Despite the fact that the report was commissioned by Skype, a major player in the personal video conferencing market, the arguments and numbers presented in the report make perfect sense. What backs this claim is the forcast made by Cisco that video will account for 91% of Internet traffic by the year 2013. No wonder why Cisco recently acquired Tandem for $3 billion.

Because HQ and HD video traffic require a consistent high bandwidth (> 500 kbps), wireless operators will be faced with a dilemma: loose money or sacrifice QoS.

The ONLY way for wireless operators to avoid this dilemma is to increase the cell capacity beyond what is minimally required by 4G standards. The use of MU-MIMO (multi-user MIMO) will be a must. What this means is that operators have to seriously think about installing basestations with high number of antennas. As of today’s date there is no commercial basestation with more than 4 antennas.

This represents a business opportunity for a young wireless start-up. The key to success is to target very high number of antennas so that a sufficient increase in cell capacity is achieved. A BS with 16 antennas will provide a 4x increase in cell capacity compared to the one that has only 2 antennas (i.e. simultaneously serving 8 users versus serving only 2 users, respectively, assuming that each user has two anntenas).

The second article discusses the fact that the lack of a proper scheduling algorithm that is suitable for 4G may hinder the expected performance and consequently user experience. This demonstrates that we still have a long way to go before we can have a reliable 4G network. My fear is that in their rush to compete for market share operators may end up doing more harm than good when it comes to promoting the use of their newly installed 4G mobile network. If the end user has a bad taste for 4G repairing the damage may not be possible.

The end user needs to be able to surf the Internet reliably, to stream audio and video efficiently while paying the lowest price possible. The promotional headlines highlighting the fact that 4G will provide 100Mbps data rates is of no meaning to most consumers.

In my opinion, providing a reliable network access for HD video streaming, HD live TV and two-way HD video conferencing will be the main challenge for operators as the demand for these services is on the rise while compression technologies have reached their theoretical limits.

For 4G to be a success operators have to meet the above consumers’ expectations while managing to make an acceptable ROI.  Despite the bandwidth efficiency of OFDMA, as is used in LTE and WiMax, making money will be a huge challenge if QoS needs to be maintained at an acceptable level. This is because a substantial percentage of subscribers in a typical cell will either be streaming HD video or will be having a two-way HD videoconferencing session.

For the technical folks out there, let us remember that the advertised 100Mbps rate is a peak over-the-air data rate. What that means is that the average user will experience much less effective rates. This is fine if the majority of users are only surfing or talking, both of which are either bursty in nature (i.e. surfing) or requires very low data rate (i.e. voice) .

Will beyond-4G technologies such as LTE-advanced will be the answer? Only time will tell.