Qualcomm's unlicensed LTE could crush carrier Wi-Fi's momentum
Qualcomm's (NASDAQ:QCOM) recently announced push to see LTE services deployed on unlicensed spectrum raises lots of questions, chief of which is how this might impact the carrier Wi-Fi market.
Qualcomm rolled out its vision on Nov. 20 during its financial analyst day, with CEO Paul Jacobs saying unlicensed LTE could coexist with Wi-Fi in the same spectrum, improving data delivery while minimizing interference.
The chipmaker is targeting this idea toward the 5 GHz band in particular. In a presentation now available on its website, Qualcomm cites ongoing initiatives to free up more 5 GHz spectrum for unlicensed use. There is already 500 MHz available in this band, with more in the pipeline in the United States and United Kingdom.
Qualcomm contends operators could use LTE Advanced carrier aggregation to bring together frequencies in unlicensed 5 GHz spectrum and the standard licensed LTE bands that run from 700 MHz to 2.6 GHz. The unlicensed spectrum would be used to enhance the downlink and would be dedicated to data services only, while the licensed spectrum would still handle voice, data and network control.
The company contends features would be included to protect Wi-Fi neighbors in the 5 GHz band. Qualcomm has a self-serving reason for that, given the Wi-Fi chips focus of its Atheros subsidiary, which was acquired for $3.1 billion in May 2011.
But how does Qualcomm's push jibe with industry efforts such as Hotspot 2.0 and Passpoint, which are aimed at ensuring seamless roaming across cellular and Wi-Fi networks? Obviously those approaches would still be helpful in the case of cellular offloading to pure Wi-Fi networks. But what mobile operator would want to focus on Wi-Fi if it can have a unified network with a common core and integrated small cells offering the same LTE Advanced service on both licensed and unlicensed spectrum, as Qualcomm proposes?
A blog entry from Prakash Sangam, Qualcomm's director of technical marketing, further paints an LTE-only picture for situations where an operator offers its own LTE Advanced service on unlicensed spectrum.
"Remember all the juggling between LTE and Wi-Fi networks; making sure you are connected, and connected to the right technology to get the best speed; worries about the media not seamlessly moving over between the networks, and tolerating video freezing, breaks, restarts etc.? All of that will be over with LTE Advanced in unlicensed spectrum (for the operator network). Because it's one network, with an anchor in the highly reliable licensed band, you are always in safe hands," Sangam wrote.
Mike Roberts, principal analyst with Informa Telecoms & Media, calls Qualcomm's proposal "a radical move that could upend carrier Wi-Fi." In a blog post, Roberts proposed naming Qualcomm's initiative "unlicensed LTE Advanced, or uLTEA, which is pronounced 'yuletea' and conveniently rhymes with VoLTE."
Maybe it's the season, but that moniker makes me think of a Christmas beverage. Be that as it may, I agree with Roberts that Qualcomm's proposal, if it takes off, "could dramatically expand the market for LTE and decimate carrier Wi-Fi."
Cable operators might continue on the carrier-grade Wi-Fi path in order to enhance their competitive positioning in the fixed broadband market as well as to compete against cellular operators with a differentiated service. But given the option of Wi-Fi vs. unlicensed LTE, I would expect many mobile operators to favor the latter, since it would fit so nicely with their ongoing LTE Advanced deployment efforts.
AT&T (NYSE: T) has emphasized that all of its future small cell rollouts will include Wi-Fi. And a recent survey from Maravedis-Rethink showed that Tier 1 carriers expect 75 percent of their small cells to include Wi-Fi by 2018. But that doesn't mean debate regarding Wi-Fi's proper role has ended, and that leaves the door open for Qualcomm's unlicensed LTE proposal.
Mike Schabel, vice president of small cells at Alcatel-Lucent (NYSE:ALU), said all of his company's 3G and LTE outdoor small cells offer an optional plug-in Wi-Fi module, and some of its 3G small cells are being co-deployed with standalone Wi-Fi access points. In addition, this past summer Qualcomm bought a small stake in Alcatel-Lucent as part of a joint business venture aimed at developing indoor multi-standard (3G, LTE and Wi-Fi) small cells.
But Schabel recently told me it is still unclear to many operators whether Wi-Fi should be viewed simply as an offload option or brought more into the fold to enable seamless mobility between Wi-Fi and cellular. "There are some open questions that the industry is still trying to solve when it comes to the use of Wi-Fi," he said.
In addition, if operators try to extend their cellular presence inside of businesses via small cells with integrated Wi-Fi, there will be questions regarding branding. "Does the cellular operator then take over the enterprise's Wi-Fi as a managed service? Do they provide a public access SSID over those nodes? How do they deal with the fact there is already a lot of Wi-Fi on enterprise campuses?" Schabel asked.
Small cells delivering LTE access via licensed and unlicensed frequencies might just be the answer to all of those questions. By introducing this proposal now, Qualcomm has set the stage for lots of discussions regarding the pros and cons during January's Consumer Electronics Show and the next Mobile World Congress in February.
It's anyone's guess how the unlicensed LTE concept will ultimately play out. But I do have to ask one more question: Why didn't anyone think of this sooner?--Tammy