Sunday, May 14, 2017

Big shifts in the U.S. mobile market – Part 3


After years of rather stagnant market positions and look-a-like services, suddenly a lot is happening in the U.S. mobile market. The first part of this series looked at the move to unlimited mobile data plans and the new regulatory climate in Washington; the second part covered the rapidly evolving spectrum map in the U.S., including the recently completed Broadcast Incentive auction and the bidding war for mmWave spectrum.

Extending LTE-Advanced to unlicensed spectrum

The evolving spectrum map in the U.S. would not be complete without at least a look at LTE-Advanced in unlicensed spectrum, a proposal that has been backed by Qualcomm and others for some years but which has yet to see mass adoption. Everyone likes something for free, so there certainly should be strong motivation by carriers to augment their performance using spectrum they do not have to pay for. However, the industry has been talking about this for nearly four years. Finally, it looks like the U.S. market is ready for the first commercial rollouts in the coming months. As of May 2017, there is a budding ecosystem of silicon, software and systems supporting the use of unlicensed spectrum. Downlink rates could reach into the hundreds of megabits per second close to a tower, with the right handset and the carrier is aboard.

There are at least four models for LTE Unlicensed: LTE-U, LAA, LWA and MulteFire.


LTE-U, which is based on 3GPP Release 12, combines LTE in unlicensed spectrum (5 GHz) with LTE in the licensed band through carrier aggregation in the downlink. LTE-U, along with LWA, is supported by the Qualcomm Snapdragon 820 processor with X12 LTE, as well as the discrete Snapdragon X12 LTE modem. The new Samsung Galaxy S8 is the first mobile on the U.S. market to support LTE-U.


LAA (Licensed Assisted Access) is a 3GPP standard finalised in 3GPP Release 13 that uses a licensed LTE band as the primary carrier augmented through Carrier Aggregation to add a carrier in unlicensed 5 GHz (WiFi) spectrum for the downlink only. The idea is to carry high-priority traffic on the licensed band, while lower priority traffic is carried over the WiFi channel. The idea is very appealing to mobile operators but faced resistance from WiFi proponents and Wireless Internet Service Providers (WISPs) who worried about interference. As early as 2015, it looked like Verizon and T-Mobile were ready to move ahead with LAA, but these plans were put on hold by the interference question.

A Qualcomm paper now finds LAA to be suited for the U.S. market, as well as EU countries and Japan, because it uses Listen Before Talk (LBT) technology to ensure co-existence with WiFi. In September 2016, the FCC granted an equipment authorisation to Qualcomm. Support for uplinks in the WiFi channel is expected in Release 14 and demos were featured at Mobile World Congress in February.


LTE - WiFi link aggregation (LWA), which is defined in 3GPP Release 13, is aimed at deployments where the operators already has carrier WiFi in operation in either or both 2.4 and 5 GHz bands. WiFi resources can be managed through the LTE anchor. Qualcomm says the aggregation is possible even when LTE and WiFi access points are at different physical locations.


MulteFire targets deployments operating solely in unlicensed spectrum in the 5 GHz band and without a licensed anchor channel. The MulteFire Alliance, which was formed in 2015, is developing a global ecosystem for LTE in unlicensed spectrum and the further development of small cell technology. The MulteFire Release 1.0 specification, which was approved in December 2016, builds on elements of 3GPP Release 13 LAA for the downlink and Release 14 enhanced LAA (eLAA) for the uplink. It includes enhancements for operation solely in unlicensed spectrum such as robust procedures for mobility, paging, initial access and efficient uplink control channels. It also uses Listen Before Talk to operating in shared spectrum.

Backers of this MulteFire include Liberty Global, CableLabs, Ericsson, Huawei, Intel, Nokia, Qualcomm and many others. Potential applications could include large campuses that want to use LTE technologies instead of WiFi for managing large numbers of wireless connections on their premises. It is not clear if any carriers will launch services based on MulteFire, but presumably it could offer a pathway to market for a new entrant.

The following covers news relating to operator's unlicensed spectrum rollouts for the U.S. market:

T-Mobile US

In February, following the FCC certification of equipment from strategic partners Ericsson and Nokia, T-Mobile US, confirmed that it was deploying LTE-U technology in its LTE network. The company anticipates introducing new network capabilities and devices in the coming months. LTE- will enable T-Mobile customers to tap into the first 20 MHz of under-utilised unlicensed spectrum on the 5 GHz band and use it for additional LTE capacity. T-Mobile said it already has more capacity per subscriber than AT&T and Verizon, and the addition of LTE-U will extend that lead.


In February, as part of its announcement to bring 5G Evolution technologies to its first markets this year, AT&T said that LTE-LAA will play a key role in enabling peak speeds of 1 Gbit/s. The carrier highlighted Samung's Galaxy S8 as the first handset capable of its faster service. AT&T has a separate pre 5G trial underway in Austin that uses Ericsson's 5G RAN technology and the Intel 5G Mobile Trial Platform. This trial evaluates the use of 28 GHz, 39 GHz and sub-6 GHz frequency bands. AT&T is also working with Nokia to deliver DIRECTV NOW over a fixed wireless 5G connection using 39 GHz mmWave technology.


Verizon has worked closely with Qualcomm since at least 2015 to support LTE-U and put to rest interference concerns raised by the WiFi Alliance. In 2016, the companies conducted joint LTE-U testing in Oklahoma City and Raleigh under permission from the FCC. Verizon recently filed for an extension of that testing permit and was also a recent launch partner for Samsung’s Galaxy S8. There are no recently documents on the Verizon website discussing LTE-U or LTE-LAA plans but an analyst meeting to discuss the company's spectrum strategy is scheduled for May 8th.


Sprint, which currently serves about 60 million subscribers, holds more than 160 MHz of 2.5 GHz spectrum in the top 100 U.S. markets. This vast pool was created through its integration with Clearwire, the venture that long ago sought to build a nationwide WiMAX network. In 2013, Sprint completed the integration of Clearwire. More recently, Sprint CTO John Saw was quoted in the press as saying that Sprint would not have to resort to unlicensed WiFi bands to boost its network as it already has plenty of licensed 2.5 GHz spectrum in the top U.S. markets.

In March, Sprint, together with Qualcomm and Motorola Mobility (a division of Lenovo) showcased a gigabit-class LTE service that employs three-channel carrier aggregation (CA) and 60 MHz of 2.5 GHz spectrum in combination with 4 x 4 MIMO and 256QAM higher order modulation technology to deliver Category 16 LTE download data speeds on a TDD network. Sprint stated that it plans to utilise its 2.5 GHz spectrum to offer gigabit LTE service in high-traffic locations across the U.S. as part of its strategy to provide a foundation for 5G by 'densifying' its network via the addition of small cells and smart antennas. Sprint also plans to utilise massive MIMO, a key element of 5G, to further enhance capacity and coverage for its 2.5 GHz TDD-LTE spectrum.

Leveraging massive MIMO radios using 64T64R, Sprint expects to be able to increase capacity to beyond the 1 Gbit/s rate and deliver capacity of 3 to 6 Gbit/s per sector. Sprint also noted that working with Ericsson, at MWC 2017 it demonstrated 1 Gbit/s performance over 60 MHz of 2.5 GHz spectrum, while in collaboration with Nokia it demonstrated how massive MIMO can be used to increase cell capacity up to 8x compared to 4G LTE using 2.5 GHz TDD-LTE spectrum with 64T64R.

Beaten to the punch

Carrier aggregation has been in deployment now for several years and the various versions of LTE in unlicensed spectrum likewise have had several years in which to mature. Global carriers started to announce field trials as early as July 2015. For instance, in that month, Huawei and NTT Docomo performed a live demonstration of co-channel coexistence between LAA and WiFi systems. A software-based Listen Before Talk (LBT) was featured already in that trial.

In February, Vodafone Turkey claimed to be the first carrier worldwide to deploy commercially install a network “ready to use LAA technology, based on the 3GPP R13 standard. The LAA-ready network was tested using a Huawei Lampsite base station in Vodafone Turkey's Arena Store in Istanbul. It uses 40 MHz of unlicensed spectrum in 5 GHz and 15 MHz licensed spectrum in 2.6 GHz for three carrier aggregation. It hit an on-site peak download speed of 370 Mbit/s using a Qualcomm Snapdragon 835 processor with X16 LTE mobile test device.

In April, GSA published a report stating that 13 operators were trialing or deploying LAA, and 8 operators were trialing or deploying LTE-U. Early movers in the international area for LAA include China Mobile, Deutsche Telekom (trials with Qualcomm), SK Telekom, SmarTone (Hong Kong), Vodafone Netherlands (trial with Ericsson) and others. For LWA, there is a trial underway in Taiwan by ChungHwa Telekom and in Singapore by M1.

Verizon to acquire Straight Path for $3.1bn

Straight Path Communications has announced a definitive merger agreement under which Verizon Communications will acquire Straight Path for $184.00 per share, equating to an enterprise value of approximately $3.1 billion, in an all-stock transaction.

Straight Path holds an extensive portfolio of 39 GHz and 28 GHz wireless spectrum licenses, specifically 868 FCC spectrum licenses providing wireless coverage across the U.S. The company also develops next generation wireless technology through its Straight Path Ventures subsidiary, and holds licenses and conducts business related to certain patents via its Straight Path IP Group subsidiary.

Concurrent with the agreement, Verizon will pay on behalf of Straight Path a termination fee of $38 million to AT&T, which on April 10th announced an agreement to acquire Straight Path for $95.63 per share, representing a total value of $1.6 billion. The sum implied a premium of 204% to the closing price of Straight Path's stock of $31.41 on January 11th and a 162% premium to the $36.48 price on April 7th.

As part of the agreement with Verizon, Straight Path announced that it is terminating the previously announced definitive agreement to merge with AT&T and Switchback Merger Sub. As previously announced, the Straight Path board determined after consultations with financial and legal advisors that the transaction with Verizon constituted a superior proposal. AT&T opted not to make any new bids or proposals to Straight Path or to propose amendments to the original agreement.

The acquisition of Straight Path for $184.00 per share in Verizon stock implies a premium of 486% to the closing price of Straight Path common stock of $31.41 on January 11, 2017, the day prior to Straight Path announcing its FCC settlement and strategic alternatives process, and a 404% premium to the closing stock price of $36.48 on April 7th, the business day prior to announcement of the AT&T merger agreement.

The proposed transaction has been approved by the boards of directors of Straight Path and Verizon, and the companies currently anticipate closing within nine months, subject to FCC review. The transaction is supported by Straight Path's majority shareholder, Howard Jonas, who has entered into a voting agreement with Verizon and agreed to vote his Class A shares in support of the transaction.

Regarding the acquisition, Hans Vestberg, EVP and president of global network and technology at Verizon, said, "Verizon now has all of the pieces in place to accelerate the deployment of 5G… combined with the recent transactions with Corning, XO Communications and Prysmian Group, this is another step to build the next-generation network for its customers".

AT&T Buys 39 GHz and 28 GHz Licenses for $1.6 Billion

AT&T agreed to acquire Straight Path Communications, which holds a nationwide portfolio of millimeter wave (mmWave) spectrum, including 39 GHz and 28 GHz licenses. Specifically, AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets. The deal was valued at $1.6 billion, which includes liabilities an