WiMAX has been scarcely more welcome in the GSM/UMTS community’s annual mega-gathering, 3GSM in Spain, than Qualcomm in its CDMA-only days. But this year, the 802.16 platform took a commanding position, with most of the major sponsors of the event now embracing it alongside their more traditional wares. Despite the name of the show, this served to reinforce the truth that most operators will need more than one technology to deliver full mobile broadband and internet services, and that the future will be one dominated by integration, software defined networks and all-IP – a fact helping to drive vendor consolidation.
Even the once religious Qualcomm talked about multiple technology roll-outs, while not quite going so far as to endorse WiMAX. ‘4G is a political term – it’s really about heterogeneous systems and how to get bits through the network at least cost,” said CEO Paul Jacobs, in a comment that could have summed up the entire event, and the challenge facing the increasingly pressurized equipment vendors.
For soon-to-be married Nokia Siemens, the challenge is particularly daunting – having to merge their operations and cultures with minimum disruption to the current business, while branching out from the GSM heritage to embrace multiple networks and convergence. The company offered some insights into how it expects to do this, once its merger is completed, and the rising noise about WiMAX in the background made it particularly urgent that the venture should have a convincing story in 3G-plus and OFDM, not just in GSM/UMTS.
If Qualcomm failed to soften its hostile stance on WiMAX, at least for now, another giant with huge investment in keeping 802.16 out of the fold gave the technology the biggest credibility boost of all, by acknowledging its fear of WiMAX. This was Vodafone, whose CEO Arun Sarin used his keynote address to lambaste operators for not working hard enough to counter the threat from WiMAX – a threat the company has not previously recognized, in public at least, sticking resolutely to its argument that HSPA would be all a cellco needed to stay ahead of new challenges.
Now, Sarin, who more than most CEOs has suffered the fall-out from over-investment in 3G, is calling on fellow operators to work together more efficiently and work more quickly on LTE to counter faster than anticipated adoption of WiMAX around the world – a move that will, in many cases, allow new competitors to the 3G cellcos into the market.
“The GSMA needs to influence the ecosystem. LTE is still at the standards stage, while WiMAX is a commercial reality,” said Sarin, even though he stressed that WiMAX – “the elephant in the room” – is still some way off being “prime time.” He said that LTE remained a better option for Vodafone than WiMAX because of its backwards compatibility with current technologies, but added the threat that, if LTE evolution did not speed up, Vodafone would be forced into considering the OFDM technology (something that is almost inevitable anyway, as the cellco giant moves into untapped territories where 3G spectrum may not even have yet been allocated).
In response to Sarin’s comments, GSM Association chairman Craig Ehrlich said: “I would take issue that WiMAX is the elephant in the room. You could have said that about CDMA – which is great technology – but now you could argue that it has become niche. As an organization we have no position on it. We accept that some of our member operators will adopt it. But we’re gearing up on our own mobile broadband evolution path.”
Brave words from the GSMA, but it was not just Vodafone pointing out the weaknesses in the UMTS/LTE story. While many vendors have defocused on UMTS and are turning their attentions to WiMAX and LTE, even those that have succeeded in creating a decent business in 3G are critical. “3G hasn’t lived up to the expectations of operators, vendors and, frankly, consumers,” said Simon Beresford-Wylie, CEO-designate of the planned Nokia Siemens joint venture in his keynote address. Expectations have been scaled back to the point where many mobile operators now view 3G as a way to boost their voice capacity, rather than deliver high value multimedia services. Heads of rival vendors, such as Mike Zafirovski at Nortel and Alcatel Lucent CEO Patricia Russo, also said that 3G networks are not fast enough for PC-class internet browsing or advanced multimedia.
“There’s no such thing as mobile internet. It’s the internet. The phone is just an enabler,” Beresford-Wylie said, throwing cold water on the hopes that there could be a significant premium for mobile web applications – while at the same time indicating that mobile systems need to step up to the mark, since consumers will expect the same internet experience on all devices.
Most vendors, with the exception of Ericsson, are eyeing multiple networks and seeking to exploit the similarities between 802.16e and LTE – and even, for CDMA specialists like Lucent and Nortel, Ultra Mobile Broadband – to reuse R&D and create a universal platform that can be tweaked for any of the three OFDM/MIMO-based platforms, according to operator demands. This will place the competitive burden on software, services, customer relationships, pricing and politics, rather than on choice of air interface or specific technology differentiation.
Beresford-Wylie again set the tone, saying Nokia Siemens (despite yet more Siemens corruption allegations, the joint venture should be created before the end of March) would “focus on opportunities in mobility and broadband” and would not restrict itself by swearing allegiance to any specific technological “religion”. Instead, it would support a range of technologies including GSM, W-CDMA and WiMAX, he said, adding: “We need to lose the religion” and concentrate on open standards.
The words of Beresford-Wylie could have been echoed by nearly all the vendors – and the giant exception, Ericsson, is now facing real question marks about whether its HSPA-only strategy will hold it back in the shift to OFDM/MIMO networks with multiple air interfaces supported, leaving it in a technological ghetto where it is over-dependent on its own chosen platforms taking pole position rather than being part of a patchwork.
Of course, along with convergence and OFDM, the common theme uniting most of the major vendors is consolidation, with all the big six digesting major mergers (or, in Nokia Siemens’ case, striking the difficult balance of talking up their joint venture, and showing off its new logo and roadmap, before the transaction is actually finalized, without upsetting regulators and shareholders. Despite widening investigations into the Siemens corruption affair, with rumors last week that it may be linked to another alleged scandal involving the Russian telecoms minister, the partners insist their marriage will be consummated before the end of the current quarter, three months later than originally anticipated).
As well as stressing the economies of scale that the joint venture would bring, putting it second only to Ericsson in network infrastructure sales volumes, the Nokia and Siemens executives also unveiled some of their product strategies, which aim to eliminate duplication, play to what they see as complementary strengths, and create a unified platform that will support all the emerging candidates for 3G-plus systems. In this latter aim, shared with most of their rivals, Nokia was less focused on talking about pooling R&D and creating a futuristic OFDM/MIMO foundation, and more keen to discuss its actually available solution to multiple network demands, the Flexi Base Station. This product is proving a breakthrough one for Nokia Networks, promising a leapfrog towards flat networks and easy integration of different technologies, and it is no surprise that it will be a cornerstone of the joint venture’s combined line-up. It consists of a modular box that houses anything from UMTS to WiMAX kit and will be the central architecture of Nokia Siemens. Ari Lehtoranta, Nokia’s general manager of radio networks, said the Flexi will serve as the architectural platform on which all new products will be built, with the initial focus on the partners’ GSM/UMTS heartland but with rapid progress into WiMAX and LTE. But he stressed that the technology going into the platform will come from both companies.
Immediately post-merger, all new UMTS sales will be of Nokia Node B systems, but the Finnish vendor was keen to dilute the impression that it will have the firm upper hand in this marriage, emphasizing that the venture will rapidly develop a next generation base station incorporating R&D from both companies, and also from Siemens’ Asian JV partner NEC. This project will be the eventual platform for LTE kit, Lehtoranta said, and Nokia Siemens will also support Siemens’ current UMTS deployments and offer upgrades to HSxPA. Both vendors’ GSM lines will be continued as they believe, with most R&D costs expended, it would be more expensive to create a unified line than to support two. The company, however, will develop a single radio network controller that will support both base station types.
In WiMAX, Nokia’s mobile WiMAX solution will be retained, and Siemens’ fixed WiMAX kit, which already has some customers. The companies plan to develop a single IMS architecture, though on switches they will stick to their strengths, using Nokia’s Release 4 next generation switch and Siemens’ multi-access wireline switch. A possibility for future R&D will be a converged wired/wireless switch but there are no details released as yet.