Madden: Shared spectrum and wholesale wireless

joe madden

     Joe Madden

Sometimes I write about what I see in the marketplace. This time, I'm writing about what I DON'T see in the marketplace.

First, here's some background to set the stage:

New products are starting to arrive, making new networks possible at 3.5 GHz. In the U.S. and a few other countries, 80 MHz spectrum has been set aside for "General Authorized Access." Other bands will be licensed on a conditional basis. And as usual, the prospect of new spectrum gets everybody excited about what kind of equipment will be deployed. Several companies have started to tell me that the 3.5 GHz band will be used by neutral operators, selling wholesale capacity to mobile operators.

This is where the train leaves the track.

I'm not convinced yet that the wholesale business model will happen in a significant way. We've had Hotspot 2.0 and Wi-Fi calling for years, but no significant roaming relationships have emerged between Wi-Fi networks and mobile operators. There have been smaller deals in a few airports, but there's no nationwide roaming relationship that uses Hotspot 2.0 to connect millions of carrier-grade Wi-Fi access points with a bucket of money.   

Let's face it: Hotspot 2.0 was a technical success but it has gone nowhere commercially.    

How is the 3.5 GHz band different? Instead of Wi-Fi, infrastructure in the new band will use LTE. This will improve the performance and robustness of the link, and sets up the possibility of high-quality carrier aggregation with licensed LTE bands. Is this enough to overcome the barriers we saw in Hotspot 2.0? Is the CBRS band important enough to drive a new business model?  

For those that are interested in looking for early-warning indicators of a market shift, I would suggest watching the MulteFire Alliance. The MulteFire Alliance has been created to promote LTE in unlicensed and shared-license bands. The group is sponsored by powerhouse companies such as Ericsson, Nokia, Intel, and Qualcomm. But no major operators have signed up publicly as members. Maybe it's not fair for me to poke holes in the Alliance because it was only formed four months ago. But it's critical for operators to buy into this new business model. If the suppliers "push" the technology (as with Hotspot 2.0) without significant "pull" from the operators, then MulteFire will be a flop.

Google is one wildcard in this market. So far, Google has participated as a Spectrum Access System (SAS) provider, but it's capable of disrupting the market by operating a wholesale network. So far, we don't see any signs that this will happen.

I'll keep watching those early-warning indicators. For now, it looks like the 3.5 GHz band will be used by mobile operators in direct extensions of their networks…not by wholesale operators.

Joe Madden is Principal Analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provide market analysis on the mobile infrastructure and mobile handset markets. He provides market forecasts for handset, DAS, small cell, and base station markets, with in-depth research down to the nitty gritty details of frequency bands and power levels. Mr. Madden graduated, cum laude, from UCLA in 1989 and is a Silicon Valley veteran. He has survived IPOs, LBOs, divestitures, acquisitions, and mergers during his 24 years in mobile communications.

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