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Thursday, June 29, 2006

Spectral Efficiency

If your most expensive and scarce resource is spectrum, then it makes economic sense to use it in an efficient manner and to keep seeking for even more efficient uses of the spectrum.

The brainiacs at Ericsson recently revealed to the world their view on what was coming out of the labs in the medium to long term.


The first shocker for the VOIP industry is that currently a VOIP call uses 5x the capacity of a circuit switched call on a 3G R99 network. In other words, the only way to get VOIP to be attractive to the price conscious public is if the MNOs incorrectly cost data and circuit switched bits and bytes.

The second shocker this time for the MNOs is the need to convert their networks quickly to all- IP, because in R7 of the 3GPP standards (ie the HSDPA release) VOIP is 40% more efficient than Circuit Switched calls (and probably a lot more efficient to manage once the initial learning curve has been overcome). In other words, there is a real benefit in the cut-throat pricing game and being earlier to convert to an all-IP network. This reinforces the comments made by Thomas Geitner in a recent Vodafone presentation.

Ericsson Evolution

Ericsson also showed their normal slide showing a regular and impressive upgrade cycle for all the operators and therefore calming their investors fears about future revenue. It was an investor day after all. I would advise taking the dates with a pinch of salt as the only regulate thing in cellular technology upgrades is that they are late.

Ericsson Access

They finished off with a nice slide showing the comparison of various access technologies. The important part missing in the slide is that mobile spectrum is shared amongst users in a cell and the bandwidth is limited by the amount of spectrum available.

It is noticeable that the LTE development time-frames fit in quite nicely with the “digital dividend” coming about in the UK because of the turning off of the Analogue TV. If I was the UK government and short of a few bob, I’d be scheming away at developing an auction for this spectrum to fit in with the bubble surrounding the forthcoming hype of LTE technology or 4G technology as it will be referred to in the press.