In the ongoing discussion about how carriers can keep up with their customers’ speed and coverage requirements, a larger question is being neglected: How do they pay for all of the new technologies and capabilities required to address those concerns?
Operator pricing reflects the cost structure of core networks, including 50,000-75,000 cell sites for a national carrier in the US and lots of spectrum. This model served the carriers well through the migration to 2.5G and even through the early stages of 3G. Yet, with 3G, the new generation of data-hungry smartphones started showing their impact, best demonstrated by some of the early issues for AT&T’s network after the iPhone’s launch in 2007.
A realization started taking hold that a new way of deploying networks will be needed to keep up with the realities of wireless growth and use. The issue became more about capabilities than coverage, and the need to be closer to the user and create a denser network became obvious. That closeness improves the data capacity and throughput in heavily used areas.
The new capability is a merger of various technologies that fall under the small-cell moniker. These small cells are generally miniature versions of cell sites, but in size and deployment, they look more like WiFi hotspots. The reduced footprint allows them to be positioned in plain sight but obscurely in areas previously unsuited for a full cell site. This opens up the possibility of bringing the network close to the users, such as in a store or on streetlight posts. This new style of network is commonly referred to as the heterogeneous network (HetNet).
Unfortunately, this new style of network adds a tremendous burden to the capex and opex of the carriers. The cost and complexity of deploying these small cells is significant and will only add to cost of the network. However, these new costs (the cost of running today’s wireless networks) are not reflected in any changes in charges to the customer. This in effect means that the carriers are subsidizing improvements in service with little reward, aside from the all-important customer satisfaction requirement.
This has led to acrimonious talk about OTT applications. The carriers feel they should be compensated for creating a network that allows these applications in the first place. One can argue about the overall merits of the carriers’ position, yet the reality remains that these OTT applications create the need for a costlier network, which the carriers provide at great cost that they must eat.
The question, therefore, is how carriers are supposed to benefit from the ongoing and increasing investments in their networks. The answer lies in those very same investments.
Making the network work for you
When one looks at the 3GPP standards that are the foundation of the wireless network infrastructure and service, one sees a network aimed at providing reliable wireless services. On closer inspection, the standards are merely the sum of their parts, which contain a host of minute capabilities that allow the wireless service and were designed with that primary goal in mind. Yet those minute capabilities can be reconfigured and used for purposes other than wireless service.
Take this research from Microsoft that aims to gather real-time information on a given location. The current setup requires a user to check in at the location and provide the required information. Yet the optimal way to do it is by leveraging the registration requirement that allows the network to know where the user is upon entering the facility and using the control plane to activate the device and gather the required information.
Vodafone is using that registration information in Greece to provide free service in participating retailers. The control plane device activation is currently used primarily for location discovery in the event of an emergency call.
Carriers already mix and match some of these capabilities as needed for various M2M applications, yet these implementations are extremely costly and time consuming, so they are limited to carrier-sanctioned products. It is incumbent that we turn the core of the carriers into development environments — with the obvious stringent privacy, security, and veto controls — by simplifying and exposing the network to outside developers.
OTT companies and app developers will always look to take the quickest, most efficient route to market. We can all agree that is currently not with the carriers if they have a choice in the matter. Yet developers and their investors will recognize the value of unique and game-changing capabilities, and they’ll be more than willing to deal with the reasonably surmountable yet clearly defined roadblocks to partake in the opportunity.
By opening up these core capabilities and making them easy to use as individual modules, carriers remove the need to limit which services get deployed based on resources. This will open up profit avenues and scenarios that leverage the new and unique underlying capabilities of HetNets, including new business models.
For carriers, recognizing that they do not have all the answers, and that they cannot exploit every opportunity, is the first step in preventing their networks from morphing into an unsustainable dumb pipe.