Jarich: What was hot (or not) at Mobile World Congress

For the past few years, I've come home blurry-eyed from the GSMA's Mobile World Congress in Barcelona and (after swearing off tapas and cured meats for a while) worked with our analysts to put together a few trade show roundups... deep dives into the major infrastructure announcements coming out of the show: what was good (or not); what was important (or not); how the market was impacted (or, you guessed it, not). While attendance was officially down by about 15 percent this year, the biggest wireless show of the year still generated its share of news, with insights to be gleaned on various fronts.

LTE Networks
The focus on LTE this year wasn't particularly surprising. Last year, we saw initial demonstrations and vendors explained that their SGSNs (service GPRS support nodes) and GGSNs (gateway GPRS support nodes) would evolve to support LTE going forward.  It was only natural, then, that this year saw official LTE base station and Enhanced Packet Core launches.  Beyond a mere continuation from 2008, however, the focus on commercializing LTE makes solid business sense. Operators beginning to plan their LTE deployments (like Verizon) need to know which vendors can support them. 

Yet, more than simply endorsing the LTE solutions from Ericsson and Alcatel-Lucent, Verizon's declaration of its LTE equipment suppliers points to a clear segmentation in the market for LTE products. Some vendors are leading with new platforms aimed at supporting LTE in addition to other 2G and 3G technologies.  Others are leading with a strategy based on upgrading existing deployments.  Vendors with limited W-CDMA success, in turn, lead with standalone, dedicated LTE solutions--slim baseband modules meant to complement existing 2G or 3G base stations. The same goes for the Enhanced Packet Core where a clear line is being drawn between solutions built on existing platforms and new platforms. 

The end-goal of these various strategies is the same: simple, cost-effective, capable network upgrades and launches. The message, however, is that all architectures have merit since no two operators have identical needs.

2G/3G Networks
Behind the omnipresent LTE demonstrations and messaging were announcements focused on today's 2G and 3G technologies. Given operator demands for cutting OpEx and painting themselves "Green," energy efficiency and alternative powering were obvious hot topics. To be sure, these same technologies could be just as well applied to LTE. But, given the years of R&D spent trimming the power consumption of 2G and 3G solutions, teaming solar or wind power with today's generation of base stations is a natural fit.

Somewhat disappointingly, a major theme of the 2G/3G news in Barcelona was the preparation for LTE. Multi-standard base stations may support GSM and W-CDMA, but the major value is delivering LTE in the future. New, combined base station controller/radio network controller solutions help to collapse 2G and 3G networks, which is a key value. However, so is cutting costs and simplifying operations in preparation for LTE.  HSPA+ demonstrations, trials and silicon, in turn, are really about giving operators an interim option to compete with LTE or, at least, use current networks to bridge to the performance LTE promises.  Even 2G network upgrades can be seen in a light of supporting GSM customers in order to solidify LTE sales prospects.

Still, despite the HSPA+ news coming from various vendors, the focus needs to intensify. Going forward, the importance of HSPA+ cannot be denied; particularly as an economic crisis makes network upgrades more attractive and device silicon support helps to deliver a HSPA+ ecosystem.  At the other end of the spectrum, emerging market messaging was also rather slim. Yes, alternative energy sourcing is applicable to emerging markets.  So too, are strategies aimed at delivering inexpensive solutions--solutions necessary to expand networks to the next billion users.

Following last year's focus on compelling, femto-based applications, 2009's femtocell news from Mobile World Congress was a bit boring.  New silicon solutions were launched. New reference designs and picocells and network integration capabilities, in turn, focused on enterprise applications.

Yet, while less exciting than applications that move the femtocell beyond a tool for coverage and capacity offload, a focus on femtocell silicon and enterprise applications is ultimately about creating a viable femtocell business model. The enterprise, for example, represents a market that mobile operators have been attempting to penetrate for years. It is also a market that has a clear demand for the coverage and capacity femtocells deliver without being as price sensitive as the average household.  Perhaps more importantly, new silicon sources--Qualcomm, in particular--are critical for helping femtocell vendors differentiate their solutions and adding the product-line stability that comes from dual-sourcing.

The focus on viable femtocell business models shouldn't be surprising. While the hype and patently misinformed expectations of massive deployments in 2008 have faded, the reality is that operators are still struggling to make sense of the femtocell space. How viable is it? Will it deliver a return on investment? How should it be tackled? Will the broader silicon industry support its success?  While it can't be accepted as immediately unbiased, the Femto Forum's white paper discussing the economics of femtocells--and the fact that these economics differ from market to market--speaks directly to the need for answers.

Peter Jarich is a research director at Current Analysis, a market research company. He is responsible for managing the wireless infrastructure practice, and research on mobile infrastructure and mobile networking trends, IMS and carrier application infrastructure deployed by wireless service providers. www.currentanalysis.com