The LTE World

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Fast forward to LTE. Here, the landscape is much more complex due to the fragmented spectrum map that has been allocated to operators globally. In addition to the spectrum bands themselves, licenses in different countries also specify the duplex method in which communication should operate. Two methods exist for this. First, there’s frequency domain duplex (FDD), which is the more popular duplex method for LTE. Second, there’s time domain duplex (TDD), which is used for LTE in China and is the only duplex method used by mobile WiMAX today.

The various combinations of frequency bands and duplex methods pose significant challenges to chip vendors that must also decide how to best balance the flexibility, cost, and performance optimizations of the radio design. This makes the upfront investment for LTE higher than it has been for WiMAX.

As a result, pure-play radio IC companies are becoming reluctant to invest in developing radios for LTE. Therefore, developing a complete chipset including the RF components in-house is becoming a “must-have” for LTE baseband chip companies. This is a significant barrier for gaining a seat at the LTE table, especially where early and growth-stage startups are concerned.

Barriers can become opportunities once they are crossed. LTE chip companies that can offer a complete chipset solution that covers worldwide frequency bands and supports both FDD and TDD have a significant competitive advantage over pure-play LTE baseband suppliers. Arguably, companies with LTE baseband assets will be forced in the near future to divert to a business model of licensing their intellectual property (IP), as it will become increasingly more challenging to sell LTE baseband processors as standalone ICs.