The 3G Transition Challenge

 

Author: David Gamba, Strategic Solutions Marketing, Xilinx, Inc.

 

Though the 3G rollout has been delayed from original prognostications, the transition to 3G is moving very quickly now. According to iSuppli, 2004 marked the last year that any infrastructure dollars will be spent installing a 2G network and 2006 will be the last year for any investment (and less than 5% at that) for a 2.5G network installation. With the transition to 3G and the associated higher-speed standards that can now be supported, the time is ripe for the mobile operators to quickly begin offering higher revenue generating data services to their customers to take advantage of the benefits of the latest standards.

 

As the standards move from the 2G and 2.5G-based standards of CDMA, GSM, GPRS and TDMA to the 3G-based standards of EDGE, CDMA2000, 1xDO-EV and WCMDA, new enriched data services and advanced functionality will be available. The enhanced revenue generating services will include messaging, photo transmission, email, internet access, motion video transmission and e-commerce and will be supplemented by advanced features such as Quality-of-Service (QoS) guarantees and bandwidth-on-demand adjustment capabilities, giving rise more combinations of revenue generating packages for the wireless operators.

 

The new data services and feature offerings will serve as a boon to wireless operators as they can now stabilize and reverse their eroding subscriber ARPU (see Table 1).  This is especially important in regions with very high penetration rates such as Western Europe (79%), Japan (69%) and North America (58%), where new subscribers will not provide the growth necessary to drive revenues.  In addition, by offering new data services and advanced features, wireless operators may be able to reduce their churn rate (especially in regions dominated by prepaid subscribers who do not have monthly contracts) by offering unique pricing packages.

 

 

Average Revenue Per User (ARPU)

 

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Voice

$82

$66

$54

$45

$39

$35

$33

$32

$31

$30

$29

Data

-

-

-

-

$1

$2

$4

$6

$8

$10

$13

Total

$82

$66

$54

$45

$40

$37

$37

$38

$39

$40

$42

Source: Forward Concepts

 

 

To enable these advanced data services offerings, the big question facing the wireless infrastructure industry is: What is the best way to deliver flexible, cost-effective solutions deployments to meet these requirements? Given that the 3GPP standards are still evolving and also distinct geographical variations will exist for quite some time, wireless base station designs are incorporating more programmable technologies such as Digital Signal Processors (DSPs) and Field Programmable Gate Arrays (FPGAs) in their designs. Not only do these devices speed time-to-market product delivery; they also enable flexibility for field upgrades to support future standard changes or additions. This represents a long overdue shift away from using ASIC technology, which does not offer the ability to future-proof deployments against standards changes or the flexibility to support geographic customization.

 

To support base stations implementing these new data service requirements, the throughput and processing power need to increase to support the additional algorithmic requirements driven by the data service requirements as well as an increasing number of users per base station. These design requirements dictate the use of FPGAs for hardware acceleration as traditional DSP farms cannot be combined to meet the required processing power and ASICs are not flexible enough for cost-effective deployment. FPGAs can be effectively used in the radio, baseband and transport modules of the wireless base station to implement the required performance levels by using parallel processing techniques leveraging dedicated integrated signal processing functional blocks. Given the wealth of opportunities for FPGAs inside of wireless base stations, iSuppli has forecasted that the programmable logic wireless infrastructure semiconductor TAM will grow to $382 million by 2008.

 

The 3G rollout is now in full force and will be driving new data service requirements that will enable wireless operators to stem their ARPU decline. Given the constantly evolving wireless standards and the recognized need for geographic customization, programmable technologies are rapidly replacing traditional ASICs. This trend will continue as base stations designs will need to offer more flexibility to meet the increasingly technically complex requirements for delivering next generation data services while maintaining the flexibility to avoid obsolescence or limited deployment by adapting to standards changes and geographic variations.

 

 

 

Text Box: David Gamba is a Senior Marketing Manager for the Strategic Solutions Marketing Group at Xilinx. In this role, Gamba is responsible for outbound marketing for the vertical markets supported by Xilinx solutions. Gamba joined Xilinx in 2004 and brings over eight years of experience in the semiconductor industry where he served in a variety of marketing and sales roles including technical sales, product definition and technical marketing. Prior to Xilinx, Gamba held various positions at Aeluros, Conexant (via their acquisition of HotRail) and Altera.