Driving Forces in Wireless Data Communications

New Telecom Quarterly Driving Forces in Wireless Data Communications

Ron A. Haberkorn, Ph.D. and Paul E. Nikolich

Dr. Ron Haberkorn, a principal Mr. Paul Nikolich is an advisory engineer at Steinbrecher Corporation, member of technical staff responsible is working on the design of a public for Advanced Technology Develop- indoor microcell cellular base station. ment for Racal Datacom. He has over Before joining Steinbrecher, he initiated 15 years experience in the communica- a wireless communications program at tions industry developing technologies, Racal Datacom, Inc. He spent several products, and standards. His interests years at Mitre Corporation where he are focused on the development of headed up the Advanced EHF Satellite emerging local loop access technolo- Terminals project. From 1980 to 1985, gies such as wireless, high bit rate Dr. Haberkorn was at the Francis Bitter subscriber lines, and, most recently, National Magnet Laboratory at MIT CATV modems and their interface to where he helped set up the Magnetic customer premise LANs. He is actively Resonance Imaging (MRI) Center. Dr. Haberkorn received his involved in the establishment of LAN data communications Ph.D. from MIT for his thesis on solid state nuclear magnetic standards as the vice-chair of the 802.3 (Ethernet) working group of resonance (NMR) spectroscopy. He completed an MSEE degree the IEEE’s Project 802. Mr. Nikolich received his B.S. and M.S. from Boston University in Communications and Signal Processing degrees in engineering from Polytechnic University in Brooklyn, New York.

he objective of this paper is to present an end-user requirements. The regulatory and standards overview of the driving forces which affect the environment will be discussed next, as it is a funda- Twireless data communications industry. This mental force which defines many of the services which effort will concentrate on several applications and can be made available to the end users. relate them to some sample markets. The market A general market profile will be presented which driving forces will be identified and discussed. This will include a discussion of several major applications work will focus on wide area network (WAN) applica- for wireless data communications technology. Some tions for which wireless data communications provide examples of significant industries which can make use suitable solutions. In particular, this article will of these applications will be discussed and character- concentrate on terrestrial radio-based systems and will ized. The market will be further characterized in terms only touch briefly on satellite systems. of the equipment and service providers. The capabili- The field of wireless data communications is very ties delivered to the end users is highly dependent on broad and, in the short space available, only a very the types of services available, as well as the equip- small segment can be adequately addressed. As a ment needed to implement these services. result, local area networks (LANs), while a significant Finally, the future trends in the market will be market in their own right, cannot be addressed. It is summarized, and the forces which seem to be shaping hoped that this article will provide a concise yet it will be identified and discussed. thorough overview of the WAN market and the The wireless data communications market has corresponding forces which are shaping its future, been shaped by a number of independent forces particularly in the United States. (shown in Figure 1) which have come together to form We will first put this work in context by presenting the market as we know it today. These forces will a general overview of wireless communications. This continue to operate and will affect the market to will include an overview of the technologies which differing degrees in the future. First and foremost, enable the services and equipment features that satisfy there exists an end-user community which has both

Business and Personal Needs Technical Capabilities - Mobility - VLSI and Microprocessors - Access to Information - Networking Technology - Widespread Use of Personal Computers - Cellular System Engineering - Increased Dependence on Networking - Digital Signal Processing - Business Value to Having Network - Integration of Wireline and Wireless Services

Wireless Communications

Enabling Regulations Standards - Spectrum Availability - AMPS, CDPD, IS54, IS95 - Competition - GSM, DECT, TAC, NMT - Mobitex

Source: Haberkorn & Nikolich business and personal needs for untethered communi- this medium are just now starting to evolve. This will cations. This community has arisen because of the lead to explosive growth in the use of wireless net- almost ubiquitous reliance on personal computers for works for data communications as part of the wide- almost all aspects of business life, as well as an spread usage of copper, fiber, and wireless media for increase in the use of the PCs at home for everything the delivery of data and telephone services in devel- from maintaining personal finances to education and oped countries. entertainment. The increased sophistication of the With the deregulation of the telephone industry, in data communications between computers has made particular in the United States, and because of increas- many tasks trivial and even automatic, tasks which ing demand for wireless data services, regulators have were, only a few years ago, laborious and demanding had to develop regulations which encouraged and of a great deal of precision. This has led to similar even mandated a competitive environment as new applications being carried farther and farther afield, spectrum was allocated for these services. In addition, with the net result that the end users are demanding new standards are being developed which will further networked capabilities away from the office as well. encourage competition for services. However, in some The demands for this increased mobility now require a areas, such as the United States for example, the tetherless connection for much of the communications. proliferation of standards and proposed standards has The technologies which have enabled manufactur- caused some consumer confusion with a resultant ers to realize these capabilities are the same technolo- damping effect on the market. In Europe, the Global gies that have driven the computer and communica- System for Mobile Communications (GSM) standard tions industries for the past several decades. These should have the opposite effect and increase the include advances in Very Large Scale Integration market. (VLSI), microprocessors, digital signal processing, and networking protocols and software as well as new Wireless Communications Overview developments in cellular radio system engineering. In Figure 2 illustrates an overview of the various addition, the integration of wireless communications wireless services either currently available or planned with the Public Switched Telephone Network (PSTN) for the near future. These services can be broadly and the development of methods for sending data over classified into two groups based on whether or not the

Page 40 1Q96 New Telecom Quarterly services are provided by satellite. Satellite services are large number of users that the cellular systems can. generally provided by spacecraft in geosynchronous The forces operating on private radio systems are orbit. These consist of most of the wide area paging different than public radio systems such as cellular. services as well as the INMARSAT and VSAT type of For example, the initial fixed cost is important when services. In addition, there are all the broadcast and considering investing in a private system, whereas telephone trunking services which are currently operating cost dominates the cellular investment provided. Low earth orbit satellites are just now analysis. starting to be fielded, and they will certainly provide In Figure 3, an overview of the infrastructure some interesting communications services. needed for wireless data communications is shown. There are a number of providers of wireless local Common to each of the technologies is the require- area networking (LAN) equipment that end users buy ment for a modem capable of broadcasting at the and operate. These systems generally have ranges of appropriate frequencies. For the case of cellular less than 500 feet and are generally confined to small infrastructure, protocols used with these modems must areas such as buildings. The data rates obtainable be capable of accommodating the frequent signal from these systems are typically much higher than the drop-outs which are experienced on these channels wide area network systems; certain implementations with a mobile platform. The cellular phone communi- attain bit rates in excess of one Mb/s. cates with the base station, which is connected to the The wide area services can be divided into two mobile telephone switching office (MTSO) via wire sectors which have different forces operating on them. line. These MTSOs are responsible for managing the Private radio networks operate in a non-cellular connections with the base stations and for the connec- environment. Therefore, without the high degree of tion to the PSTN. Cellular Digital Packet Data (CDPD) spectrum reuse typical in cellular systems, private radio systems operate similarly except that, since this is a networks do not have the ability to accommodate the

Figure 2 Overview of Wireless Data Communication Services

Terrestrial Wireless LANs - Radio - Infrared

Private Packet Networks -Ardis, RAM Mobile Data, Paknet Specialized Mobile Radio - Nextel, Racotek Private Radio Paging Services - POCSAG Networks Wireless Data Circuit-Switched Cellular Public Services - Any Cellular Provider Packet-Over-Cellular - Any CDPD Provider Switched Telephone Personal Communication - Emerging Service Providers Services

Satellite Geosynchronous Orbit Unidirectional - Paging Services

Bidirectional - INMARSAT, VSATs

Low Earth Orbit - Orbcomm, Iridium - Emerging Services

Source: Haberkorn & Nikolich

1Q96 Page 41 Figure 3 Overview of Wireless Data Communication Infrastructure

Laptop Satellite Modem

Public Switched Telephone Network Ground Station Modem &Cellular Laptop Phone

CDPD Network Base Station CDPD Modem Laptop Mobile Telephone Switching Office Private or Public Data Network

Laptop Packet Radio

Base Station Source: Haberkorn & Nikolich packet protocol, the data is handled differently at the REGULATORY MTSO than normal voice cellular signal. The national and international regulatory bodies The packet radio services such as Ardis and RAM (ITU–R Radio Regulation Board) have the biggest Mobile Data require that the appropriate modem is effect on the wireless market for WANs. The laws and attached to the portable computer or other data device regulations which are put in place by these organiza- so that the air link can be established to the base tions are mandatory, and failure of a service provider station. The data routing is then accomplished over to adhere to them can result in punitive sanctions. the service provider’s data network, and the data is These bodies allocate the radio spectrum which must delivered to the customer’s end site. Satellite commu- be used and regulate the operational parameters such nications operate in much the same way except that as power limits, bandwidth, etc. These are the basic the satellite serves as an intermediate relay point. In resources for wireless data communications, and they the case of INMARSAT, connection can then be made define fundamental limits on the capabilities of the to the PSTN. Other satellite systems can go directly to system such as capacity, data rates, and channel the user equipment from the ground station. availability, as well as the growth of the systems. The current trend by many regulatory agencies, Regulatory/Standards Environment such as the Federal Communications Commission (FCC) in the United States, is toward allocating spec- The regulatory environment is governed by the trum in such a way as to encourage or even mandate four basic classes of standards and regulations as shown in Figure 4.

Page 42 1Q96 New Telecom Quarterly

Figure 4 affect the number of base stations required as well as the number of subscribers and the data throughput Four Classes of Standards and Regulations which can be supported. Regulatory Laws OFFICIAL STANDARDS Mandatory The purpose of the various national and international standards bodies such as the International Official Consortia Standards Organization (ISO) or the International Standards Open, Informal Telecommunication Union (ITU) is to sanction the Open, Formal Voluntary various standards which guarantee the interoperability Voluntary of equipment regardless of manufacturing origin. These standards are publicly-available formal docu- Proprietary ments, but generally adherence to them is voluntary. Closed In many cases, it is the consumer who demands Formal & Informal adherence to these standards in order to be able to use his equipment among several service providers. Source: Haberkorn & Nikolich Examples of these types of standards published in the United States under the auspices of the American competition for wireless services. This has had a National Standards Institute’s (ANSI) Telecommunica- beneficial effect for the consumer in that pricing for tions Industry Association (TIA) body are: analog cellular services has become very reasonable. The biggest disadvantage is that, because of the • The Advanced Mobile Phone Service (AMPS) intense pricing pressures, service providers will most standard for cellular service. likely not be profitable for many years until there is a • The Time Division Multiple Access (TDMA) stan- much larger customer base. dard, IS54. The spectrum allocated for cellular telephony and • The Code Division Multiple Access (CDMA) stan- packet radio in the United States is in the 800 MHz to dard, IS95. 1,000 MHz radio band. To encourage competition, the FCC has divided the cellular spectrum into an “A” In Europe, an example of this is the GSM standard spectrum and a “B” spectrum. The same service for digital cellular telephony. Formal standards are provider is not allowed to have a license for both the continually being developed, e.g., the Joint Technical A and B spectra in the same trading area. Therefore, Committee (JTC) PCS air interface standards currently the FCC has guaranteed that, for every trading area, in development in the United States. there will be two service providers for cellular telephony using a common standard. CONSORTIA The 1,850 MHz to 2,200 MHz band has been Consortia are formed by groups of equipment or allocated for Personal Communication Services (PCS) service providers and generate open standards not and is currently being auctioned off in the United sanctioned by any of the standards organizations. States by the FCC. Similar rules will apply to this band Therefore, these standards are informal documents and to ensure that there are multiple service providers in adherence is voluntary. Once again, the consumer is each service area. However, the FCC has not man- the main driving force for adherence to these stan- dated any standard, preferring instead to let the dards. Examples of these types of standards are the marketplace decide on the most advantageous tech- Cellular Digital Packet Data (CDPD) standard which nique. was generated by the CDPD Forum or the Mobitex The magnitude of the radiated power is also standard which is maintained by the Mobitex Opera- limited by the regulatory agencies for both safety tors Association. reasons as well as to control the interference between neighboring transmitters. Power constraints have the PROPRIETARY effect of limiting the maximum data rates as well as the Proprietary implementations are generally not distance from the base station over which effective publicly available, but are developed and maintained communications can take place. These factors directly by equipment or service providers. This type of

1Q96 Page 43 standard is more prevalent in the wireless LAN arena The issues related to each of these requirements where the customers are not so concerned with are heavily dependent on the type of application the interoperability of equipment from many manufactur- end user is trying to implement. These applications ers. These systems operate within the allocated radio can be classified into the following broad categories: spectrum and within the prescribed limits of power, bandwidth, etc. • Electronic Messaging and Dispatch. • Transaction Processing. Market Forces • Remote Data Access. • Remote Monitoring. According to John Mazzaferro of JAM Enterprizes, the size of the wireless data communications market is Table 1 attempts to map these market types into currently at about $2 billion in total revenues. It is various vertical markets and to identify the key end expected to grow at greater than 50% per year and is user requirements which will drive the use of wireless expected to reach over $7.8 billion by the year 1999. communications for these applications. This includes the revenues from all data services and Electronic Messaging and Dispatch. Typical equipment, including satellite revenues which is about markets for this application are messaging and paging 25% of this market. Other market surveys predict services, as well as dispatching service personnel such anywhere from a factor of three to six growth in the as field service or package delivery services. Charac- wireless communications market by the year 2000 from teristic of these applications is the need for personnel the 1993-1994 levels. Another observation which in the field to receive small amounts of information indicates that the wireless market is poised for an periodically such as service call assignments, rerouting explosive growth is the fact that, in the United States, instructions, etc. In some applications, the area which there were more new cellular subscriber lines initiated needs to be covered is extremely large, spanning than wire subscriber lines in 1993. The question now continents or oceans, and for these cases, satellite is what forces will shape the future of this industry. networks are usually the most logical choice. How- The wireless data communications market can be ever, the messaging and dispatch applications still broadly divided into four segments: account for almost half of the cellular and the packet radio markets. • End users. Transaction Processing. This market centers • Equipment manufacturers. around applications such as easily relocatable point-of- • Service providers. sale terminals where the terminal accesses a central • System integrators. database in frequent short messages to complete a transaction such as credit card verification. For these In many cases, a single company may perform the applications, security is one major consideration. The functions of several segments. Each of the segments applications themselves are usually routine and has their own unique set of driving forces. therefore lend themselves to a high degree of automa- tion. This results in a simple convenient user interface. END USERS Systems such as the Paknet X.25 Radio Data Network Each of these segments is highly interdependent are needed to satisfy these requirements. but, ultimately, the end users’ needs must be satisfied Remote Data Access. The market for the remote at an affordable price in order for the market to data access application is field service personnel who develop successfully. The principle requirements need access to databases of repair manuals, the which must be met to satisfy the end user’s needs are: executive who demands access to his office computer while on travel, etc. This is a major growth area for • Coverage. wireless communications, as the technology and • Convenience. infrastructure are just now reaching a level of maturity • Capacity (number of users). to support these markets The utility of these applica- • Cost. tions is the access provided to the personnel to very • Reliability. large databases and timely access to databases that • Speed. have frequently-changing information. In addition, • Security. there is growing interest in leveraging the skills of • Safety.

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Table 1 Comparison of Market Types, Vertical Markets, and End User Requirements

Market Types Vertical Markets End User Requirements

Electronic Messaging and Dispatch Field Service Low Data Rate Emergency Services Low Duty Cycle Package Delivery Services Wide Coverage Area Shipping Convenient to Use Trucking Reasonable Cost

Transaction Processing Point-of-Sale Small Amount of Data per Transaction Credit Card Verification Infrequent Access Banking High Security is Mandatory Toll Collection Convenient to Use Low Cost

Remote Data Access Telemedicine Fast Data Transfer Executive Send/Receive Images Field Service Access to Repair Manuals/Documentation Sales Access Price/Availability Data Insurance Adjusters Place Orders at Customers’ Site Real Estate Convenience is Major Issue Reasonable Cost

Remote Monitoring Traffic Low Data Rate per Site Pipeline Potentially Large Number of Sites Utility Meters Essentially One-Way Communications Large Coverage Area Low Cost

Source: Haberkorn & Nikolich highly-trained personnel at remote locations such as in the cost of personnel or the tariff structure of the local telemedicine. In this case, even imagery will be public phone carrier. transmitted from the remote location. This is a severe technical constraint as the power which can be Equipment Providers transmitted must be limited for safety and interference As can be seen from Figure 3, for the wireless reasons, and therefore the distance will be limited. system to be useful and operate properly, several types Remote Monitoring. Remote monitoring applica- of equipment must be in place together with the tions have typically infrequent, low data throughput associated application software. The manufacturers of requirements but are difficult to access. Examples of these items can be broadly classified into three classes: this are pipeline monitoring, gas and electric meter reading, etc. The monitoring of sites located in remote (1) Base Station/MTSO Equipment. access environments is probably best addressed by (2) End User Equipment. satellite technology; however, even within urban (3) Application Software. environments, there could be efficiencies obtained by monitoring utility meters at homes via a wireless The base station and MTSO contain all the equip- network. The principal driving force for this applica- ment needed to communicate with the end user and to tion will be the cost of the equipment compared with

1Q96 Page 45 perform the switching functions needed to route the SERVICE PROVIDERS data to the other wireless users or to the wireline As indicated in Figure 2, service providers fall into infrastructure. This equipment represents the largest two main categories: cellular services providers and investment that a service provider must make in order packet radio network providers. The packet radio to provide wireless communications services. As the network providers, for the purpose of this discussion, coverage area is increased or additional subscribers are are the system operators like Ardis and RAM Mobile added, in general, more equipment must be purchased Data. This distinction is more historical at present and the costs recovered through user fees. For a since cellular providers are also beginning to offer private radio network, a single user shoulders the packet services. Ardis and RAM Mobile Data each entire burden of this cost for his service. The cost of own a portion of the spectrum in the United States, this equipment is a significant driving force behind the and they have optimized their systems and pricing development of new protocols which either allow the structures to satisfy end users with short bursty com- use of less expensive equipment and/or allow the munications requirements. same equipment to accommodate more subscribers. Cellular providers, however, based their data A good example of this is in the United States, services on circuit switch techniques as this fit in well where cellular carriers are considering the use of two with their voice service offerings. With the increased digital alternatives to the current AMPS system. These interest among end users for wireless data and the are the TDMA standard and the CDMA standard. The anticipated explosive growth of this market, cellular predictions for TDMA indicate that, for a very modest providers are adapting their systems to more easily investment, a single AMPS channel can accommodate accommodate data communications in a cost-effective at least three times the number of subscribers and manner. perhaps as many as 10 times the number. Similarly, CDPD efforts are geared to transferring data in a CDMA proponents are making claims of at least a 10- packetized manner over the existing AMPS infrastruc- to 20-fold increase in the number of subscribers that ture, and this will certainly compete directly with can be supported. Each system is currently being private radio network operators. In addition, there tested in various areas of the United States, and the have been some discussions to incorporate data results will certainly influence the purchase of large service features in the new TDMA and CDMA stan- amounts of equipment. In addition, the emerging PCS dards. This could have the effect of taking customers broadband CDMA market will offer further opportuni- away from private radio network providers. This is a ties for equipment vendors, as an entire infrastructure key driving force for cellular data communications, as still has to be built. it will significantly impact the rate structure which the The trend in end-user equipment is for smaller, cellular service providers must establish in a way that lighter weight for ease of carrying, better power will make it more cost effective for the end user. efficiency for longer battery life, and lighter weight batteries, as well as easy push-button operation. In SYSTEM INTEGRATORS addition, the trend is toward higher levels of integra- Certainly in the near term, a system integration tion of all end user equipment. For example, by the facilitator will be a necessity for the end user. The turn of the century, laptop computers will doubtless market for wireless data services at the present time is have integrated wireless modems which can be used very confusing, and the integration of the end user’s on several systems. Many pundits have predicted that application with the wireless service is not straightfor- the personal digital assistant will become ubiquitous ward. The extent to which this is provided by service and will include all personal communications, both providers and equipment manufacturers or software data and voice, integrated in a single pocket-size unit. developers will greatly affect the rate at which wireless Whether or not this level of integration is ever services are adopted by the end users. achieved, it is certainly true that end users will only use wireless data communication if it is convenient Summary and useful. This means that a significant driving force The market forces driving the expansion of the for the use of wireless data communications is to have wireless data communication industry are ultimately a well-integrated solution for whatever data device is the end users’ desires to make their organizations needed for the particular application. more efficient and to offer new or enhanced services

Page 46 1Q96 New Telecom Quarterly for the lowest price possible. As illustrated in Figure 5, currently under development. This will cause con- the market is expanding because end users see sumer confusion and will also require, at least for the opportunities to make their own product offerings near term, different modems depending on what more efficient, to expand into new areas with en- service area the user is in. hanced products, and to make better use of their The cost of end-user equipment will continue to personnel for more efficient operation. The opposing decline as the applications become better defined. forces are the high cost of equipment, the limited This will occur through the use of higher levels of resources of the radio spectrum, the cost of providing integration, and the ability to adapt to multiple proto- these services, and the pace at which new application cols. Also, as the market expands, the cost of equip- software can be written or existing application soft- ment will be further reduced due to increased produc- ware can be modified to take advantage of wireless tion volume. Initially, the multiple protocols will be a communications media. For example, as the cost of hindrance, but eventually modems will be developed equipment and service is decreased, the market will that will be able to transparently adapt to whatever expand as it becomes more cost effective to deliver protocol is supported by the service provider in the new and enhanced services. area. The driving forces which will reduce the cost of Applications programs are potentially the biggest services are affected by current efforts to increase the driver. These will ultimately define the degree to capacity of the systems through more efficient use of which wireless data communications are useful to the spectrum (i.e., TDMA, CDMA, and CDPD development end user. In particular, there will doubtless be one efforts), decreasing the costs associated with the “killer application” which causes rapid market expan- purchase and operation of the base station and MTSO sion. The result of this will be to make it cost effective equipment, as well as the increased amount of spec- for other applications to take advantage of the wireless trum which is becoming available (i.e., the PCS media, further increasing the market. There has been spectrum auctions now occurring in the United States). much speculation on what this “killer” application will One force which may be impeding the market expan- be, yet, to date, it remains to be defined. sion in the United States is the number of protocols

Figure 5 Wireless Data Communication Market Forces

Cost of End User Cost of Services Equipment - Throughput limitations - Miniaturization Enhanced Affordable - Capacity limitation - Integration with User I/O Product Offering Services - Cost of Base Station - Multiple Protocols and MTSO Equipment - Ease of Use Wireless Data - Additional Spectrum Communications Market

Better Product More Efficient Delivery Operations

Application Software Development - More Efficient Use of Wireless Media with Current Applications - New and Enhanced Features to Make Business/Operation More Efficient

Source: Haberkorn & Nikolich

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