UMTS: Truly, you have a dizzying intellect

We have spent a lot of time in recent months studying the specifications for "Uu", the UMTS 3G subscriber interface. The spec is an obfuscated mess and the experts who publish books seem to disagree on a lot of critical details. In fact, the literature is so inconsistent that we are starting a public wiki-based documentation project.

In its basic form (non-HSPA), UMTS can deliver 384 kb/s per channel with up to 4 such channels active at once, assuming good link margins, small delay spreads, good power control, proper phase of moon, low traffic levels in surrounding cells, and generally clean living and happy thoughts on the part of everyone involved. That's just over 1.5 Mb/s on a really, really good day. To do this, UMTS musters just about all of the fancy math that the 1990's had to offer: orthogonal spreading codes (at least, orthogonal until they hit the real world), turbo codes, rake receivers, multisensor diversity demodulators. In exchange for all of this complexity you get roughly half (yes, half) the usable bit rate that you could get from an EDGE-style PSK/TDMA interface in the same bandwidth, except that the PSK/TDMA approach would provide more solid QoS guarantees, use a lot fewer transistors and be more power-efficient due to smaller crest factors in the amplifiers.

So, you might ask, why all of the new complexity if we get no performance advantage? Because simple approaches don't produce enough new intellectual property to keep the usual suspects in business. If you just take the GSM/GPRS/EDGE specification and change some parameters (like symbol rate and number of timeslots) you can get a very efficient, flexible system, but you won't have a much fodder for IEEE papers. Worse yet, you don't generate a lot of new patents, and with a lot of the patents on 2.xG systems expiring early in this decade, the NEPs needed a new gravy train. This complexity also deters small players from building their own UMTS implementations. (We have taken that as a challenge, but then we are unreasonable people.)

And what did UMTS do for the carriers? It nearly killed them. They overbid for the spectrum, barely had enough money left to roll out these really expensive new networks and when it was over they discovered that all their customers really wanted was better coverage and lower bills, neither of which have anything to do with UMTS. (The iPhone later proved that lack of demand for data was mostly due to the carriers' walled-garden approach to the itnernet, but that's fodder for a different post.) The killer app for the next five years turned out to be text messaging and economists got to write lots of papers saying things like "We conclude that the rationalization of bidding in the United Kingdom’s UMTS auction remains problematic." And just as the carriers are starting to recover from UMTS, the usual suspects start pushing the next shiny, new thing: LTE/IMS.

Making GSM Future-Compatible

Over the last few weeks, I have been reading through the 3GPP IMS specifications. IMS is the core network for next-generation 4G/LTE mobile data and telephony. Going through the specs is more like bush-whacking than reading; I still can't look at most of the network diagrams without getting dizzy. But I am starting to get a feel for it. In it's essence, IMS is a SIP core network for cellular. Granted, it still looks way more complicated than it needs to be to serve that function, but that's what it is.

Lucky for us, one of the key ideas of OpenBTS is to also use a SIP core network for cellular. So in terms of core networks, we are about five years ahead of the industry, even if the air interface is Um or Uu. We expect the commercial release of OpenBTS to "just plug in" to IMS core networks within a few weeks. IMS compatibility has two big implications for OpenBTS moving forward.

First, it means that there is an application for OpenBTS in incumbent carrier networks that are moving to 4G in the next few years. I've had the opportunity to talk to executives and network engineers from a few carriers who are planning their 4G transitions and have heard the same story over and over. Here it is: "The 4G rollout is expensive, but the performance improvements justify the cost. Except in rural areas, where the subscriber density is too low to justify the expense. But if we keep running GSM/EPGRS or 3G in those areas, then we will have to continue running the old SS7-style core network in addition to the new IMS core network. So we either waste money running two core networks or we waste money installing 4G basestations in the middle of nowhere." The OpenBTS approach offers a solution: Refit your rural sites with an inexpensive OpenBTS-based RAN and then turn off all those BSCs and MSCs.

Second, it eases the minds of carriers looking at greenfield rollouts in the developing world. These carriers need inexpensive networks, but don't want to feel like they are installing obsolete technology. Installing some low-end BTS/BSC/MSC combination just because it's cheap is installing obsolete technology because it will saddle you with an end-of-life core network that you will need to continue to support for years. Sure, you might run your circuit-switched protocols over 802.whatever, a la SIGTRAN, but all that means is that you're not completely stupid; Abis-over-IP is so 1998. On the other hand, installing an IMS-compatible OpenBTS-based network is a first step toward 4G, even if the initial rollout only supports 2G handsets. When the future arrives in your corner of the world, you'll be ready.

What Stuff Costs, Part 2: CAPEX

There are no "list prices" in the global telecom industry. Every purchase is a negotiated deal with the details covered by NDAs. Prices are arbitrary.  How do the equipment providers get away with that? Let's take a look...

Consider the cost of installing a BTS in rural site.  Something like this:

That costs $200k-$250k, depending on what part of the world you're in.  Most of that money is for "civil installation": site prep, concrete pads, backup power, the mast, that little shack, etc.  There's well over $150k worth of stuff there just to support the BTS.  So what should the actual BTS cost?  As long as it's a lot less than the infrastructure cost, the buyer doesn't care because it won't be a significant part of the total site cost. The baseband processors, transceivers, power supplies and amplifiers for a 3-sector 3-TRX ("1/1/1") kit typically run $20k-$50k, depending on the vendor, the buyer, the specific product and whatever side deals the vendor can offer.  That will give 21 Bm channels at full rate.  There's no point in going below $20k because the savings to the carrier are insignificant below that point.  And the price can't go much above $50k before the BTS becomes significant in the total.  Notice that this price range has nothing to do with the actual cost of producing a BTS, as long as that cost is well below $20k.  The total installed cost is around $75k per fielded TRX, or around $11k per Bm channel.

That's the equipment in the field.  You also need a core network.  The core network gets installed carrier-grade data centers.  As long as the equipment costs less than the data centers, prices just don't matter much.  Together, the BSCs, MSCs and location registers in the core network can easily cost over $5k per fielded TRX, or about $700 per Bm channel.  The civil part probably costs twice that, bringing to total to around $15k/TRX or $2,100 per Bm channel.  The core network also creates a floor for a viable network size, since even a "small" MSC is built to support hundreds of cell sites and priced accordingly.

So the rollout cost is around $15k/TRX for electronics and totals around $90k/TRX for a low-density network when you include all of the civil infrastructure.  One TRX can serve about 1,000 subscribers in the developing world so your rollout capital is least $90 per subscriber, not counting counting other costs ignored here.  Note, though, that the dominant cost is civil infrastructure.  Even if the electronics were free, the total capital would not change by more than about 25%.

The only way to dramatically change the cost of a cellular network is to simplify the infrastructure, something that the existing equipment providers have little motivation to do.  For example, if the whole BTS package can be mounted directly onto the mast and left out in the weather, you can get rid of that air conditioned shack.  If you cut the power requirements, you also cut the cost of the backup power systems.  OpenBTS is radical, though, in its approach to the core network: get rid of it and run BTS units as peers.  Don't just reduce the cost of equipment.  Reduce the amount of equipment.

This is one way that OpenBTS hopes to change the economics of rural cellular service: reducing the capital requirements to build a network. The OpenBTS model can reduce the rollout capital from over $90/sub to around $25/sub, not by offering a "cheap BTS" but by eliminating most of the steel and concrete and generators that a conventional GSM network requires.  OpenBTS can also reduce the minimum size of a viable network to something as small as a single cell site, allowing a carrier to start service with an initial capital investment of less than $30k.  Will carriers go for it, though?  Is there any spectrum available for this new kind of carrier to emerge?  We're working on it...