[NOTE TO READERS: This is Part 1 of a two part post. Please find part 2 here.
At the moment Internet traffic is generated by devices that are connected to the web via radio frequencies, licensed and unlicensed. In quite a few cases the first two hops are based on radio, via Bluetooth or WiFi. When we look at the first feet to few to miles of access, there are basically two competing business models; the volume based model of carrier-licensed spectrum defined by 3GPP, and unlicensed flat fee WiFi defined by IEEE. While the 3GPP model is based on the number of connected devices, and in most cases the volume of data consumed, the WiFi model is based purely on backhaul capacity.
In terms of popularity, WiFi is the clear winner with some 75% market share in terms of overall data volume (including PCs and other SIM-less devices). On mobile only connections, WiFi is steadily creeping up and expected to consume some 63% of all mobile traffic by 2021. But in purely monetary terms IEEE and 3GPP are roughly the same size of business. While the IEEE lives within the world of fixed and cable operators, 3GPP is, at least for now, almost exclusively the purview of pure mobile, virtual and/or converged carriers. Generally speaking they are both complementary (from a consumer point of view) to fiercely competitive on the industry tip. So going into the future, which model is the more likely to win?
IEEE vs. 3GPP
So who’s more likely to take the prize? No doubt but that the industry is entrenched, with WiFi-vangelists and 5G believers alike each singing to the choir. Perhaps the debate itself fails to balance their competitiveness with their symbiosis. WiFi has less spectrum, and LTE much, much more. Add to that 5G (in coming waves of Massive MIMO, mmWave overlays), and we’re talking more indoor and outdoor spectrum by factors. Then again, WiFi is fee, which is hard to beat for most people. And that’s why on popularity scale people may always like the WiFi model better. That said, no one is ever going to put WiFi and mission critical in the same sentence without a “not” in between. So really, one might simply say that if WiFi didn’t have its constraints, there would be no reason for 3GPP to keep hanging on.
And like any good story of siblings at battle, it gets even more interesting with the arrival of yet a new contender; CBRS (Citizen’s Broadband Radio Service). That’s the same “CB” in those good old school dashboard boxes, but in the digital age a new model where these low 3GPP frequencies become available to organizations based on notification – that is, LTE available for public and/or private licensees that aren’t carriers.
CBRS is already a reality in the US and soon to make landfall in Japan, and possibly Germany. This does several disruptive things all at the same time; and we’ll look at this in more detail in the second of this 2 part post. But most importantly, it means we’ll suddenly start seeing local operators serving local customers and meeting their specific, and even hyper-specific needs. Considering the possibility of your very own private LTE network, it’s no wonder it holds a great deal of appeal for the enterprise who appear to be well in the driver’s seat for this trend.
So looking at the big picture, with CBRS on the way, a solid LTE backbone, emerging 5G in many flavors and ever widening free WiFi, we have the best of many worlds coming into the next cycle.
But to some of the bigger opportunities heralded for the next generation of mobility, it’s unclear how quickly telecom will catch up with demand. Industry 4.0 sets a completely new set of requirements for communications and it looks like that telecom operators aren’t exactly champing at the bit to answer them. This should provide a strong motivation for large companies to start their own networks, and again CBRS is a great place to start. To understand the opportunity in historical context, it’s not unlike the early days of the old telcos; a hodge podge of local players serving local needs. That comparison is only skin deep though, as the technology has (needless to say) come a long long way since POTS. So how does one begin to operate their own LTE or 5G network? How do you make sure all of the new features are implemented and what happens when you leave your local area? Certainly, there are no free lunches, but it does suggest a future with a new kind of competition for mobile operators, particularly in the era of massively flexible, virtualized networks.
However it shakes out, it will be interesting to see how much output power and spectrum will be allowed, allotted and used for these kind of new networks. The models employed, and particularly for CBRS will likely reveal the perceived opportunity and threat between government spectrum rental fees, and carriers leaping in to shore up corporate customers at risk of flying the coop. Again, we’ll look more closely at the CBRS opportunity in the next post.
The main thrust here is that air interface options will only become more open into the future, such that we’ll be living in a world where we all access a set of shared radio resources and the real competition in telecom will be relegated to the backhaul. In this future landscape – and we can already see the signs of this – access might be paid for by two or three major brands like Facebook, Google and Alibaba, while fiber is owned by operators and all value is in the applications. Here, in the emerging application-aware network paradigm, each application is allocated optimum capacity to maximize quality of experience. Even this might sound a bit pie-in-the-sky, who in the 80s would have thought that in just a decade and half everyone would be carrying a mobile phone, and today’s tech is moving factors more quickly.
Please stay tuned for the next, companion post, “CBRS – The Great Mobile Disruptor or Your Dad’s DIY Radio Project”