As the days of EE – the new name for Orange and T-Mobile’s UK operations – 
enjoying a monopoly in the UK with its 4G cellular services draw to a close, there are clear signs that none of the competing 4G carriers – O2, Three and Vodafone – are sure of exactly how to price their own 4G services in the market.
Of the yet-to-launch 4G carriers, only Three has committed to not charging a premium for 4G services, but given the fact that the cellco is a minor – if rapidly growing – player in the UK cellco space, this is perhaps to be expected.
My best guess – and it is a guess – is that the trio of yet-to-launch 4G carriers will use hardware pricing of extracting maximum profit from their users, rather than surcharging users on subscription plans as EE’s strategy has been to date.
And, of course, the great unknown in the UK 4G race is BT, which also has a licence via its Niche Spectrum Ventures operation, although many experts predict that the carrier will follow the lead of some innovative US carriers and use 4G to deliver voice and high-speed broadband to rural subscribers, rather than relying on a copper infrastructure as previously.
So why the headlong rush into 4G?
Well, whilst there is an indication that the vast majority of cellular users will not pro-actively adopt 4G – that is, they will take a conscious decision to buy a 4G-enabled device and sell-off/hand-on their older smartphone or tablet – logic suggests the UK smartphone user base will mainly migrate up to the benefits of 4G when their contract comes up for renewal.
This is certainly the way things are shaping up in the US, where most of the carriers are now actively promoting 4G – aka LTE, short for Long Term Evolution – to customers in most city areas.
And given the fact that LTE is around four to five times more spectrally efficient than most 3G services, this is probably why the US carriers are extremely keen to promote 4G as the mobile medium of choice wherever possible.
According to a just-issued report from Pyramid Research, in fact, the number of LTE subscribers in the US is set to continue to increase markedly over the next few years – with the total number of LTE customers representing a hefty 70pc of mobile subscriptions by the time 2017 rolls around.
Pyramid’s report – entitled `USA: Operator Need for LTE Spectrum and Scale to Reshape Telecom Market through M&A – predicts that the number of LTE subscriptions in the US will reach the 262 million mark by the end of 2017.
According to 4G Americas, meanwhile, as of May 2013 there were 57 million LTE customers in the U.S. and Canada.
The number of LTE subscribers worldwide is rising rapidly too, and will continue to do so through the next several years, according to a January report from IHS iSuppli, which predicted that the number of LTE users worldwide will hit 198.1 million in 2013.
Over the next few years, in fact, the research firm says that LTE adoption is expected to surge to 1 billion users in 2016.
Interestingly, Pyramid’s report notes that, as carriers focus on selling LTE phones, the use of 3G networks will decline, with the adoption of 3G technologies in the US expected to peak at around 65pc of the mobile subscriber base.
That’s an interesting statistic, as it means that a sizeable slice of the remaining 35pc will have remained on 2G services, whilst a growing number will be moving on up to the benefits of 4G facilities.
4G, it appears, is an unstoppable force in the cellular stakes, as 4G Americas says that the number of LTE connections worldwide passed the 100m mark at the end of May this year, with the US and Canada snagging 57pc of this share, even though there are 172 operators in 70 countries with LTE networks – and more than 250 commercial LTE networks are expected to be operational by the end of this year.
4G from the carrier’s perspective
What’s interesting about this race for 4G – in the US and Canada at least – is the fact that T-Mobile USA (which has a joint venture with Orange in the UK with EE) has announced plans to install thousands of new LTE antennas to its base stations over the next 12 months, using a technology called 4X2 MIMO.
T-Mobile USA is in the technologically fortunate position of being the last of the major US cellcos to launch into the 4G/LTE arena and, thanks to this, will be using a smart antenna technology – 4×2 MIMO (Multiple Input-Multiple Output) – to enhance the signal path between the base station and the mobile.
LTE already transmits the same data signal over parallel paths from two antennas at the base station, which are then received by two antennas on the mobile. 4×2 MIMI, on the other hand, doubles the number of antennas at the base station end and effectively supports four different transmission paths.
This probably won’t appreciably increase the data throughput for those mobiles near to the base station, but it will dramatically increase the signal quality at the edges of the base station’s coverage area, allowing even fringe users to achieve closer to the theoretical 50 to 75 Mbps data speeds that LTE – in its present form – currently offers.
According to Nokia Siemens Networks, which has been working on the technology with T-Mobile USA, speed gains of up to 100pc on uplinks and 60pc on downlinks are possible on the edge of a base station’s coverage area.
The end result, says the company, is a significant boost in the real-world capacity of a given LTE base station, which can support more simultaneous connections, whilst making those connections a lot faster and more resilient against localised interference/signal problems.
T-Mobile USA is well placed to enjoy these benefits, as Nokia Siemens Networks says that an upgrade to 4×2 MIMO will simply require a software upgrade at the base station – and since 4X2 MIMO is already in the baseline LTE standard, most current generation 4G handsets will automatically support the system.
How will this translate to the UK?
The $64,000 question, of course, is how these developments will reshape the fledgling 4G/LTE service arena in the UK, and – once again – one can only make an intelligent guess based on previous cellco performance in what is a highly 
competitive marketplace.
According to a report from Juniper Research, most of the UK cellcos will seek to increase the volume of mobile data traffic to WiFi and small cell networks this year as they start to hit capacity issues on their backhaul networks in city areas at peak times.
That’s a lot of data – Juniper notes that it is the equivalent of 10 billion movie downloads or 9,000 petabytes (PB) per year being offloaded from mobile operator’s networks.
The report – `Mobile Data Offload & Onload: Wi-Fi, Small Cell & Carrier-Grade Strategies 2012-2017′ by Nitin Bhas – says that, whilst cellcos are benefiting from much needed relief on their over-stretched networks, they are also potentially losing monetisation opportunities on the lost data usage.
This is why UK cellcos are actively partnering with existing WiFi networks and launching their own carrier grade WiFi solutions for business deployments.
In addition, says the report, 4G technologies in the shape of LTE will enable the operators to provide new services and next-generation connected devices such as smart glasses.
The report notes that, whilst a 4G connection need not necessarily mean more data usage, consumers are in fact adapting to faster speeds and more data services, which could lead to more data usage.
“This increase in user demand for services in turn creates new opportunities within different economic sectors including commerce, energy, health and education, completing a cycle of demand,” says the report.
This jump in WiFi will be driven, the report goes on to say, by a technology known as NGH (Next Generation Hotspot) and Hotspot 2.0, which will give mobile users access to seamless authentication and a hotspot hand-off access experience similar to that of cellular networks.
The foundation stones for Hotspot 2.0 – a development by the WiFi Alliance – is going to be a key feature of public access WiFi hotspots in the next 12 to 18 months.
In fact, according to according to David Stephenson – senior principal engineer with metro wireless broadband vendor Ruckus Wireless – Hotspot 2.0, aka extended 802.11u, offers pretty well the same facilities as cellular base stations.
At the moment, he says, when you power up a mobile device at a coffee shop, you are often overwhelmed by a choice of which WiFi hotspot to log into.
“Contrast that to the GSM network – in matter of minutes of landing at an airport or a strange place, you can make a call. Why couldn’t WiFi be the same? This is what Hotspot 2.0 is all about – making WiFi as secure and easy to use as cellular,” he says.
“What we needed was something different – the network tells the phone: here’s the credentials that I can authenticate with. 802.11u provides a way for the hotspot network to tell the phone which credentials it can use and the phone says, `oh, I have those credentials’,” he adds.
Stephenson says that the credentials manager element of Hotspot 2.0 is doing a number of things for the end user, including beaconing out to the phone that the hotspot is a Hotspot 2.0 network.
“It automatically authenticates the mobile to the network. The user does nothing – it’s the automatic part that is good for the user – it also allows the cellular network to offload traffic to WiFi. It’s certified inter-operability,” he notes.
Conclusions
It’s clear from the foregoing that 2013 is going to be a period of great change in the 4G marketplace – both from a carrier/topology point of view and from the consumer’s point of view.
These changes will translate into a rapidly changing array of 4G/wireless services, as well as the mobile devices that access them.
This also means that 2013 is NOT the time to be thinking of upgrading your smartphone, as the 2014 crop of handsets – and, more importantly, the services you can access with the device – will offer so much more.
And guess what? I upgraded my own Android handset in November of last year on a two-year contract with a UK carrier. Yes, I am kicking myself – if I knew then what I know now…
+SG