Some people say that “spectrum is the new oil.” I don’t think so. Spectrum is like real estate … it doesn’t get used up, and over time we find new ways to use it better.
Building a mobile network using macro base stations is like building short one-story buildings on vacant lots. That’s the cheapest way to build if land is cheap.
However, when land is scarce, we build taller buildings because that’s cheaper than trying to buy more land. That’s similar to small cells, where we reuse our spectrum within the coverage of a macro base station. In the mobile industry, massive MIMO is the equivalent of a skyscraper, making the maximum use of the spectrum.
Mobile Experts has done some analysis recently to estimate how far along our mobile networks are in this evolution—When will we “maximize” the use of our spectrum?
In American cities, we have already seen significant deployment of small cells, and massive MIMO deployment is starting for hotspots. Operators will be adding LAA and CBRS to their networks, and in urban centers we’re forecasting rapid adoption of these new bands.
Despite the infusion of new spectrum with LAA and CBRS, American operators expect traffic demand to grow faster than their ability to add capacity below 6 GHz. Refugees from the cable market are showing up as heavy LTE users, driving up the average usage on smartphones from 7 GB per month to 11 GB per month—just in the next year.
In fact, we expect the growth of mobile data to accelerate, not slow down, because of the growing numbers of young people that simply don’t want to pay for cable. We’re forecasting a new surge of traffic growth, pushing this figure to 50 GB per month by 2023.
In most of the country, this level of heavy demand will translate into small cell deployment, LAA deployment and a CBRS overlay. Massive MIMO will be used in urban centers, initially focused on the higher frequency bands such as Sprint’s 2.5 GHz spectrum but—in special cases—moving down to the narrower bands at 1900 MHz and even below 1 GHz.
Massive MIMO won’t be able to work miracles in every spot, because deploying m-MIMO below 1 GHz requires a huge antenna … the physical size required by the long RF wavelength translates into a much larger, heavier antenna structure. Economically, this will not be the best choice in many areas because the cost of renting space on a tower could be staggering.
In our cost models, deployment of mmWave small cells will actually be cheaper than another round of small-cell densification and widespread use of giant massive MIMO antennas. If Verizon and AT&T deploy 5G-mmW on their existing small-cell sites, they can add tremendous capacity at a reasonable cost. Doubling or tripling the number of small cells, plus Massive MIMO on the macro network, would incur huge, less predictable costs related to fiber deployment and antenna placement.
So we have modified our forecast to show a dramatic increase in the breadth of mmWave deployment. Instead of a limited FWA deployment, we are now predicting the rise of 5G-mmW for mobile devices.
Our conclusions match up with forecasts coming from the operators themselves. So the industry needs to get ready for a production ramp.
Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets. The team provides detailed research on small cell, base station, carrier Wi-Fi and IoT markets.
Mr. Madden currently focuses on trends in 5G, IoT and Enterprise markets for wireless infrastructure. With over 26 years in mobile communications, he accurately predicted the rise of Digital Predistortion, remote radio heads, small cells and the rise of a Mobile IT market. He validates his ideas with mobile and cable operators, as well as semiconductor suppliers, to find the match between business models and technology. Mr. Madden holds a physics degree from UCLA. Despite learning about economics at Stanford, he still obeys the laws of physics.
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