Sometimes wider market forces have a greater effect than purely technical or cost developments. Rich Lee, CEO of iPosi, believes we are about to witness the dawn of a new era, driven by the wider and larger needs of smartphones and spectrum.
A seismic business
Cellular networks invest heavily in four main areas:
- - Acquiring spectrum rights, often raising tens of billions at auction
- - Building out towers and basestations
- - Subsidising smartphones
- - Back-office and admin, from retail stores to billing systems
It’s easy to focus on one particular aspect and overlook what’s happening in other areas. Small cell technology promises to deliver high capacity at low cost, by commoditising the basestation. This is particularly important when most traffic is consumed in-building, and where larger numbers of small cells will be needed to meet increased capacity demands.
Smartphone shipments peak in 2018
The smartphone business has been an enormous success. Apple has grown to become the largest public company worldwide, with a market cap of $530 Billion, and cash position of over $200 Billion. Apple’s annual revenues of $233 Billion far exceed that of any mobile network operator. About 60% relates to iPhone sales.
But the number of smartphones shipped is forecast to decline after peaking at 1.9 Billion in 2018. These ubiquitous devices will continue to be popular, but users will need good reasons to upgrade to the latest models.
The walled garden of spectrum is being opened up
Cellular networks worldwide have been allocated exclusive use of spectrum, often in return for eye-watering amounts of money. While this raises revenues for government treasuries, it effectively taxes end-users through higher cellular charges.
Unlicensed spectrum used by Wi-Fi doesn’t have this cost and has been exploited for residential and enterprise data access. We’ve seen more industry self-criticism around Wi-Fi recently, particularly around interference issues. Some of the more “aggressive” spectrum occupiers brands are taking over from other models with more ”timid” WiFi access algorithms. This was originally a criticism of LTE-U co-existence with WiFi, with concerns that it would exert a Darwinian dominance over unlicensed bands. Fact is that both LTE and WiFi have substantially more to gain co-existing than becoming winner-take-all. LAA and MulteFire as adjuncts to LTE-U should also resolve those concerns.
Rich believes that access points will evolved into “All Purpose Access” points (APA), inherently broadband, inherently and supporting a wide range of spectrum including licenced, unlicensed and shared. These would be Wi-Fi 802.11 LTE oriented to share network intelligence, channel state information, sync, location and spectrum measurements. He believes vendors will implement combined APA solutions
Shared spectrum opens up neutral host opportunities
While LTE has made available a considerable number of frequency bands and modes, all of these are assigned on an exclusive basis to an individual network. LAA and MulteFire introduce operation in unlicensed spectrum, either augmenting licenced or operating independently.
Shared spectrum at 3.5GHz, as proposed for the US CBRS band, opens up a radical new commercial model. Each building will be allocated its own dedicated resource from a central Spectrum Access System (SAS). iPosi technology augments the SAS with calibrated measurements of interference so granular that is resolves interference within each building, ensuring better protection for existing, “legacy” users (such as naval, commercial radar systems, and satellite earth station broadcast) while enabling wider use with greater confidence of the impact.
We think that once the principles of shared spectrum are commercially proven in the US 3.5GHz band, the concept will be widely deployed globally and potentially extend in reach to many other frequencies between 1-6GHz, where there is still ample spectrum to reach 5G goals.
Neutral Host is one key
What is impeding more rapid deployment of in-building small cells today is the lack of industry, so-called “neutral host” solutions. This could be achieved with both compatible smartphones and shared spectrum that doesn’t conflict with any individual operator’s own spectrum.
We’re seeing a growing consensus in the US behind the 3.5GHz band, being promoted by vendors such as Qualcomm and not being opposed by network operators. This would enable independent neutral host companies to consolidate cellular service from in-building systems and route traffic directly to multiple operators.
DAS was a technology that enabled this vision but has been “tapped out”. It’s just not economical, nor does it offer requisite intelligence and bandwidth. It is much too expensive for most buildings housing the vast majority of enterprises and urban residences.
Enterprises want to take more control of their own space and are prepared to pay for it. We’ve seen that happen with Wi-Fi and if the costs are manageable, then will happen for LTE.
Network operators won’t complain – they effectively get good indoor service without having to pay for equipment or installation costs, and they are served using the same secure LTE technology already used in their native networks. They will want some visibility of the RF design with an approval cycle for each installation, but will build up trust and confidence with installers as experience grows.
Implications for the smartphone and small cell industry
Smartphones don’t yet support the new 3.5GHz band today, even though outside the US Japan and other Asian countries are adopting the new 3GHz band for short range, high density communications. This capability (and LAA/MulteFire) will provide another good reason to upgrade smartphones.
This would be good for the entire supply chain, including smartphone chipset vendors. Since operators won’t be funding the in-building infrastructure, it may lead to the mobile devices, not only the network equipment to spawn the eco-system to encourage wider take-up.
This naturally would also lead to wider take-up of in-building small cells, and the associated services for installation and operation including third party neutral hosts and spectrum sharing solutions.
Over the next ten years, Rich thinks it entirely feasible we’ll see deployment of some 300 million “All Purpose Access” points especially within the G20 nations, compared with some 100-120 million installed base of conventional Enterprise Wi-Fi only access points today.