Motorola Scores a First – Announces Over-The-Air Test of TD-LTE

| Aug 10, 2009 | Wireless Infrastructure | Competitive Intelligence Report

| Analysts: Peter Jarich, Daryl Schoolar

Current Perspective: Slightly Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

August 6, 2009 – Motorola’s Home and Networks Mobility division announced the successful completion of a joint over-the-air TD-LTE trial in China, including: delivery of 70 Mbps throughput in a 20 MHz channel, mobility and handover applications, multi-user equipment testing in a single sector. Building on a baseband unit supporting WiMAX, TD-LTE and FDD-LTE, a remote radio unit supporting 2x2 MIMO, and its R&D team in China, the test results have been submitted to the LTE/SAE Trial Initiative.

Analytical Summary

• Current Perspective: Slightly positive on Motorola’s successful over-the-air TD-LTE testing in China. While it’s well known that China Mobile is committed to the success of TD-LTE, Motorola’s testing signals technical expertise with the technology while highlighting its relationship with Chinese operators and the Chinese government – two sets of relationships necessary for any vendor looking to do business in the People’s Republic. Yet, even though Motorola might be claiming some TD-LTE firsts, it’s unclear how much differentiation they lend and how well any vendor who isn’t present in China Mobile’s TD-SCDMA builds can compete for its TD-LTE business.

• Vendor Importance: High to Motorola, because LTE is an opportunity the company must execute on going forward. To be fair, the company has 2G, 3G and WiMAX businesses. Its 2G business, however, is marginal. Its 3G business is limited to CDMA2000 - a declining market where Chinese vendors are making significant inroads. WiMAX, in turn, is shaping up to be a smaller market than most network vendors had hoped. This makes LTE – including TD-LTE – a critically important market opportunity. While proving that the company can continue to deliver innovative wireless solutions, despite the financial turmoil surrounding it, the announcement sends a message that Motorola is tightly focused on TD-LTE and doing what it takes to make the market a commercial reality - all important steps to winning TD-LTE business.

• Market Impact: Moderate on the wireless infrastructure market, because even though every wireless vendor has loudly proclaimed its commitment to TD-LTE, Motorola’s explanation of its progress with TD-LTE commercialization should put pressure on its competitors to demonstrate similar (or more advanced) progress. After all, while TD-SCDMA has been largely panned as a mobile broadband technology thanks to a lack of global commitment, TD-LTE stands to enjoy much greater success, in part because of China’s commitment to the technology, in part because of TDD spectrum opportunities outside of China.

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Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• Motorola’s TD-LTE trials are in line with the timing noted earlier in the year – when TD-LTE trials with seven vendors were telegraphed for H2 2009. This implies that additional trials are already on-going or potentially near completion. To the extent that these trials will extend from China to Europe and India, it’s unlikely that all will enjoy the important link to China Mobile. Nonetheless, the vendors involved need to follow Motorola’s lead and highlight their TD-LTE prowess as soon as possible.

• Ericsson, in particular, needs to showcase its progress with TD-LTE in the near-term. The Swedish vendor may count some of the earliest LTE momentum (Verizon, Telia Sonera). It cannot, however, count on exposure to the WiMAX market as proof of its commercial OFDM and TDD expertise. Likewise, it cannot count major momentum with TD-SCDMA – momentum that would point to TDD expertise as well as important TD-LTE sales channels.

• Huawei and ZTE need to work on highlighting the synergies between TD-SCDMA and TD-LTE. With remarkable success in China’s 3G network builds (including TD-SCDMA), it’s expected that the two Chinese vendors will be successful with TD-LTE in China as well. This success, however, isn’t assured and pointing to synergies between the two technologies is key to keeping this business, not to mention building the credibility to help push TD-SCDMA and TD-LTE outside of China.

• All LTE vendors need to push for TD-LTE to be deployed outside of China. In some cases, this may require careful messaging in order to balance a push on TD-LTE vs. a push on mobile WIMAX (i.e., for Motorola, Huawei and ZTE). However, where there are TDD spectrum allocations around the world, there are significant opportunities for TD-LTE outside China; to tap these opportunities vendors will need to make it clear that TD-LTE is not a China-specific development and that operator demands elsewhere will not be ignored.

• While having made the point before, it is worth repeating: wireless infrastructure vendors need to sell their LTE capabilities as part of a network solution. Current TD-LTE trials are clearly focused on the air interface and RAN. Nonetheless, would-be TD-LTE operators will need more than just TD-LTE base stations to get services up and running; vendors need to prove that they can supply more than just base stations, if only to differentiate themselves against vendors like Motorola who come up short on this front.

• The WiMAX Forum needs to go on the offensive, positioning mobile WiMAX as a more mature and proven solution to the problems TD-LTE is attempting to solve. A mobile broadband technology for unpaired spectrum, TD-LTE is attempting to compete head-on with mobile WiMAX. Convincing China Mobile that mobile WiMAX is a better solution may be a lost cause. To the opportunity with other operators, the WiMAX community needs to nip any TD-LTE hype before it develops, playing to its own strengths in terms of deployments, ecosystem development, silicon support, etc.

Recommended End User / Customer Actions

• All wireless operators looking at Motorola’s network equipment need to follow the company’s financials closely. Where the company was once one of the most powerful names in wireless, it’s fallen on hard times – with a mobile device business that has dragged on the entire company’s financial health and a networks business that is facing a revenue decline. Against this backdrop, would-be customers need to know how (if) the company will fund innovative R&D going forward and how it will support operator deployments in the long-term.

• Operators, particularly outside China, need to probe Motorola – and its competitors – on the planned availability of TD-LTE solutions. To be sure, given the TD-LTE opportunity in China, every network vendor will rush to commercialize the technology as soon as possible. However, if FDD-LTE timelines slip (something that’s been reported), TD-LTE will suffer as well. Likewise, if vendors remain fixated on the opportunity in China, the timeline for bringing TD-LTE to other regions (from a sales and/or spectrum perspective) could get extended.

• TD-LTE’s primary value proposition is the ability to support mobile broadband services in unpaired spectrum – while benefitting from the magnitude of the (future) LTE ecosystem. Mobile WiMAX, however, can make the same claims; it operates in unpaired spectrum; it’s ramping up its ecosystem. To this end, even though China Mobile may be committed to TD-LTE, other operators waiting for TD-LTE should take a closer look at Mobile WiMAX, comparing its performance, ecosystem and development timelines to TD-LTE.

• Beyond network support, any would-be TD-LTE operator needs to work closely with device vendors to drive the development of compelling TD-LTE terminals in the near-term. To its credit, China Mobile’s interest in the technology has driven major silicon vendors to develop solutions for supporting the TDD and FDD variants of LTE in a single device. Planned silicon support, however, is far removed from actual TD-LTE devices – devices that will be required to move the market forward.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Wireless Infrastructure | More information

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