The rise of mixed mobile networks of Wi-Fi, small cells and traditional base stations, a major theme of this week's Mobile World Congress in Barcelona, may change the competitive landscape of both service providers and equipment vendors.
Numerous infrastructure vendors, including major suppliers such as Alcatel-Lucent and Ericsson as well as smaller and newer players, introduced small base stations for use inside buildings and in outdoor spaces that are dense with cellular users. These will complement the traditional macro cells typically found on cell towers and roofs, which can cover entire neighborhoods.
Though carriers have used smaller radios such as picocells in the past to aid coverage indoors, those have been relatively expensive, specialised devices, planned and installed by carrier engineers, that often use an in-building DAS (distributed antenna system). The new generation of base stations, including femtocells already deployed in many homes, are intended to be less expensive and closer to mass-produced consumer electronics. Wi-Fi is also poised to play a bigger role in mobile networks, both in hybrid small cells and through new standards for making access points act more like cells.
Like other new technologies, going back to the Internet and cellphones themselves, these small network elements and tools for making better use of them could disrupt both the network gear business and the market for mobile services, according to analysts and some in the industry. More competition should mean more options and lower prices for service providers, and ultimately for consumers. But there are constraints on new players, and it's too early to know how successful the emerging players may be.
The Small Cell Forum, an industry group promoting femtocells and other new types of network-edge equipment, envisions a small-cell industry that would look more like the Ethernet LAN ecosystem than current cellular infrastructure business. The Forum has published APIs (application programming interfaces) that define consistent interfaces between the components of small base stations.
A shift from macro to the small cell
Today's macro base stations tend to be specialised designs rather than standard hardware made from common types of parts, said Simon Saunders, chairman of the Small Cell Forum. Likewise, the established vendors of cellular equipment often use their own interpretations of standards for signaling between the components of a network, he said. That model needs to change because smaller cells need to be made in larger numbers, at a lower cost.
"Macro cells only get produced in their tens or hundreds of thousands, and right from the beginning, we've known we needed to add triple zeros to that in the world of femtocells," Saunders said. "It becomes proportionally more important to take the steps to allow reusability of parts."
But it remains to be seen whether this type of revolution will take hold, said Mark Bole, CEO of cellular filter maker Mesaplexx, who has built up several wireless startups.
"When it's a paradigm shift that's happening with a shift to the small cell... it creates an opportunity for new players," Bole said. "How will it play out in the long term, where will the scale benefits really come through, that's the interesting part of it.
"It creates an opportunity, but can that opportunity really be seized by the new players?" Bole said.
Even if small cells are built around interoperability standards, the pervasiveness of traditional macro cells from the big vendors may turn compatibility with that older gear into a gating factor for startups after all, said Gabriel Brown, an analyst at Heavy Reading.
The new prospect of using Wi-Fi as a more integral part of mobile operator networks may also open the door to new players. Vendors both large and small, including Cisco Systems, Ruckus Wireless and ip.access, introduced products designed to use the Hotspot 2.0 specification. Hotspot 2.0 is an open standard for making Wi-Fi hotspots available without the need to enter usernames and passwords, and to help users roam from cells to hotspots seamlessly.
Weaving wi-fi into traditional networks
Ruckus, a specialist in Wi-Fi for large venues and service providers, debuted as a provider of hybrid access points with both cellular and Wi-Fi, and of equipment for managing cellular networks. And though Cisco already sells a mobile packet core product, the growing role of Wi-Fi could make it a more significant player in mobile operator networks even without selling cellular radios itself.
However, established vendors including Ericsson and Alcatel are also integrating Wi-Fi themselves, unveiling strategies and products at the show for the heterogeneous networks that carriers are expected to start building.
Better integration of Wi-Fi into mobile networks may also open doors to new competitors to the established carriers. Dennis Steiger, CTO of Shaw Communications, sees new competitive potential in mobile through Wi-Fi. The cable operator in western Canada plans to build an extensive network of Wi-Fi hotspots using Cisco gear and participate in a trial of Hotspot 2.0 using Cisco's service-provider Wi-Fi products.
Though Shaw originally planned to bring its customers mobile services through a traditional macro cellular network using LTE, it later decided that Wi-Fi hotspots, with a lighter overlay of LTE, better suited its subscribers' mobile needs, Steiger said.
Shaw is already discussing possible roaming agreements with mobile operators, which could weave its Wi-Fi network in with widely available mobile services. Subscribers to established mobile carriers are likely to see more Wi-Fi sites opened up to them, offering opportunities to save money or hold off data caps by offloading their activities from the cellular network.
However, those opportunities will probably come mostly in the subscriber's own country. Even a technology revolution is unlikely to make international data roaming cheap or free, at least for now, said Ovum analyst Daryl Schoolar.
"There's a lot of money in that roaming stuff," Schoolar said.