What 4G means for business

Behind the scenes, and for many years, the telecommunications industry has been debating how 4G, the next generation of mobile communications, should be put into practice. But in recent months – from the outside at least – it seems as though the implementation of 4G has moved forward very quickly.

Bar the initial introduction of mobile phones, the advent of 4G could have more immediate impact for businesses than any previous mobile standard. Since the introduction of its predecessor, 3G, smartphones have become an invaluable component of business infrastructure, and have changed the way that consumers purchase goods and interact with suppliers.

But how exactly will 4G affect businesses, and how should they prepare? It is early days, and the real revolutionary impact of 4G may well be that it enables some mobile technology that has yet to be invented.

Nevertheless, there are some immediate opportunities and short-term predictions to be made, allowing IT organisations to at least be prepared for what may be a critical component of their network infrastructure for the near future.

Following some debate, the term 4G is now usually used to refer to the LTE (Long- Term Evolution) wireless networking standard. The standard was developed by telecommunications body the 3GPP (3rd Generation Partnership Project) to meet growing user demand for higher data rates and quality of service, and to spur competition in 3G services.

With the ability to exceed download rates of 100Mbps and upload speeds of 50Mbps, 4G can easily match, and in some cases exceed, speeds delivered by fixed-line fibre- optic broadband connections.

The state of play

In August, telecommunications regulator Ofcom granted Everything Everywhere, the UK conglomerate of T-Mobile and Orange networks, permission to use its existing 1800MHz spectrum band to provide the UK’s first nationwide 4G services, on the grounds that stalling it any longer would have been to the “detriment to consumers”.

Everything Everywhere has set up a new company and brand, called simply EE, to market and sell its 4G services, which will start to become available in late October.

Ofcom has granted mobile operator Three the opportunity to own and operate a part of EE’s lucrative 1800MHz spectrum – the only one compatible with Apple’s iPhone 5.

However, EE has until September 2013 to clear the spectrum it sold to the company, so Three is unlikely to launch competing 4G services on that particular spectrum for a year.

The other mobile operators have a few more hurdles in their way, as the only other spectrum bands suitable for the deployment of 4G services, a 1.6GHz band and an 800MHz band, are currently used for terrestrial broadcasting. However, with analogue TV broadcasts about to be discontinued, Ofcom has worked to unlock the spectrum for 4G services.

“We wanted to maintain a minimum four- player market in the UK,” explains Ofcom communications manager Rhys Hurd. “We believed if we had at least four wholesalers capable of rolling out 4G networks, then that would be really good news for consumers in terms of price.”

Ofcom brokered discussions between network infrastructure operator Arqiva, TV broadcasters and Digital UK, the non-profit organisation leading the UK’s digital TV switchover. Together, they agreed that the analogue TV spectrum could be freed up and auctioned after the UK switches from terrestrial TV to digital services later this year.

This will give Vodafone, O2and Three the opportunity to bid for the chance to offer spectrum bands from May next year.

So, as of spring 2013, the UK should have a variety of 4G services available to businesses and consumers. This promises not only to increase the bandwidth available to mobile devices, but may also extend broadband Internet to areas of the country currently not served by fixed-line services.

While the government has pledged to provide all of the UK with at least 2Mbps fixed-line fire-optic broadband by 2015, EE is planning to cover 98% of the UK with 4G by 2014, giving businesses in rural locations an incentive to switch from fixed-line broadband connections to new mobile services sooner rather than later.

4G in the enterprise

EE is, unsurprisingly, bullish on the impact of 4G on business. “It has the potential to revolutionise the way British businesses work,” says Martin Stiven, vice president of the company’s B2B division.

For one thing, he says, it will allow much richer applications to be run on mobile devices. “It will allow firms to fully exploit cloud-based apps through mobile, such as Salesforce.com, SharePoint, video- conferencing and other collaboration and communication tools.”

It will also boost administrative functions such as remote backup, synchronisation and device management, by allowing better connections with employee devices, he says.

“Employees will be able to access their back- office systems and backup laptop data while on the move. This will reduce the need to return to the office and lower the risk of losing valuable data.”

In addition, there will be specific benefits for various industry verticals, Stiven claims.

“Construction firms will be able to set up on- site offices quickly, and security firms will be able to install CCTV in record time,” he says. “Not only that, but independent retailers will have the opportunity to set up pop-up shops quickly without waiting multiple weeks’ lease time for fixed-line broadband to be installed.”

Similarly, firms processing credit card transactions could use a 4G connection as a backup option in the event that their fixed- line broadband connection goes down, says Martin Saunders, product director at managed services provider Claranet.

“Because of changes that have been happening around the Payment Card Industry Digital Security Standard (PCI DSS), it has become less and less viable for merchants to be storing credit card information, just in case their broadband connection goes down,” he explains.

4G could also prove useful for businesses that transact payments using mobile devices, argues Dan Wagner, founder of mobile payments service mPowa, and could allow mobile salespeople to process payments while on the go.

“Our business initiative is based around mobility and the fact that people can take payments on the move,” he says. “Obviously you need good connections and good data interaction in order to be able to achieve that when you’re travelling.”

If 4G services really deliver the kind of bandwidth and network performance that the telcos are promising, then some companies might begin to wonder why they buy fixed-line broadband at all.

Claranet’s Saunders says this is not entirely misguided. Office broadband consumption should – in theory – be lower per individual than home use, as employees should be reading emails and sharing data, not streaming online videos. In certain cases, therefore, 4G services may replace some or all of a company’s fixed-line broadband consumption.

Before making the leap, however, IT leaders would be advised to look at their network usage statistics, to check the true profile of their current consumption, Saunders says. Furthermore, he argues that having good customer services and security is far more important for a business than the outright amount of bandwidth on offer.

Customer service

Saunders adds that his customers are particularly interested in 4G in the context of customer-facing operations.

“Businesses will be able to deploy iPads in stores, allowing customers to browse catalogues,” he says. “Being able to secure the connection without having to run a complex VPN client is resulting in much interest from businesses in this area.” As well as the impact of 4G on their own networks, businesses must be mindful of its effect on customer behaviour. Most obviously, it is reasonable to assume that improved mobile broadband services will enable more mobile commerce.

In response to an Ofcom consultation on mobile competition, US online auction company eBay cited a study it had commissioned into consumer attitudes to m-commerce.

The study asked consumers what barriers prevented them from using their mobile devices for shopping. Of the 1,500 surveyed, 65% said connection speed, 63% said the reliability of their mobile Internet connection, 62% said the cost of mobile Internet services and 52% cited network coverage.

“An item is purchased every second in the UK through eBay mobile apps, and for our users mobile shopping is all about convenience and speed,” explains Oliver Ropars, senior director for EU Mobile at eBay. “A faster connection with 4G will help make the shopping experience even more appealing for customers.”

Beyond retail, businesses could use the improved multimedia capabilities allowed by 4G services to interact with customers. “Consultancies will be able to host video conference calls with clients while on the move,” says EE’s Stiven.

Potential issues with 4G

Forrester analyst Thomas Husson says it is not just the speed of 4G services that will allow richer multimedia experiences for customers, but also improved latency.

“Services that require not just higher speeds but also good latency will result in a much better experience for consumers,” says Husson. “The time to interact between the network will be lower, so there will be interesting use cases for multitasking services, multiplayer gaming and anything related to video.”

Claranet’s Saunders is sceptical that 4G will necessarily improve network latency, unless mobile operators invest in sufficient back-end infrastructure.

“If the networks don’t have capacity, it doesn’t matter what technology you run on the radio, it’s never going to be as good,” he says. “In that scenario, while 4G will be fine for regular Internet browsing and downloads, it won’t resolve the whole issue around latency and how responsive the network feels.”

Sylvain Fabre of analyst company Gartner agrees, saying that high-definition video and voice-over-IP (VoIP) services may still suffer from packet loss on 4G networks.

“Packet loss and other IP issues that result in one person getting cut off when the other talks could still occur if the network is congested,” he says. “Suddenly the lower-quality yet clear two-way communication that you’re used to on a good voice call doesn’t really work and can become annoying.”

Fabre adds that businesses offering 4G services inside buildings, whether for employees or customers, may experience signal degradation.

“It’s going to be harder to get a connection inside buildings until somebody does an in- building solution that maybe uses distributed antennas,” he says.

With numerous handsets with LTE connectivity due to be released over the next year or so, Fabre says that businesses will also have to ensure that they purchase, or are issued with, devices compatible with their 4G provider’s spectrum frequency to avoid employees being left “out of the loop” due to owning incompatible phones.

“The technology doesn’t simply resolve all these things, it introduces new challenges too,” says Fabre.

Of course, it is not possible to predict entirely the impact of 4G at this point. EE’s Stiven argues that only once 4G services are widely available will innovation around applications really take off.

“The really exciting bit is that organisations in 12 months’ time will have thought of a whole range of other innovative ways they can use it,” he says. “There are a lot of things we haven’t foreseen that 4G is useful for that will become a real engine for growth.”

Claranet’s Saunders advises companies against making rash decisions about 4G. “I’d say ‘watch this space’, and don’t make any quick moves,” he says.

In particular, he warns against choosing a mobile operator simply on the basis of its mobile broadband speeds. “I’d say it’s more important to look for customer services that make your life easier.”

Still, with mobile platforms threatening to eclipse fixed-line infrastructure as the dominant communications medium for business, IT leaders would be well advised to keep an eye on developments in the 4G arena, as they are certain to offer up opportunities for innovation and efficiency.


Ed Reeves

Ed Reeves co-founded Moneypenny with his sister Rachel Clacher in 2000. The company handles more than 9 million calls a year for 7,000 UK businesses and employs almost 400 members of staff. Reeves remains...

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