Articles by Joe Madden
Recently, I have been writing about the decline of the macro base station market, predicting that, in rough numbers, the investment in "Tower and Power" will drop by half over the next five years. Unfortunately, I have heard very little disagreement from my subscribers that sell base stations and semiconductor devices. The gravy train is slowing down.
When I talk with people about DAS and small cells, I hear the same old story: DAS is too expensive. DAS is dead. Let's check that old 8-track tape that people are playing, because it's getting out of date. First of all, let's look at the breakdown of costs in a Distributed Antenna System.
For the past three years, I've been saying that 2015 will be "the year when you will see small cells ramp up." Six months ago, I was getting pretty nervous because the firm orders had not come through and semiconductor backlog was weak. I felt like a weatherman predicting rain after a five-year drought... everyone wants to believe that it's true, but there is no evidence on the ground. Now, the drought is ending. Mobile operators have ended the endless field trials, and have moved toward reliance on small cells for network capacity and enterprise applications.
At next week's Mobile World Congress, I expect to be clobbered by hundreds of companies that claim to have the answer to 5G. Massive MIMO and MU-MIMO. Millimeter waves. New modulation and duplexing formats. Cloud RAN and various kinds of SDN/NFV. Carrier Aggregation between multiple air interfaces. MTC for the IoT. Of course, all of these are pieces in the 5G puzzle.
Like all of you, I'm watching the AWS-3 auction with interest. The precise identity of the bidders and the details of specific licenses won't be revealed for some time, but the daily announcements about total dollar value are fascinating. The U.S. Federal Communications Commission will be raking in more than $34B when the bidding is closed.
Over the past four years we have seen little investment in Wi-Fi networks by American mobile operators. It's different internationally, with millions of APs at China Mobile, KDDI, SKT, Telefonica, and others, but a close examination of Verizon Wireless and AT&T reveals that they have deployed very few Wi-Fi access points.
In the mobile communications industry, we often talk about the "scissors chart," which shows revenue reaching a plateau while demand for data continues to grow. Everyone can see that these combined trends are a problem for mobile operators. The mobile operator must feel like a father that brings home his paycheck, to find that his family has already spent it. Here's the good news: Encouraging signs are emerging now that there's a new source of capital available for the mobile industry.
Have you ever visited a big urban hotel, to find that mobile service was weak? Don't you wonder why nobody has fixed the coverage or capacity issue? Maybe I stay in the wrong hotels, but this seems to happen almost everywhere I go. The answer lies in economics, not technology. Mobile Experts has been studying several vertical markets (hotels, campuses, hospitals, office buildings, etc) to understand the economics behind in-building wireless decisions. After two years of study, we are ready to make a conclusion.
The mobile data tsunami represents a major disruptive event in the industry, which gives each player an opportunity to advance (or to die). Samsung is moving up in the infrastructure world, with new contracts at Sprint for world-class deployment. Nokia's recent financial announcement shows great discipline, but also signals future problems for the Finns. I don't have all the answers, but I ask good questions.
Over the past year, Mobile Experts has conducted deep investigations into Macro Base Stations, Active Antenna Systems, Small Cells, Cloud RAN, Carrier Wi-Fi, and DAS. Every time that we talk to an enthusiastic young company about one of these new technologies, we hear about how the new technique will sweep across the entire mobile infrastructure market, changing everything. In reality, each new technique seems to be a piece of the overall puzzle. And that's a good thing.