What is LTE-Advanced?
LTE-Advanced mainly offers increased peak data rate, higher spectral efficiency, increased number of simultaneously active subscribers, and improved performance at cell edges. LTE-Advanced is also both backwards- and forwards-compatible with LTE. LTE-Advanced leverages the following technologies: Carrier Aggregation (CA), enhanced use of multi-antenna techniques and support for Relay Nodes (RN).
In comparison, LTE-Advanced offers data download speeds up to 1 Gbps (30 bits per Hz) and 500 Mbps uploads (16 bits per Hz) while LTE only provides maximum download speeds up to 300 Mbps (15 bits per Hz) and 75 Mbps uploads (3.75 bits per Hz). Eventually, it is highly likely that operators will upgrade their LTE networks to LTE-Advanced to obtain more spectral efficiency and capabilities. In short, LTE-Advanced will deliver a better user experience with faster speed and more reliable connection.
Recent development
In late June, QUALCOMM, Inc. (NASDAQ:QCOM) delivered the world’s first LTE-Advanced smartphone, the Samsung Galaxy S4 LTE-A, powered by the QUALCOMM, Inc. (NASDAQ:QCOM) Snapdragon 800 processor. Samsung will launch the new Galaxy S4 LTE-A on all operators’ LTE networks in Korea, available to customers in Korea this summer. Galaxy S4 LTE-A will be the first smartphone utilizing LTE carrier aggregation for data rates up to 150 Mbps, offering 2x of what current LTE speeds offer.
LTE carrier aggregation is a significantly new technology, allowing for simultaneous download on two or more LTE radio channels. Snapdragon 800 processors are designed to support LTE carrier aggregation without sacrificing battery life while enabling operators to boost both peak and average data rates. QUALCOMM, Inc. (NASDAQ:QCOM), as a leader in LTE-Advanced, believes that LTE-Advanced is not only about adding small cells, instead, it’s about realizing full benefit of heterogeneous network (HetNet), referring to the use of multiple types of access nodes in a wireless network. QUALCOMM, Inc. (NASDAQ:QCOM) is a main contributor to key LTE-Advanced features and will continue to push forward the development of LTE-Advanced technology.
As for the carrier, SK Telecom Co., Ltd. (ADR) (NYSE:SKM) also announced the launch of the world’s first publicly available LTE-A network with the world’s first LTE-A compatible phone, Samsung Galaxy S4 LTE-A. SK Telecom Co., Ltd. (ADR) (NYSE:SKM) has successfully developed and applied the most-advanced mobile network technologies, including Carrier Aggregation, to commercialize LTE-A.
Carrier Aggregation can support up to 150 Mbps speeds by combining two 10 MHz components carriers to form an effective bandwidth of 20 MHz spectrum bands. While SK Telecom Co., Ltd. (ADR) (NYSE:SKM) plans to expand its LTE-A device lineup to a total of seven smartphones in the second half of 2013, it is reportedly in talks with Apple Inc. (NASDAQ:AAPL) to put its LTE Advanced technology in the upcoming iPhone. While there is no reason for Apple Inc. (NASDAQ:AAPL) not to use the LTE-A technology, as stated by a SK Telecom Co., Ltd. (ADR) (NYSE:SKM) executive, Apple Inc. (NASDAQ:AAPL) might use Korea as the pilot test to explore the marketability of LTE-A technology before expanding it into China.
The takeaway
Carrier Aggregation will be implemented to keep up with the increasing demand for data traffic globally. While SK Telecom Co., Ltd. (ADR) (NYSE:SKM) is offering the LTE-A service without customers paying extra, it will raise the bar for other competing operators. Consequently, more operators will have to evolve and upgrade to keep up with LTE-A offerings. Not only for operators, but for smartphone manufacturers as well, the battle for LTE-A will soon heat up. As for now, QUALCOMM, Inc. (NASDAQ:QCOM), as the top processor provider, is a clear winner for the LTE-A trend, whereas SK Telecom Co., Ltd. (ADR) (NYSE:SKM) and Samsung will enjoy the first mover advantage for now.
The article Where to Invest to Profit From LTE-Advanced? originally appeared on Fool.com and is written by Nick Chiu.
Nick Chiu has no position in any stocks mentioned. The Motley Fool owns shares of Qualcomm. Nick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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