Examining the upstarts hoping to break into the LTE base station market dominated by the big four RAN equipment vendors

February 9, 2009

5 Min Read
LTE Base Station Challengers

My last Heavy Lifting Analyst Note provided a summary of the Long Term Evolution (LTE) base station (eNodeB) product strategies of the four leading wireless equipment suppliers – Ericsson AB (Nasdaq: ERIC), Nokia Networks , Alcatel-Lucent (NYSE: ALU), and Huawei Technologies Co. Ltd. (See LTE Base Station Strategies.)

While breaking into the big four is a tall order, there is an opportunity for focused, technology-led challengers to build a sustainable and profitable business in LTE, even if industrial history tells us that not all will thrive. (See Forecasting 4G Fortunes.)

This article provides a summary of the eNodeB products for Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY), Motorola Inc. (NYSE: MOT), NEC Corp. (Tokyo: 6701), Nortel Networks Ltd. , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), extracted from the in-depth profiles featured in the recent Heavy Reading report, "LTE Base Stations & the Evolved Radio Access Network," the first detailed, product-specific, independent market research available off-the-shelf on this topic.

What makes Fujitsu so interesting is its position as the lead eNodeB supplier to NTT DoCoMo Inc. (NYSE: DCM), for which it has provided the equipment used in DoCoMo's laboratory and outdoor field testing – for example, when the operator said it had recorded a downlink transmission rate of 250 Mbit/s to a moving vehicle. (See DoCoMo Takes LTE to 250 Mbit/s.)

Fujitsu's first commercial product release is focused on macro, singlemode LTE base stations. It will offer both hardened outdoor products and indoor rackmounted products, as well as outdoor remote radio heads (RRHs). RRHs are already popular in Japan for 3G and are expected to dominate LTE deployments globally. At this stage the vendor does not plan to introduce multimode equipment to combine 3G and LTE into the same product set.

The 2U baseband module is fixed-configuration rackmount hardware said to scale up to support 3x20 MHz sectors in a 4x4 MIMO configuration. The radio module is also singlemode and is capable of supporting 2x2 MIMO, with Fujitsu claiming state-of-art power efficiency.

Motorola's eNodeB product is based on the same hardware platform as its mobile WiMax base station, which the firm believes provides it with three key advantages in the early phases of LTE: experience in OFDMA and MIMO; enhanced scale across the supply chain; and crucially, a mature, low-risk platform on which to deploy LTE. Other vendors are introducing entirely new hardware platforms to support LTE, which adds risk to product development and may distract from the "finishing touches" that actually make a product deployable and usable by operators.

The LTE product is a discrete overlay design, and Motorola is among the first to offer rackmounted base stations in place of the classic cabinet designs used in 2G and 3G. The 3U baseband module may be larger than some competitor products, but this is in keeping with Motorola's view that a mature, tested platform is superior, given the inherent risk in launching new radio access technologies such as LTE.

NEC's strategy for the LTE market can be viewed in the context of its participation in the 3G market, where it has had domestic success in Japan and wider international success, primarily through its joint venture with Siemens AG (NYSE: SI; Frankfurt: SIE). It now faces the same situation in LTE, with strong technology and domestic relationships as shown through its work with NTT DoCoMo, yet with a need to develop international distribution and support.

NEC plans both LTE upgrade modules for the installed base of NEC-Siemens 3G equipment and discrete LTE overlay products. In both cases the hardware and software is the same, but with different form-factors. The standalone LTE baseband module is said to scale to support 3x20 MHz sectors in a 4x4 MIMO configuration in just a single 1U device – a performance density unimaginable just a few years ago. A radio module is targeted at both WCDMA and LTE at output powers ranging from 10 watts to 80 watts.

NEC has a relatively advanced small-cell strategy, with hardened outdoor units that integrate radio and baseband for hotspot and pole-mount installations also on the near-term roadmap.

The corporate agenda dominates any discussion of Nortel, and some kind of resolution to the ownership and financial stability issue is obviously vital if the product strategy is to make itself heard above the noise. LTE has, however, been identified as the key development initiative for the firm's wireless business. Trials with Verizon Wireless and T-Mobile Deutschland GmbH have been announced.

Nortel is focused on compact macro, singlemode base station products for its first LTE release, offering distributed eNodeBs typically with rackmount baseband modules and outdoor RRHs, or fully outdoor systems. It is also developing dualmode base stations with CDMA/LTE and GSM/LTE products, both of which are scheduled to be available in early 2010. This puts it somewhere between the tightly integrated, multi-standard RAN products and the discrete LTE-only overlay product in terms of portfolio positioning. On the radio module, it sees optimal performance from optimized, singlemode products.

ZTE has built up substantial position in GSM and CDMA 1X, primarily in emerging markets, but possibly the major near-term opportunity for ZTE in LTE is to extend its TD-SCDMA footprint being built out by China Mobile Communications Corp. over the next two years and transition this into TD-LTE in the 2010 timeframe.

ZTE's eNodeB strategy is supported through its "Unified Hardware Platform," a multi-standard base-station concept that can support GSM, CDMA, TD-SCDMA, UMTS, and LTE. A MicroTCA chassis is used for the baseband unit, which supports digital processing boards for each radio interface technology.

This product design makes it possible to upgrade any existing 2G or 3G base stations using the MicroTCA hardware to LTE with the addition of a new baseband card and RRH, assuming there is space available in the cabinet/chassis. Alternatively, the platform can be deployed for LTE only.

— Gabriel Brown, Senior Analyst, Heavy Reading

In-depth profiles of the eNodeB product strategies of all these LTE vendors are provided in the Heavy Reading report "LTE Base Stations & the Evolved Radio Access Network." For additional information, or to request a free executive summary of this report, please contact:

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