The key product in any LTE network will be the radio base station, or eNodeB. Equipment suppliers commercializing LTE radio equipment (and by extension, operators) face a vast number of decisions that hinge on assumptions around deployment scenarios and upgrade strategies, what will create a competitive advantage, and what will deliver an appropriate profit margin over a given timeframe.
Most obviously, there's debate in the market between integrated, multi-standard radio access networks (RANs) and discrete LTE overlays, with the best product portfolios able to support both. Other, more nuanced factors – such as the appropriate balance between software upgradeability and hardware refresh – are also shaping vendors' eNodeB product strategies significantly. For what is ostensibly a highly standardized network element, this is generating some surprisingly different eNodeB designs.
Below, this article provides brief summaries of the LTE base station product strategies of the big four RAN vendors – Ericsson AB (Nasdaq: ERIC), Nokia Networks , Alcatel-Lucent (NYSE: ALU), and Huawei Technologies Co. Ltd. – featured in the latest Heavy Reading report "LTE Base Stations & the Evolved Radio Access Network," the first detailed, product-specific, independent market research available off-the-shelf.
In a follow-up piece, I'll provide the same information 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), all of which have high hopes to revitalize their wireless infrastructure businesses through LTE and win back some market share from the big four.
While the RAN market leader is planning to offer LTE upgrade options for its GSM and 3G base stations, the real action is the new RBS 6000 platform scheduled for availability in mid 2009. Ericsson has bet the farm on the RBS 6000, which, on paper at least, will offer the most complete LTE base station portfolio, ranging from compact LTE overlay products to multi-standard cabinet designs that incorporate GSM and UMTS refresh alongside LTE. Ultimately, the intent is to tightly integrate different generations of RAN technology and drive opex per cell site as low as possible.
Ericsson's approaches to software-defined functions are interesting. A common radio module will be software-configurable to support GSM, UMTS, and LTE in the same device. But for the baseband, the company will use hardware-specific boards for each technology in a common form factor and cabinet design. Ericsson argues this will deliver superior price/performance over software-defined basebands because it is better able to optimize products and capture the ongoing benefits of improved processor technology. High volume is the key to making this strategy work.
The launch of the second-generation Flexi base station in October 2008 was something of scoop for Nokia Siemens, enabling it to claim bragging rights for shipping the first LTE-capable hardware.
Nokia Siemens has opted for a fully software-defined system that can be configured for LTE or UMTS in both the baseband and radio modules, each of which is housed in Flexi packaging that is field-proven to bring down site costs. The company's recent wins in Canada to provide an HSPA network that can be upgraded in software to LTE (backed up with contractual commitments) demonstrate the advantage of this approach and, crucially, show how having a new-generation base station platform is a competitive advantage.
Such a lead will only last so long, however, and I would expect Nokia Siemens to cycle relatively quickly through a new version of the product, bringing in the latest processors, etc., as available. Notably, GSM is not integrated with 3G and LTE today, as the company argues that GSM is best provided as a highly optimized, standalone product, although that may change in the future.
LTE is a great opportunity for Alcatel-Lucent, yet equally, competitors see the CDMA account base as ripe for picking as the world moves to LTE. In this context, the company's decision to ramp investment in LTE independently of its scaled-back cooperation with NEC is clearly a smart move.
Alcatel-Lucent's product focus is on a new ultra-compact LTE platform intended initially for discrete LTE overlay deployments, but over time its strategy will evolve into more of a multi-standard concept. Conceptually, the company leans toward innovative rackable systems, rather than classic cabinet-based base stations. The 1U baseband module is interesting in that such a small device has a modular design that can be hardware-optimized for particular deployment scenarios or capacity requirements. The baseband device will support a 3G software load in future.
The radio is designed to be software-configurable to support GSM, UMTS, and LTE. The same radio module can also be used with the current 3G base station, which itself can be upgraded to add LTE support via the addition of a new modem board.
Huawei's LTE product focus is on the 3900-series base stations (a.k.a. fourth-generation BTS) unveiled in February 2008, which are already shipping in large volume (several thousands of cabinets already live) into GSM and UMTS networks. This series forms the basis for the company's push into LTE.
The design is very much around the multi-standard base station concept with common, software-defined hardware modules used for GSM, UMTS, and LTE. Huawei's contract to supply the planned Canadian HSPA-to-LTE network speaks to the appeal of this software-upgrade approach and again reinforces the competitive advantage that comes from offering the latest-generation platform against "legacy" 3G products.
Huawei has so far been quiet about its plans to support LTE-compatible multi-standard radio heads (i.e., capable of GSM, UMTS, and LTE), but the company's advanced work on software-defined GSM/UMTS radios is a clear indicator of where it is headed. (See Huawei, VOD Go Soft in the RAN.)
— Gabriel Brown, Senior Analyst, Heavy Reading
In-depth profiles of the eNodeB product strategies of all these LTE vendors are provided in the new 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:
- Dave Williams
Sales Director, Heavy Reading