Will the Real 3G Please Stand Up?

It's being pitched as turbo-charged 3G, but the poorly-kept secret among industry insiders is that the upcoming implementation of the High-Speed Downlink Packet Access (HSDPA) radio interface in Wideband CDMA (WCDMA) networks is really "3G as it should have been."

But just how much throughput HSDPA will deliver to the end-user, and exactly how it will impact mobile network economics, is still not crystal clear, according to the latest Unstrung Insider report, Turbo 3G: High-Speed Packet Access Arrives.

As an evolutionary step, HSDPA is expected to deliver significantly greater capacity per 5MHz radio carrier than existing 3G radio access systems, for relatively little extra capital investment. This lower cost of capacity is set to encourage mobile operators to redefine their addressable markets by targeting services such as mobile broadband and blended voice/data services.

Vodafone Group plc (NYSE: VOD) is a prime example. Chief executive Arun Sarin explicitly singled out personal broadband services as a source of revenue growth at the formal launch of the group's HSDPA strategy in September 2005, saying: "We will become cross-elastic and cost-competitive with DSL."

Ultimately, however, any redefinition of the mobile services business model depends on the real-world performance of HSDPA systems, which will, in turn, depend on a complex interplay between technical specifications, user-terminal capabilities, vendor implementation, and operator deployment decisions.

In simple terms, HSDPA works by concatenating dedicated per-user bearers into a single logical channel shared between users. Users are granted access to the channel on a time-multiplexing and code-multiplexing basis. The 3rd Generation Partnership Project (3GPP) specs also call for an evolution of HSDPA based on various "categories," each with different performance requirements, and later through the introduction High-Speed Uplink Packet Access (HSUPA).

In its first commercial release – a.k.a. Category 12 – HSDPA is expected to deliver roughly four times the performance of today's WCDMA networks at equivalent points in the cell. For example, where a user receives 100 kbit/s today (typically at the edge of the cell), that could potentially increase to around 300 kbit/s to 400 kbit/s with HSDPA; and where a user receives 300 kbit/s today (typically towards the center of the cell), HSDPA could increase this to burst rates in the range of 1 Mbit/s, assuming "average" Internet use (browsing, etc.) and up to 25 users per cell.

But it starts to get complicated from here on out, as 16-QAM modulation, higher-order coding schemes, and advanced antenna technology are specified in the standards, pushing raw Layer 1 throughput up to 3.6 Mbit/s (a.k.a. Category 5/6) and, eventually, to 7.2 Mbit/s (a.k.a. Category 7/8).

This evolution of HSDPA performance is primarily linked to the availability of user-terminal chipsets and the integration of advanced receiver technology. However, real-world data rates will also be determined by the complex interaction of user terminals and the Fast Link Adaptation features of HSDPA (controlled by the scheduling algorithm in the base station).

As a result, vendors and operators are looking at how best to accelerate the evolution and considering options that include:

• Moving directly to 3.6-Mbit/s terminals (and skipping the 1.2-Mbit/s QPSK-only terminals);
• Pushing features, such as advanced receivers, specified for Category 7/8 (7.2 Mbit/s) into chipsets designed for the slower 3.6-Mbit/s devices; or
• Moving directly from the early 1.2-Mbit/s terminals to the faster 7.2-Mbit/s devices.

The primary intent is not to deliver the highest possible peak data rates, but rather to raise the overall performance level consistently across the cell and maximize the number of users able to receive a "good enough" service. Such a strategy is likely to prove far more economically powerful than focusing on a few high-paying, high-end customers, argues the Insider report.

For this reason, operators, if not vendors, are working hard to rein in consumers' performance expectations for HSDPA, with talk of the mythical 14 Mbit/s (the theoretical top-end performance) now banished to vendor marketing departments.

— Gabriel Brown, Chief Analyst, Unstrung Insider

The report, Turbo 3G: High-Speed Packet Access Arrives, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.