Mun: 3.5 GHz CBRS (and unlicensed LTE) small cells provide something for everyone

Small cells are playing a bigger role in wireless capacity expansion nowadays, as operators continue to densify their networks, and in certain cases fill coverage holes. The growing interest in small cells is primarily driven by favorable economics, but competitive convergence dynamics may also be contributing to the trend. Unlicensed LTE technologies such as 3.5 GHz CBRS and MulteFire offer a lower cost and flexible alternative in delivering LTE services, and these attributes are attracting new stakeholders to take a closer look at how these new technologies may open up new market opportunities.

Traditional mobile operators may employ 3.5 GHz CBRS bands as supplemental spectrum for license assisted access to enhance their core service delivery -- effectively increasing raw speed and capacity by aggregating additional carriers from unlicensed or shared bands. With three-carrier aggregation already available, it is reasonable to expect 4-5 carrier aggregation to come to market in the near future. It’s a sure bet that mobile operators will add 3.5 GHz LAA to their small cells. It would be foolish for them to pass up on a big chunk of available spectrum.

Enterprise players can use 3.5 GHz CBRS to build “private” LTE networks indoors, for more secure and enhanced mobile services that they cannot adequately realize with Wi-Fi today. Big tech-savvy enterprises, venues, or even hotel chains may want to do this to finally implement a neutral solution that is not tied to a specific operator.

Neutral host service providers can build 3.5 GHz small cell networks at enterprises or venues as a wholesale network for mobile operators and/or enterprises directly. Think of this as the tower model, except the neutral host would rent bandwidth instead of physical space.

Finally, new entrants such as OTT players could potentially invest in 3.5 GHz CBRS networks to offer retail or wholesale fixed wireless services to targeted segments. Google made its own phone…if they built a network they could gain a strong hold over certain verticals.

With something for everyone, 3.5 GHz CBRS and unlicensed LTE small cells may be deployed by all of the above. Of course, this hinges on proper incentives for device manufacturers to support this ecosystem. We have recently explored these “unlicensed” business models and their implications on the mobile infrastructure market including macro RAN, small cells, DAS and carrier Wi-Fi.  

The success of the 3.5 GHz ecosystem is far from certain, with major questions regarding handset availability, spectrum policy, and monetization in the business models. Vendors have been coming to us for a look in our crystal ball, because we’re looking at the problem with regard to specific enterprise vertical markets. The answer in a hotel could be very different than the answer in a stadium or a hospital. Stay flexible out there.

Kyung Mun is a Senior Analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provides market analysis on the mobile infrastructure and mobile handset markets. Over the course of his 20+ years in wireless and cable industries in a dynamic range of roles from engineering to product management and technology strategy, he has contributed to the advancement of mobile communication, while working at leading companies in the mobile value chain including Motorola, Texas Instruments, Alcatel-Lucent, and a few startups in between. He holds undergraduate and graduate degrees in electrical engineering from the University of Texas at Austin and Georgia Tech, and studied finance and strategy at Southern Methodist University.