What is 4G

What is 4G?

4G is a term used by people to apply to a lot of different technologies. It stands for 4th generation of wireless cellular standards. The definition of 4G from the International Telecommunications Union (ITU-R) is the ability to deliver:

  • Up to 100Mbps in the downlink (from base station to mobile device) in high mobility conditions such as vehicle and trains
  • 1Gbps in the downlink (from base station to mobile device) in stationary or low mobility conditions such as walking

To give you a feel of what this means, if you are using fixed broadband at home using ADSL then you’re getting on average 5 – 8 Mbps. If you’re one of the lucky ones with cable then you’re probably getting closer to 20Mbps. So it’s quite a challenge to meet these speeds on a wireless system. By the way, regardless of the hype you hear wireless systems in a majority of cases will never be faster or cheaper than fixed systems in countries where there is extensive existing fixed line infrastructure – spectrum is a scarce resource and has to be shared where as fixed line capacity is more abundant and more easily able to offer the higher data rates.

None of the systems deployed today or to be deployed in the next two years meet the criteria for a true 4G system. However, the Long Term Evolution standard (LTE) at least meets the 100Mbps with LTE Advanced being planned to meet both criteria. Let’s just walk through what LTE is and some history on cellular technologies.

The operators around the world at the moment are operating a number of flavours of cellular technologies but by and the large the most popular standards are GSM and UMTS. GSM is a 2nd generation technology that was initially designed for voice but then modified to accommodate data. It’s still the most commonly deployed technology globally. UMTS is a 3rd generation technology that was designed to be backwardly compatible with the 2G GSM standard and allow a much higher data speed than 2G. They key thing is that it was designed for data as well as voice or so the theory goes. Basic UMTS offers speeds of up to 384kbps from the base station to the device (download speed) and up to 64kbps from the device to the base station (upload speed). The 3G UMTS standard was then beefed up with HSPA to provide faster data speeds. There are two parts to HSPA, HSDPA (high speed downlink packet access) and HSUPA (high speed uplink packet access). HSDPA allows in theory up to 14.4Mbps and HSUPA up to 5.76Mbps. There have been further evolutions of HSPA that allow HSDPA speeds of 84.4Mbps and HSDPA speeds of 23Mbps, though these haven’t been deployed at least on an significant level. In practise with basic HSPA most users don’t get more than 1Mbps and very few will see speeds 2Mbps or more, but this is adequate for most tasks such as email and browsing.

The new standard LTE in the strictest sense is more like 3.9G as it doesn’t quite meet the ITU-R’s definition above of 4G where a data rate of 1Gbps is required. Later variants of LTE called LTE-Advanced (yes I know the naming conventions show a lack of imagination 🙂 ) do achieve the 1Gbps requirement.

Without getting into the technical intricacies of the technology LTE gives the customer some real benefits. The two most important enhancements with LTE are higher speeds and lower latency. The benefits of higher speeds are obvious, but what’s less obvious is the latency benefit. Lower latency means that response times are much faster and things will feel snappier and you’re more likely to achieve the higher speeds as well. In theory LTE allows 100Mbps in the downlink and 50Mbps in the uplink, but in reality customers are unlikely to experience more than 5-10Mbps in the downlink and 1-5Mbps in the uplink if for no other reason than the need to share capacity amongst multiple users. At a push assuming enough spectrum is available to the operator a speed of 20Mbps might be feasible. LTE offers a definite improvement in speed and better customer experience. The table below summarises the different data speeds for each of the technologies discussed.


Data speed (uplink/downlink)











LTE Advanced


What’s going to be interesting is what anyone will do after LTE-A because we’re fast approaching some the theoretical limits of what radio systems, at least for cellular applications, can do with the current network topologies. To increase speeds further much smaller cells sizes (i.e the coverage radius from a single network transmitter mast) will be required and this is where microcell, picocell and femto technologies will see increased deployment if the economics work.

4G deployments globally

2010 saw the first LTE deployment though most of these were nothing more than early PR shouts intended to show the operator as being a “leader”. Operators who deployed LTE in 2010 were:

  • NTT DoCoMo in Japan
  • MetroPCS in nine USA cities
  • TeliaSonera in Denmark, Norway, Sweden and Finland
  • Verizon in 38 USA cities
  • Vodafone in Germany

Expect to see more deployments through 2011 with critical mass during 2012 and 2013. At the moment the devices that support LTE are quite limited and are mainly data modems and data devices. In many countries operators will need additional spectrum to deploy LTE.

Data limits

I’m also expecting that in the next 2-3 years timeframe more operators will have implemented traffic shaping/policing with some strict usage allowances. Traffic shaping means that operators can manage the load on their networks to try and reduce the peak-average traffic ratio. Shaping and policing will manage traffic more intelligently by giving some traffic types higher priority than others, for example email can be sent with a lower priority compared to web browsing because users won’t really notice it. This shouldn’t necessarily be viewed negatively if it helps operators keep data costs down for customers and its certainly not something that contravenes net neutrality as long as operators don’t bias against against similar types of traffic due to a commercial relationship with one or more of the traffic/content providers.

The other trend that’s emerged over the past 12 months has been the reduced number of “unlimited” data tariffs from operators. AT&T and Telefonica O2 have both introduced caps on the total Megabytes of data customers can have per month and it likely more operators will follow suit. The era of “unlimited” data is fast coming to an end. This won’t affect most users as they never exceed the caps, but a small minority of customers who consume a disproportionate amount of resources will certainly feel the pinch. Unlimited data bundles were introduced when the operators’ 3G networks were empty, but as demand and usage grew so these networks filled up. The challenge for most operators is that the investment for capacity to continue the rate of growth seen over the past 12-18months is unsustainable when one looks at the revenue that hasn’t grown as quickly as the total traffic. The operators have received a lot of negative publicity about being greedy over data charges but this isn’t the case. The revenues for operators have not kept up with the levels of traffic growth for data as they did for voice and this means that operators margins are declining steeply. This is a major challenge when one recognises networks are a capital intensive business. Building network capacity requires huge investment and if the revenue and profit isn’t there then there is no incentive or ability to invest.

One of the other things we can expect to see in the future is a tiering of the services provided similar to the model some fixed line ISPs have. The tiering could be based on:

  • Higher levels of quality of service the more you pay
  • High tier users getting priority for resources over lower tier users
  • QoS for real time services such as video

Operators need to think long and hard about how they manage data pricing going forward. Bill shock for data has to be avoided but knowing how much data you’ve consumed, even for technical people, is very difficult to gauge. It will be worthwhile for operators to invest in real time or near real time data usage dashboards for customers so that they can see how much data they’ve consumed at any given point in time. It’s a challenge having real time data metrics, but I believe its an investment worth considering. There’s an interesting article on the topic that can be found at http://www.telecoms.com/24006/keeping-it-real-time/.

4G the operator saviour?

There is an expectation amongst some operators they’ll be able to charge a premium for LTE, but in my opinion I don’t think this is likely. I heard the same thing when 3G was introduced, but I acknowledge the difference now is that demand for data has been established whereas back in 2003 mobile data was non-existent. I’m not convinced there are enough people with enough disposable income who value mobile data enough to want to pay more for LTE services than their paying for 3G services today. Verizon’s 4G pricing on its website is comparable to the 3G services it offers and this has probably set the price point for the USA market. People do indeed value mobility but there is a limit to what they’ll pay or can afford for that privilege. Conversely operators can’t significantly reduce prices for LTE more than 3G services because large components of their cost base are fixed regardless of the improvement in capacity LTE provides. Yes LTE provides more capacity but it doesn’t offset the site rents, transmission backhaul and other fixed costs, at least not with the deployment models employed today. I hate to say it but I think LTE is a necessary investment just to keep up with the competition in the market. Most markets will see at least one operator who’ll price LTE data comparable to 3G UMTS data and once that happens it becomes difficult for the other operators in that market to charge a premium for LTE.

However, the biggest challenge for operators remains as to whether its profitable enough just being a data pipe given the sorts of margins operators have been used to until now. Most operator initiatives for value added services that run over their pipes have had limited, if any, success at all, at least to date. But that’s another conversation for another post. As Booz&co stated in a 2011 Telecommunications perspective:

“The winners in the race for growth will be the operators that can successfully
manage the five ingredients of innovation: a consistent ideation process; the
ability to consistently nurture new ideas at every stage in the innovation life
cycle; a culture of innovation; fresh talent from outside the telecom industry; and
an entrepreneurial leadership style that brings all of these elements together


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