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Verizon CEO Ivan Seidenberg this week tried to put it to the cable community that they are in trouble from LTE. He to stood up this week at an investor conference and said that there would be some LTE-cable substitution “on the margin,” as a modest substitute for in home cable broadband. Now how would that work exactly and is Seidenberg being a bit far-fetched?

Well yes, and then again no, because it’s more complicated than you think, and additionally there are two other issues here, one that Seidenberg is expected to retire in two years, so he won’t be held to his predictions. Also that over the past ten years cable has done so much damage to Verizon in terms of forcing it to invest in fiber and as part of the reason for Verizon losing so many fixed voice lines, that you can’t really blame him for trying to get back at it.

But the bald facts of it are pretty simple. Currently the LTE specification allows for 100 Mbps downlink rates and about half that as an uplink in a single 20 MHz spectrum slice. What that means today the way cellular networks are built, is that a single Macro base station, designed in much the same way as it is today, will be able to serve perhaps 50 people concurrently (a sensible average for those using data), which would offer around 2Mbps to each of them, which takes us back to where fixed line broadband was 5 years ago. How is that going to man up against cable with its potential for DOCSIS 3.0 offering 150 Mbps and beyond? It won’t.

Even when 4 x 4 MIMO antennas are commonplace in devices, this will probably only increase about 3 fold, and two by two antennas will be about a 2 fold increase, so 200 Mbps, let’s say 3Mbps or 4 Mbps each at best and the more people using data concurrently in any given base station, the less each gets.

But right behind LTE comes LTE advanced, and to get an idea of implementation schemes, LTE reached a standard in early 2008 and LTE advanced is close to a standard and may reach one in the next few months, so it sits around 3 years behind it. Does that mean that it will be implemented 3 years down the track, after LTE? Well again it’s complicated. Probably, because all equipment being built now can likely continue to be used on LTE Advanced.

The fundamental step is really simple. If everyone gets a base station in their home, like a low power femtocell, then everyone can have 100 Mbps bandwidth to themselves or with 4 x 4 MIMO maybe 350 Mbps. Because spectral efficiency today is close to its theoretical limits LTE Advanced is expected to simply sound out a new topology which is not so different in spectral terms from how WiFi works. It IS different in that services can be more easily guaranteed, because it is licensed spectrum and it has all the concerns about roaming. If you have more and more radio cells, you have to backhaul each of them and you have more and more cell edges.

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