access.................. 16 1.8.2 Time division multiple access.................... 17 1.8.3 Code division multiple access.................... 17 1.8.4 Channel sense multiple access..................... 19 1.9 Telecommunications Operator Business.................... 21 1.9.1 From pipe to content provider..................... 22 1.9.2 Flat rate................................. 22 Further Reading.................................... 23 2 Wireless Communications 25 2.1 Signal Fading................................. 25 2.1.1 Why fading?.............................. 26 2.2 Modulation................................... 30 2.2.1 Signal constellation.......................... 30 2.3 Equalisation................................... 32 2.3.1 Time domain equalisation....................... 33

viii CONTENTS 2.3.2 Frequency domain equalisation.................... 33 2.3.3 Code/multi-user domain equalisation................. 34 2.4 Single Carrier and Multi Carrier........................ 35 2.4.1 Spread spectrum............................ 35 2.4.2 Orthogonal frequency division multiplexing............. 36 2.4.3 Orthogonal frequency-code division multiplexing.......... 37 2.4.4 Transmission power fluctuation.................... 38 2.5 Diversity Reception............................... 38 2.5.1 Diversity combining methods..................... 40 2.5.2 Selection combining.......................... 41 2.5.3 Maximum ratio combining....................... 42 2.6 Channel Coding................................. 42 2.6.1 Turbo codes.............................. 43 2.6.2 LDPC codes.............................. 43 2.6.3 Coding rate............................... 43 2.7 From Circuit Switched to Packet Switched.................. 44 2.7.1 Shared channels............................ 45 2.7.2 Packet scheduling........................... 47 2.7.3 Header compression.......................... 47 2.7.4 Wireless VoIP............................. 47 2.7.5 Quality of service........................... 48 2.8 System Capacity................................ 48 2.8.1 Shannon theorem............................ 49 2.8.2 Trunking efficiency........................... 49 2.9 Coverage.................................... 51 2.9.1 Link budget............................... 52 2.9.2 Multi-hop................................ 52 Further Reading.................................... 54 3 Enhancing Technologies 57 3.1 Frequency Reuse................................ 57 3.1.1 Noise limited.............................. 59 3.1.2 Interference limited........................... 59 3.2 Capacity Limit................................. 59 3.2.1 Capacity in the presence of interference............... 60 3.3 Signal and Interference............................. 61 3.3.1 Downlink................................ 61 3.3.2 Uplink................................. 62 3.4 Advanced Antennas............................... 63 3.4.1 Directional antennas.......................... 63 3.4.2 Adaptive array antennas........................ 64 3.5 Coverage Extension............................... 66 3.5.1 Coverage extension using adaptive array antennas.......... 68 3.6 Interference Reduction............................. 68 3.6.1 Interference cancellation........................ 69 3.6.2 Joint detection............................. 70

CONTENTS 3.6.3 Interference avoidance......................... 71 3.7 Hybrid ARQ.................................. 72 3.7.1 Chase combining............................ 73 3.7.2 Incremental redundancy........................ 73 3.8 MIMO Antennas................................ 74 3.9 Voice Coding.................................. 75 Further Reading.................................... 77 4 Cellular Topologies 79 4.1 Cell Structure.................................. 81 4.1.1 Macro-cell............................... 81 4.1.2 Micro-cell................................ 83 4.1.3 Pico-cell................................ 85 4.1.4 Umbrella structure........................... 85 4.1.5 Repeaters................................ 85 4.1.6 Distributed antenna systems...................... 86 4.2 Wireless LAN Cellular Structure........................ 86 4.3 Distributed Base Stations............................ 87 4.3.1 Uplink distributed base stations.................... 88 4.3.2 Downlink distributed base stations.................. 88 4.3.3 Public-private multi-hop........................ 90 4.4 Mini-cell Structure............................... 90 4.5 Handover.................................... 92 4.6 Ad hoc Networking............................... 94 Further Reading.................................... 96 5 Cost of Spectrum 97 5.1 Voice Systems.................................. 99 5.1.1 FDMA systems............................. 99 5.1.2 TDMA systems............................. 100 5.1.3 CDMA systems............................ 101 5.2 Data Systems.................................. 101 5.2.1 Peak throughput............................ 103 5.2.2 Average throughput.......................... 103 5.2.3 Minimum throughput.......................... 104 5.3 Data Throughput Efficiency.......................... 104 5.3.1 WCDMA HSDPA........................... 104 5.3.2 WCDMA uplink............................ 107 5.3.3 TD-CDMA HSDPA.......................... 107 5.3.4 WiMAX................................ 108 5.3.5 DoCoMo test system.......................... 112 5.3.6 Wireless LAN throughput....................... 113 5.4 Spectrum Cost................................. 114 5.4.1 Cost per subscriber........................... 114 Further Reading.................................... 115 ix

x CONTENTS 6 Cost of Equipment 117 6.1 Base Station Structure............................. 119 6.1.1 RF module............................... 120 6.1.2 Baseband module............................ 125 6.1.3 Transport module............................ 126 6.1.4 Control software............................ 126 6.1.5 Clock and power supply module................... 127 6.1.6 Device volume............................. 127 6.1.7 Repeaters................................ 127 6.1.8 Base station supply chain....................... 128 6.2 IEEE 802.11 Wireless LAN Access Point................... 130 6.3 Network Nodes Costs.............................. 132 6.3.1 Radio network controller........................ 132 6.3.2 SGSN and GGSN........................... 133 6.3.3 HLR.................................. 133 6.3.4 Total costs............................... 133 6.4 End-user Equipment.............................. 134 6.4.1 RF module............................... 135 6.4.2 Antennas................................ 136 6.4.3 Baseband module............................ 136 6.4.4 Control software............................ 136 6.4.5 Clock and power supply module................... 136 6.4.6 Peripherals............................... 137 6.4.7 Total costs............................... 137 6.4.8 Device volume............................. 137 Further Reading.................................... 139 7 Network Design and Operation 141 7.1 Network Design and Planning......................... 141 7.1.1 Stages in network design....................... 142 7.1.2 Technologies for increasing capacity................. 144 7.2 Site Cost.................................... 147 7.2.1 Rooftops and towers.......................... 147 7.2.2 Micro/pico base station sites...................... 148 7.2.3 Installation............................... 148 7.2.4 Tuning................................. 148 7.2.5 Maintenance.............................. 148 7.3 Backbone Fixed Connection.......................... 149 7.3.1 Physical connections.......................... 149 7.4 Networking Based on Access Points...................... 150 7.4.1 Access points and antennas...................... 150 7.4.2 Maintenance.............................. 151 7.4.3 Fixed network connection....................... 151 7.5 Customer Costs................................. 151 7.5.1 Customer acquisition.......................... 151 7.5.2 Customer service and billing..................... 153

CONTENTS 7.6 Other Operating Costs............................. 153 7.6.1 Power consumption.......................... 153 7.6.2 Spectrum fees............................. 153 7.6.3 Human resources............................ 154 7.7 Wholesale Operators Network-less Operators................ 154 Further Reading.................................... 155 8 Services 157 8.1 Revenue Flow.................................. 159 8.2 Value Chain................................... 160 8.2.1 Nonportal content aggregations and creators............. 161 8.2.2 Nonportal application platforms.................... 161 8.2.3 Portal content aggregations...................... 161 8.2.4 Third party billing........................... 161 8.2.5 Portal access.............................. 161 8.2.6 End-user billing............................ 162 8.2.7 IP network access........................... 162 8.2.8 Mobile network access......................... 162 8.3 Service Classifications............................. 162 8.3.1 Mobile internet access......................... 164 8.3.2 Mobile intranet/extranet access.................... 164 8.3.3 Customised infotainment........................ 167 8.3.4 Multimedia messaging service (MMS)................ 167 8.3.5 Location-based services........................ 169 8.3.6 Rich voice and simple voice...................... 171 8.4 Total Revenue Forecast............................. 173 8.4.1 Flat rate................................. 173 Further Reading.................................... 175 9 Scenarios 177 9.1 Technologies.................................. 178 9.1.1 WCDMA solution........................... 178 9.1.2 TD-CDMA solution.......................... 179 9.1.3 WiMAX solution............................ 179 9.1.4 WLAN solution............................ 179 9.2 Market Size................................... 180 9.2.1 Japanese market............................ 180 9.2.2 Chinese market............................. 182 9.3 Services and Revenues............................. 182 9.3.1 Simple voice.............................. 183 9.3.2 Rich voice............................... 184 9.3.3 Wireless DSL, urban.......................... 185 9.3.4 Wireless DSL, rural.......................... 185 9.3.5 Customised infotainment........................ 186 9.3.6 Mobile intranet/extranet........................ 186 9.3.7 Multimedia messaging service consumer.............. 187 xi

xii CONTENTS 9.3.8 Multimedia messaging service machine-to-machine........ 187 9.3.9 Location-based services........................ 188 9.4 Service Classification.............................. 189 9.4.1 Traffic per service........................... 191 9.4.2 Subscriber density and offered traffic................. 191 9.4.3 Subscriber numbers.......................... 193 9.5 Costs...................................... 193 9.5.1 Cost of spectrum............................ 193 9.5.2 Cost of equipment........................... 194 9.5.3 Operating costs............................. 197 9.6 Cash Flow Scenarios.............................. 199 9.6.1 Scenarios in Japan........................... 199 9.6.2 Scenarios in China........................... 204 Further Reading.................................... 208 Glossary 209 Index 219

List of Figures 1.1 Interfaces for access to the internet...................... 2 1.2 DSL rates versus distance. Reproduced by permission of DSL Forum... 4 1.3 Subscriber growth in Japan. Reproduced by permission of Japanese Ministry of Internal Affairs and Communications (MIC)................ 5 1.4 Three generations of mobile communications technologies.......... 6 1.5 ARPU trend in Japan. Reproduced by permission of Japanese Ministry of InternalAffairsandCommunications(MIC)... 8 1.6 Edholm s Law: fixed and wireless transmission rate trends. Reproduced by permission of IEEE Spectrum Magazine, July 2004............. 10 1.7 Possible spectrum for broadband wireless.................. 11 1.8 FDD and TDD modes............................. 12 1.9 Downlink/Uplink slot allocation in TD-CDMA standard: one frame is 10 ms and is divided into 15 slots that can be allocated to either downlink or uplink...................................... 13 1.10 Voice and data traffic. Reproduced by permission of IEEE.......... 14 1.11 Frequency division multiple access...................... 17 1.12 Time division multiple access......................... 18 1.13 Code division multiple access......................... 18 1.14 Wide-band spread signals and narrow-band desired signal after de-spreading 19 1.15 Channel sense multiple access......................... 20 2.1 A wireless communications system...................... 26 2.2 A flat fading pattern.............................. 26 2.3 Multi-path signal arrivals and their vector summation............ 27 2.4 Bit error rates (BER) in flat-fading and constant channels.......... 28 2.5 Frequency-selective fading in time and frequency domains. Reproduced by permission of Professor Fumiyuki Adachi................... 29 2.6 Delay spread.................................. 30 2.7 BPSK, QPSK, and 16-QAM modulation patterns in the in-phase (I) and quadrature (Q) constellation.......................... 31 2.8 Fading equalisation by power control..................... 32 2.9 Spreading and de-spreading.......................... 36 2.10 Orthogonal frequency division multiplexing.................. 37 2.11 OFDM symbol length and guard time in one implementation........ 37 2.12 Orthogonal frequency-code division multiplexing............... 38 2.13 Power amplifier characteristics......................... 39