Skip to main content

Mobile World Congress: small cells, big business

One of the big themes at this year’s Mobile World Congress was the integration of multiple radio access standards into a single, seamless wireless connectivity system. Variously called “off-loading” and “small cell”, the idea is to provide mobile device users with seamless access to many different technologies simultaneously, providing a massive boost to quality of service. I visited many of the major vendors at MWC – what follows is a few words on the small cell market.

Wi-Fi has been a growing part of the industry for a number of years, particularly in densely populated countries like the UK and cities like New York, however it has hitherto been a somewhat unsophisticated system, requiring separate authentication and lacking decent quality of service. All that has changed in the last year or so as technologies from the cellular industry, such as beam-forming and handover techniques have found their way into mainstream solutions.

The objective is to create a system that aggregates macro, micro and pico 2G, 3G, LTE cells with WiMax and Wi-Fi networks and switches seamlessly between them based on what the user is doing and the quality of the various connections at the user’s location. For the user, this means they are much more likely to have a high-speed connection available to them when they need. And, as all of this is enabled through authentication based on the user’s SIM, it’s good for mobile operators too

Predictably, Cisco are heavily involved and used MWC to announce what they describe as the first carrier gateway to offer the Next Generation Hotspot (NGH) standards, which enable the integration of small cells into macro networks. AT&T, BT, PCCW (Hong Kong), Shaw Communications (Canada), Portugal Telecom, Smart (Philippines), and TrueMove (Thailand) are trialling this product. Cisco aren’t the only company to get into this game – Aptilo are just one of a number of providers who have been demonstrating SIM-authenticated Wi-Fi solutions for major carriers. In their case, with TeliaSonera.

And small cells are big business. A report published for MWC forecasts that small cells will make up 88% of all base stations by 2015. No surprise that all of the major base station manufacturers are in on the act, and they are now being joined by players coming from the other direction, like WiMax specialist Alvarion, who acquired Wi-Fi specialist Wavion to create a small cell super power.

A word of warning on this technology. It’s success depends very strongly on operators being able to integrate products from many different providers, something that is notoriously difficult thanks to the proprietary nature of some of the technology that the big network manufacturers have built into their hardware. Mobile operators will have to work hard to enable a market where the innovation of smaller companies like Aptila and Alvarion can compete with the scale and installed base of the old guard.

Comments

Popular posts from this blog

Impacts of a handset leasing model on mobile telcos

Following yesterday's post, here's some related thinking on the impacts on operators of handset leasing. Handset sales represent around 25% of operator revenues in a typical European market, but generate only around 5% of margin. It may therefore be the case that the scenario described would lead operators to a more profitable structural model than exists today. Oil companies are consistently and acceptably profitable, despite being (literally in some cases) the ‘dumb pipe’ that operators are so desperate to avoid becoming. One of the reasons for the oil majors sustained profitability is clear focus on their role in the value chain – to supply the fuel that enables transportation, relying primarily on location, then brand and finally product innovation to compete. BP or Shell do not need to subsidise the purchase of a car in order to drive consumption of fuel because consumers are ‘hooked’ on it (it gets them from place to place) and there are many credible car manufacturers an

Value drivers for telecoms retail

I've been doing a really large number of driver trees recently - we've taken to using them on every project to get really into the guts of value creation for businesses and thus decide where to focus initiative development (How To Win, if you're keeping score). Anyhow, I had to pause for thought recently to work out how to represent the subscription aspect of telecoms retail for a client. Since it took me a minute, I thought I'd share... its lack of elegance suggests that its not quite right, although it was enough to demonstrate that there was a certain lack of coverage in the initiatives that my client was pursuing and thus spark a debate. Enjoy.

Chief Strategy Officers II - Career Development

Here's a follow up to my earlier post on the starting point of Chief Strategy Officer (CSO) careers in the FTSE 100 and S&P 500 companies - a visualisation of two steps in their careers: their first employer or job and the job they had before they got their current position. Lots of work went into this... so any insights that you glean from the visualisation would be great to hear about :). The CSO is a crucial strategic role on the executive (!) and the owner of the tone and philosophy of decision making across much of the business, knowingly or unknowingly. Scrutiny of their experience in defining the process and language of strategic management is therefore appropriate not just amongst their executive peers, but in my view amongst shareholders. The days when being very smart and able to analyse large amounts of data were enough to be a CSO are basically gone... has the profession moved on enough to cope?