A PCIA preview: The opportunity and costs of 4G

Phil GoldsteinWhen the PCIA 2010 Wireless Infrastructure Show convenes next week in Hollywood, Fla., Oct. 4-7, there is going to be one topic at the forefront of almost every attendee's mind: 4G networks.

While still contending with the growing amount of 3G mobile data traffic, the wireless infrastructure community is pivoting from 3G to 4G, and many speakers likely will touch on the opportunities and challenges that WiMAX and LTE bring.

The keynote speaker roster for the show--while still heavy on traditional infrastructure players like Crown Castle and American Tower--features a bevy of speakers who will touch on next-generation network issues. The list includes speakers from Clearwire (NASDAQ:CLWR), LightSquared (and vendor partner Nokia Siemens Networks) and Ericsson (NASDAQ:ERIC), which could touch on Verizon Wireless' (NYSE:VZ) forthcoming LTE deployment (Ericsson is a Verizon LTE supplier).

It all adds up to a bright spotlight on 4G, which PCIA President Mike Fitch said fits perfectly with the idea of the show focusing on the future. "What I do need to be aware of, both in terms of taking advantage of an opportunity and being prepared for a challenge?" he said. "We want to highlight what's new, what's changing."

Here are the hot-button topics and trends that likely will shape the discussions during next week's show:

Coverage vs. capacity: Cisco's Visual Networking Index predicted earlier this year that mobile data traffic will increase 39 times between 2009 and 2014. To meet that demand, Clearwire CTO John Saw said there needs to be an industry-wide paradigm shift away from coverage and toward capacity. "Our cell sites are not able to meet the needs when we become a capacity-driven business and not a coverage-driven business," he said referring to the broader industry. "Is it time to move up."

Tower companies, Saw said, need to think less about macro sites and more about micro sites, picocells, distributed antenna systems and rooftop deployments for urban areas.

Nicki Palmer, vice president of network operations support at Verizon, said that even though the carrier is moving full-steam ahead on its LTE deployment, Verizon is still spending significant network resources to keep with 3G data demand. "Where maybe a year to 18 months ago we would have thought we wouldn't be spending as much on 3G, and focusing much more on 4G, that has turned out not to be the case," she said.

Interestingly, the challenge is even more acute for relatively new entrants like Clearwire and LightSquared, said Marc Ganzi, CEO of Global Tower Partners. Greenfield operators could be the fifth or sixth tenant on a cell site, which will require the tower owner to modify the antenna configuration, possibly delaying deployment. "Building any network from square zero is very difficult," he said.

Nonetheless, GTP is working closely with both Clearwire and LightSquared on their deployment plans, down to each cell site. "We don't get paid until a customer commences their construction," Ganzi added.

Supply-chain stresses: Alcatel-Lucent (NASDAQ: ALU) and Ericsson both mentioned earlier this year that component shortages weighed on their earnings. Further, earlier this month AT&T (NYSE:T) Operations CEO John Stankey said the carrier is currently dealing with $300 million worth of network equipment backlogged by shortages.

Ken Wirth, Alcatel-Lucent's president of 4G/LTE wireless networks, said the supply-chain issue is industry-wide and will improve through the end of the year, though it likely will linger into early 2011. Wirth added that it is not impacting scheduled LTE deployments the company is involved in. "It takes a while for this whole machine to ramp back up and for the ecosystem to fully mature again and produce the volumes that are required," he said. Alcatel-Lucent is an LTE supplier to Verizon Wireless, which has said it will launch LTE in 25-30 markets this year.  

Indeed, GTP's Ganzi said some of the company's carrier customers have been undone by parts supply problems. For example, he said in some instances the cabling and antennas for a cell site were in place, but the base station was not ready.

"It will be something that I will be keeping my eye on very closely," said Verizon's Palmer.

Co-location by right: Currently, if a carrier wants to add a new antenna to an existing cell site, they have to go through the zoning process all over again. The situation has slowed some deployments, and PCIA and others are pushing for legislation to smooth the process of adding antennas to existing cell sites. (The FCC cannot issue a declaratory rulemaking on the topic, which means it's a local issue that each municipality must handle.)

Ganzi said GTP has been lobbying Congress to pass legislation on the topic. He said carriers that want to add new WiMAX or LTE antennas to existing infrastructure--even towers they own--should not be delayed.

A mandate on co-location by right "would make my job significantly easier," said Clearwire's Saw. Otherwise, he said, carriers will need to find more spectrum or split more cell sites.

I'll be attending the PCIA 2010 Wireless Infrastructure Show next week, and will be covering all the news from the show. Make sure to check back at FierceWireless next week for complete PCIA show coverage. --Phil