Stacey Higginbotham

Chip wars intensify as more gain LTE integration

Qualcomm has experienced a phenomenal run as the provider of integration applications processors and radios for smartphones this past year. The application processor is the brains for the smartphone, while the radios allow them to communicate. Qualcomm’s longstanding practice is to combine those chips onto one system on a chip to save space inside the handset, which has helped it lead the pack in terms of market share.

Now others are finally following its lead with Nvidia, which purchased radio maker Icera, and Intel, which purchased Infineon’s wireless business; both are set to release integrated chips next year. Nvidia’s Grey and Wayne chips will combine its Tegra processor and should hit devices in the second half of the year

Intel on the other hand has released an integrated modem and application processor that found its way into a handful of handsets this year, but didn’t support LTE. The chip giant plans to release an Atom-based application processor that supports the 4G standard early next year. Qualcomm is going to get some competition with good tech and competition with deep pockets as handset makers will have more chip options for the onslaught of LTE handsets expected in 2013.

Kevin Fitchard

The incredibly shrinking network

Next year networks are going to get smaller — or at least the cells within them are. The major U.S. operators led by AT&T and Sprint plan to begin their first small cell launches in 2013, paving the way for far denser networks and big increases in mobile data capacity.

Why are small cells important? Each cell in a network only has a finite amount of capacity, so if you increase the number of cells in a given area you increase the overall amount of shared bandwidth available to a carrier’s subscribers. Radio network analytics and optimization firm Actix estimates that today the typical square kilometer in a busy urban area contains five to seven macrocells, but in 2015 that same area will be augmented with a layer of 40 or more micro and picocells. Such an architecture could support 3,000 GB of traffic a day within a single square-kilometer, a 10X increase in capacity over what our networks support today.

The big cell mounted on rooftops and towers isn’t going away. Instead it will be incorporated into the heterogeneous network, allowing our smartphones and tablets to choose among many connection options and eventually to establish multiple connections simultaneously. Mobile bandwidth will become more plentiful and hopefully much cheaper. This won’t happen overnight, but we’ll see the precursors of these hetnets next year.

The resurgence of the MVNO

The independent mobile virtual network operator (MVNO) all but died in the last decade. But in 2012 the MVNO made a big comeback. Dozens of new virtual carriers emerged, but instead of focusing on a specific demographic or a media brand like the defunct Amp’d Mobile or Disney Mobile, this new breed of MVNO is targeting the industry’s traditional business models.

There are dozens of virtual operators led by Straight Talk that are now undercutting the big operators in price, but a few of them have gone further, upturning the usual minutes/bucket of megabytes plans. Republic Wireless is tapping into public, readily available Wi-Fi to offer unlimited data and voice plans at sub-$40 rates. Ting is offering what amounts to metered pricing, charging customers only for what they use. Karma and FreedomPop are using social networking principles to distribute 4G bandwidth.

Most of these MVNOs are just getting off the ground and many of them may get culled by the market. But 2013 could be the year for those MVNOs to flourish. There’s growing discontent in the market with the major carriers’ pricing models, sending consumers searching for alternatives. But there’s also greater willingness among carriers to work with MVNOs. They’re lifting many of the old restrictions such as limited access to networks and device that previously kept MVNOs from thriving.

Kevin Tofel

Wi-Fi gets better both in and out of the home

As carriers continue moving towards tiered and shared mobile broadband data plans, look for reliance on Wi-Fi networks to continue to increase. The one-time barrier of hotspot availability has diminished, but hasn’t solved a key problem: seamless connection to Wi-Fi networks. That’s where Passpoint and Hotspot 2.0 initiatives come into play. These services add new capabilities to Wi-Fi devices, primarily allowing certified products to automatically sign in and use a Wi-Fi network.

Asus 80211ac router

That’s just the first step, however; the idea is that smartphones, tablets and laptops will roam from one Wi-Fi hotspot to another without any user intervention. Not only will that help consumers and enterprise workers out in the field, but it also benefits cellular operators, making it even easier to offload data traffic from 3G and 4G networks to hotspots.

Home Wi-Fi use will improve as well thanks to the new 802.11ac standard, which boosts throughput over today’s 802.11n networks. Supporting up to eight antennas and wider bandwidth on a 5 GHz channel, 802.11ac devices deliver a wider coverage range with throughput speeds over a gigabit per second. Although the standard is still in draft form, expect to see some mobile devices support early versions of 802.11ac mainly for traditional networking activities and video sharing in the home.

Digital assistance and contextual smarts improve on smartphones… and beyond.

Siri, Google Now and various third-party assistants set the stage for contextual software in smartphones, but there’s more work to be done. Expect to see these and other related services mature by taking advantage of more mobile device sensors combined with deeper access to personal information such as schedules, contacts, locations, and your historical smartphone usage. More apps will arrive to help our handsets become more effective, and the successful apps will be eyed by platform vendors for integration at the operating system level.

This coming year will also see such contextual services appear in other objects. Think televisions that learn your viewing habits and automatically record shows you may be interested in, for example. How about a smart desk chair sets your online IM status to “available” thanks to a pressure sensor that “sees” when you’re sitting at your desk and back to “away” when you leave?

The possibilities are limitless thanks to the advances in apps and small hardware pioneered by smartphones. Helping to drive this movement are the hacker and tinkerer communities. These have long created their own solutions, but will drive change this year through open-source hardware and software projects such as Arduino.

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A small cell band would mean a dedicated swathe of spectrum in which carriers could deploy tiny cell sites, mounted on light poles or inside buildings, layering enormous amounts of capacity onto their 3G and 4G networks. Operators like Sprint and AT&T plan to deploy their first small cell systems in the coming years.

But it’s not a done deal. By unanimous vote, the commission issued a notice for proposed rulemaking (NPRM), which means a lengthy commentary and response period going well into spring, and no timeline has been set for a final decision. But the FCC is did offer details on what shape the final band will take.

Basically the FCC would set aside 100 MHz of spectrum in the 3.5 GHz band currently used by government agencies and satellite providers, and the give different sets of users priority in using the spectrum:

• The incumbent government and satellite users would make up the first tier. Whenever they’re online in a particular portion of the band everyone else is offline.
• The second tier is reserved for hospitals, utilities, government facilities and public safety agencies, which would be given priority access in specific geographic areas.
• The third tier is basically anyone else. Established carriers and anyone who cared to set up a network would be able to deploy small cells in the geographic and spectral gaps that remain. Those carriers would have to tap into a dynamic spectrum database that would tell them when and where spectrum is available so they could stay away from the incumbent and priority users.

Generally carriers aren’t fond of sharing spectrum with anyone, particularly each other. We’ll find out what mobile operators really think about the proposal in the coming months as they file their comments, but the initial reaction from the industry is positive. Telecommunications Industry Association President Grant Seiffert issued this statement:

“The FCC’s adoption of the NPRM is a commendable and significant step towards addressing the looming spectrum crunch and meeting National goal of making 500 MHz newly available for broadband use within 10 year. After careful and exhaustive planning to avoid harmful interference occurrences within and surrounding it, we believe that the 3.5 GHz band could be used advantageously for small cell use, and that more efficient use of this band could help decrease congestion in other bands.”

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With seemingly endless applications that range from mere entertainment (say, streaming video to the backseat of your car) to matters of life and death (like the ability for doctors to remotely monitor blood glucose levels), M2M technology is already rapidly changing the way that we live for the better. The M2M revolution is threatened, however, by two crucial and already pressing challenges: unnecessary complexity and the impending sunset of 2G wireless.

The rise of M2M is revolutionizing the way countless industries work. From shipping companies that now track high-dollar assets from country to country, to auto dealers that use GPS tracking and automated collection technology to assess customer loans. From doctors and caregivers who can monitor elderly patients from a distance to know if they need assistance instantly, to bagged ice machine vendors who are alerted when supply is low.

M2M is also a key enabler of Big Data, as an unprecedented amount of information is being collected from automated sensors already—from inside cars, in traffic light cameras, in new automated parking meters, in energy meters and so on. In fact, a whopping 2.14 billion M2M devices will have the ability to “talk to each other” by 2021—up from an estimated 100.4 million M2M device connections in 2011, according to the research firm Analysys Mason Limited. That represents an astounding compound annual growth rate (CAGR) of 36 percent across 10 years. And through it all, M2M is creating greater operational efficiencies, more productivity and fewer costs and headaches for companies across all industries.

All of these growth predictions fail to account for the crucial challenges mentioned above, however, which could become a costly and time-consuming wrench in the works for companies if they aren’t addressed. Some estimates suggest it could slash the forecast for 2.14 billion M2M devices in half—or even worse.

Complexity is a profit killer

Right now, large enterprise M2M projects still often take up to three years to complete, and typically require at least a $25 million investment, according to the research firm Maravedis-Rethink. It’s a big reason that M2M adoption for many businesses is still in a semi-holding pattern, with few committed to building it into their business plans.

That can’t continue if we’re really going to see M2M solutions make their way into improving our everyday lives, helping businesses improve bottom lines and allowing decision makers to make more informed decisions. There is no doubt that the benefits await, but there will be some wrinkles to iron out along the way.

M2M solutions must be made to be easier to deploy. We’re talking days or weeks here – even hours. Not years. Solution providers need the ability to get thousands of M2M devices up and running at once, crucially, using existing, standardized technology. They need the ability to customize rate plans and to see in real-time how their customers are actually using their applications. This is possible. More to the point, enterprises that get their M2M applications up and running quickly are seeing amazing returns. No longer do enterprises have to sit on the sidelines and wait as the process unrolls while they continue running their business with the same deficiencies that their solution is intended to improve. Typically, there is up to a 40 percent return on their investment in the first year alone.

But every time there’s a problem with that M2M application or the enterprise IT department has to focus on something like making the wireless connection work, that ROI is reduced. And at some point, if deploying an M2M application distracts from a company’s core business rather than enhancing it, then the ROI is no longer worth the effort.

Sunsetting 2G could slow some M2M applications

Unfortunately, simplicity isn’t the only thing holding back the growth of M2M right now. In fact, the very future of some M2M applications is being challenged, thanks to the mobile industry’s migration to 3G and 4G networks. In the process many are simply shutting down their existing 2G networks, stranding customers who have M2M applications that rely on them. I recently heard of a small boutique in the Midwest that relies on a 2G network to process credit-card payments. Without notice, its 2G cellular service was shut off and suddenly the shop’s point of sale device was non-functional, leaving a vulnerable small business scrambling to find options.

Complicating matters is that many M2M applications simply don’t use enough data to justify updating or transitioning them to wider pipes and the more costly devices associated with 3G and 4G networks. So, while in many cases it may be an option to upgrade to a significantly more expensive 3G or 4G compatible device, the low levels of data consumption required by these applications would not come close to justifying it, and so unnecessarily put a hit on a businesses ROI.

These shifts force customers to be very strategic in how they plan their M2M strategy. As some carriers are forced to move away from 2G networks because of spectrum constraints or other long-term strategies, there are other carriers that remain committed to supporting their 2G networks.

The bottom line is that for M2M to reach its full potential, application providers need easy-to-implement M2M solutions. And they also need some assurance that their M2M solutions will still be supported in the future as networks continue to evolve. If you give enterprises and potential M2M application developers these two things, M2M will reach its full potential.

And we’ll continue to see a revolution in the way business gets done.

John Horn is president of RACO Wireless.

Photo courtesy of Shutterstock.

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Meanwhile, the startup companies that make the gear over which those services traverse have seen investment fall from $796 million in 2009 annually to just $270 million in the 12 months ending in June, Ovum found. According to Ovum principal analyst Matt Walker:

“A funding disconnect has thereby emerged between network builders and network users. Lots of innovation and venture capital is targeting the network users, such as mobile apps and OTT platforms. However, little of it is directly helping the network builders. With a weak start-up pipeline, the industry relies more on incumbent vendors to generate new ideas and products. Their budgets are bigger, but VCs are often better at funding ‘game changing’ ideas ignored by established vendors.”

Admittedly, investing in the next big social network or an app that could generate millions of downloads is a lot sexier than, say, envelope tracking technology or cell site radio frequency filters. But those infrastructure innovations are just as important. The capabilities of many apps and services have already far exceeded the ability of our mobile networks to deliver those apps and services at a reasonable cost (think Netflix on 4G tablet). If we let network innovation slip, we could wind up with a bunch of very powerful services that have nowhere to go.

As Walker points out, the onus for innovation thus falls on the big established telecom vendors, and it’s quite the burden. Ovum estimates that with the falloff in startup investment, big network infrastructure makers’ R&D budgets are now 90 times larger than the investment going into networking startups –- that’s up from 30X two years ago.

Nokia Siemens Networks’ conception of a heterogeneous network

Don’t get me wrong — the Ciscos, Ericssons and Huaweis of the world are responsible for some amazing science and innovation. And today they’re building the small cell and heterogeneous networks of the future. But there are limits to what the big vendors can accomplish. The R&D budgets of the big industrial labs have shrunk immensely in the last two decades, and there’s only so much talent and so many resources those vendors can devote to innovation.  The biggest issue, though, is that the big equipment makers innovate in much different ways than small startups.

Big vendors have big ingrained investments

Look around. A lot of the wired and wireline networks we use on a daily basis have been with us for a while. The first 2G networks in the US went up in the late 1990s and they’re largely still in use. A good part of the big vendors’ businesses is maintaining, upgrading and iterating on the networks they’ve already built.

The lightRadio Cube, Alcatel-Lucent’s vision for the small cell.

That doesn’t mean the big vendors are merely redesigning the same old equipment, but they’re definitely looking for continuity with their older networks. Alcatel-Lucent’s lightRadio and Nokia Siemens’ Liquid Radio architectures, for instance, are truly mind-blowing approaches to the new heterogeneous network, but they’re still fundamentally the cellular technologies that have been these vendors’ bread and butter since the birth of wireless.

When Wi-Fi came along as a mobile data alternative to cellular, these vendors were resistant if not outright hostile. It took two startups, BelAir Networks and Ruckus Wireless to make the business case to carriers for large-scale outdoor Wi-Fi networks to supplement 3G and 4G networks.

The big vendors are working largely within global standards frameworks. That’s by no means a bad thing. It’s why an iPhone can communicate with a Nokia-built base station, and a Cisco router can be plugged into an Ericsson core network. But standards work is painfully slow. A lot of the innovation work in networking technology works goes on outside of the standards bodies, and if that work proves successful it wind up shaping the standards themselves.

There’s probably no better example in wireless than CDMA. Qualcomm’s upstart cellular interface was initially adopted by a single US carrier, AirTouch, but it eventually became the basis for all global 3G networks.

Innovating between the lines

While the big vendors have focused on the overarching evolution of networks it’s up to infrastructure core technology startups to fill in technology gaps. Companies like NSN and Ericsson will most certainly handle the large-scale rollout of small cells and hetnets in the future, just like Apple and Samsung will be designing our future 4G smartphones and connected tablets.

But it will be startups like Seattle’s still under-the-radar PivotBeam that are developing the critical software defined antennas that will link these millions of small cells back to the network core. And it will be small engineering companies like Nujira and Quantance supplying the power envelope tracking technology giving those 4G phones a tolerable battery life.

I’m not saying all of these specific companies are all going to be the next Qualcomm, and that you should go invest in them. But they’re part of a critical network infrastructure startup scene, and that scene appears to be shrinking. We’re already starting to see the consequences. The industry has started delivering speed in the form of LTE but it has so far failed to deliver us the cheap capacity critical to moving the mobile industry forward. If the investors keep neglecting network startups, that problem is only going to get worse.

Photo courtesy of Shutterstock user Mati Nitibhon

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Bloomberg, citing unnamed sources, reported that Sprint has no immediate plans to take over the remaining 52 percent of the 4G data carrier it doesn’t already own. The news sent Clearwire’s stock tumbling after several days of riding new highs on news of the Sprint-Softbank deal.

So why the fuss about Clearwire? The company has struggled mightily since its nationwide WiMAX rollout came to an abrupt halt in 2010 while the rest of the mobile industry threw its lot in with LTE. The company has since announced plans to deploy its own variant of LTE, called time-division or TD-LTE. Ostensibly that new network is going up right now, but Clearwire has been known to promise networks that fail to appear.

Clearwire needs both cash and customers to realize its network ambitions, and it might still be holding out hopes that a Softbank deal with Sprint is the key to both. In Softbank Clearwire has found a kindred soul. The carrier is pursuing its own TD-LTE build out in Japan, using the exact same 2.5 GHz band as Clearwire. The two are already partners in a global TD-LTE consortium – along with China Mobile and India’s Bharti – tasked with creating a handset and device ecosystem for their pet technology. A three-way marriage between Clearwire, Sprint and Softbank would only further those goals.

Sprint’s relationship with Clearwire has always been dictated by cash. But with an $8 billion cash infusion from Softbank, Sprint could buy out Clearwire outright and build the fattest LTE pipe in the country with Clearwire’s treasure trove of spectrum. That’s the theory anyway.

The thing is the so-called TD-LTE synergies of such a deal have been overstated. Buying and investing in Clearwire would definitely give TD-LTE a big boost and ensure that the technology had a place in the U.S., but that’s an awfully steep price to pay for what amounts to a vote of confidence. Softbank can build its device ecosystem just as easily by partnering with other carriers. And if the only way of keeping that global TD-LTE dream alive is to purchase struggling international operators, then Softbank may want to reconsider its technology choices.

Customers could roam between Japanese and U.S. TD-LTE networks, but a roaming agreement is hardly the basis for an acquisition. And while there might be device compatibility in TD-LTE, the remaining 2G, 3G and 4G networks and bands Softbank and Sprint-Clearwire use have absolutely nothing in common. It’s not like Sprint handsets are going to work on Softbank’s Japanese networks or vice versa – at least not until voice-over-LTE services are in full swing.

Softbank could feel there are other ways Sprint can use that cash to get the future capacity it needs, either by bidding in future 4G auctions or through other strategic acquisitions. Maybe Clearwire is ultimately part of Softbank’s U.S. ambitions, but it would be a mistake to assume that the two are natural fit just because they’re pursuing the same LTE technology.

Photo courtesy of Shutterstock user Gary Paul Lewis

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LTE isn’t just a faster technology, it’s a more efficient technology – carriers can pack a lot more bandwidth into any given chunk of spectrum with LTE than they can with older generation technologies. While many of you will laugh at this next statement, the large-scale adoption of LTE will make mobile data cheaper. It won’t happen immediately, and yes, most carriers will resist lowering prices with every fiber of their being, but it will happen. That’s simply the way competition works.

By 2013 we’ll have four nationwide carriers with LTE networks. Given all four LTE networks will have the same ingrained data-delivery efficiencies, it’s only a matter of time before one uses that advantage to start slashing per-gigabyte rates, thus setting off a price war. The carriers may not be saints, but they’re not idiots either. If they can halve their data plan pricing and still make a profit, they will – they just need competitive pressure to help that decision along.

Furthermore, the move from 3G to LTE isn’t a one-time bonus. LTE will beget LTE-Advanced. LTE-Advanced will beget new network topologies like small cells and heterogeneous networks (HetNets) all aimed at pumping gobs of cheap localized capacity into the network. The industry will add more parallel antennas to devices and towers, carriers will design their systems so phones can connect to multiple towers, even multiple networks simultaneously, and interference coordination technology will allow cells to be grouped together in huge clusters without canceling out each others’ signals.

With each new 4G iteration, networks will enjoy accompanying boost in capacity and efficiency. The costs of planning and deploying these networks will be enormous, but so will then increase in bandwidth available to any given subscriber. The same operational cost that goes into delivering a gigabyte of data today will deliver 10 GBs in the next few years. Ten years down the road 100 GBs could be delivered for the same price.

Why Apple is critical to this transformation

Without Apple embracing LTE that shift to cheaper mobile data isn’t going happen. Yes, LTE networks have started popping up all over the world without Apple’s help, but carriers can’t realize their operational efficiencies until they move the majority of their traffic and devices onto those new 4G networks.

The iPhone’s data hunger is ravenous. Network optimization and analytics firm Arieso estimates that the introduction of each new generation of iPhone produces a 40 percent increase in traffic over a carrier’s mobile network. If the iPhone 5’s data deluge doesn’t hit a new LTE network, it doesn’t just evaporate — it floods onto carriers’ 3G networks.

By placing even more burden on 3G, carriers would be forced to keep investing in them their legacy networks. Instead of plowing their billions of investment dollars into 4G networks, they would have to add more 3G capacity and devote more spectrum to maintaining older technologies. And once those investments are made, they’re sunk. Any megahertz devoted to 3G is going to remain 3G for the foreseeable future.

In Europe and other regions of the world behind the mobile broadband curve, a sans-LTE iPhone lessens the urgency to deploy the newest network technologies. If your single best selling smartphone model for the next nine months doesn’t support 4G, why should you? Android handset makers like Samsung should be lauded for their efforts in propping up the LTE ecosystem, but Apple was the missing, critical strut. (For a more detailed analysis of Apple’s impact on LTE check out my GigaOM Pro report on the topic, though a subscription is required).

If Apple failed to produce a 4G iPhone, LTE’s progress – and the progression toward cheaper data – would have been hindered, not just for another twelve months but possibly several years. What radios the in the iPhone includes have a big impact on CTOs’ network decisions and CFOs capital investment decisions for the next year. The wireless industry isn’t the internet industry. These are big iron deployments we’re talking about, and those decisions have long-term consequences.

It’s going to get worse before it gets better

Unfortunately, carriers have taken advantage of transition from 3G to 4G to pull some pricing shenanigans. Verizon and AT&T both recently launched shared data plans, which lets their customers pool their devices into a single plan (a good thing), but also forces customers to double down on the voice and SMS services they’ve long been abandoning (a bad thing).

Wireless Intelligence’s global breakdown of LTE subscribers

In Europe, there are indications that carriers will charge a premium for LTE access following the logic that faster connection speeds demand higher rates. It looks like carriers are milking their new investments for all they are worth, which is hardly surprising to many observers of the mobile industry. But I don’t think any of these business models are sustainable in the long-term.

It won’t be AT&T or Verizon, but we have two other nationwide operators in the US with plenty of initiative. Sprint has already extended its unlimited smartphone data plans to LTE where its customers can do far more damage than over its old CDMA networks. T-Mobile hasn’t yet released its pricing plans for LTE, but you can bet it will either match or discount the already cheap buckets of HSPA+ data it offers today (while T-Mobile didn’t get the iPhone today, it’s inevitable it will land the device). At that point we can leave it up to the market to do its work.

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In an announcement, media regulator Ofcom (the UK’s equivalent to the FCC) said the auction will make available some 250 MHz of spectrum for mobile broadband — including some that had previously been used to deliver analogue TV. And one of the winners in the auction will have to agree to provide indoor reception for at least 98 percent of Britain’s population by 2017.

Ofcom added that it was ready to go ahead with the auction “as soon as possible”, after a statutory consultation ends in September.

“As soon as possible”, though, seems to mean “not quite yet”:

Ofcom expects the auction process to start before the end of this year, with prospective bidders required formally to apply to take part. Those applications will then be assessed by Ofcom before the bidding phase starts, likely to be in early 2013.

Mobile operators are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and to start offering 4G services to consumers later that year.

Going by the evidence so far, even that timetable may be ambitious.

Ofcom had originally slated the auction for 2012, but that was delayed after the government found itself trapped in negotiations with the dominant network operators. Further reworking of the plans does not seem to have made it possible for the auction to take place any time this year.

While the slow approach looks like another case of bureaucracy gone bad, much of the blame for the delay should be laid at the door of the operators themselves. The largest players — Vodafone, Telefonica and Everything Everywhere, a joint venture between France Telecom’s Orange and Deutsche Telekom’s T-Mobile — have voiced serious concerns about the way the bidding process was being put together, as well as arguing over which parts of the spectrum should be available to which operator.

Part of their reticence dates to when the telcos paid more than £22 billion — $35 billion — for the rights to 3G spectrum in 2000. It turned out to be a massive overpayment, which when coupled with the dotcom crash led to a very difficult few years for mobile businesses.

One bright spot is the fact that all these delays before the auction may make rollout faster once it’s happened. Most of the networks have already been putting provisions into place for 4G connectivity ahead of the spectrum sell-off.

But it’s fair to say that Britain is a long way behind mainland Europe, and mainland Europe is a long way behind everywhere else.

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In a recently released report on unlicensed spectrum, wireless consultant and former Ofcom economist Richard Thanki argues that the wireless industry and its regulators have their priorities all wrong. If the idea is to build ubiquitous networks offering plentiful and cheap data, then carriers and governments should pursue the cheapest and most efficient technologies, which in most cases isn’t cellular infrastructure. That report will be one of the key topics of Center for Internet and Society conference held Wednesday at Stanford University (Our own Stacey Higginbotham will be moderating one of the panels). You can watch the live stream here.

Thanki argues that the ‘spectrum crunch’ is a misnomer. Carriers can support far more capacity if they deploy smaller cells, reusing the spectrum it already has to nth degree. What the mobile industry faces, Thanki says, is an “infrastructure crunch”: It hasn’t built out the density of cells necessary to support the demands for mobile data.

Nokia Siemens Networks’ conception of a heterogeneous network

This isn’t a new concept by any means – operators like AT&T, Verizon Wireless and Sprint are now planning their first small cell deployments with an aim of implementing multitechnology heterogeneous networks in the future. But while their plans include Wi-Fi to varying degrees, those operators are still leaning heavily on small cells built over licensed spectrum they own and control, which to Thanki makes absolutely no sense.

“For example a cellular picocell costs from $7,500 to $15,000 whereas a much higher capacity carrier-grade Wi-Fi access point costs around $2,000,” Thanki wrote. “The cost of a Wi-Fi chipset for a consumer device is around $5, whereas 3G cellular chipsets costs around $30.

Thanki said that the insistence on licensed airwaves isn’t a function of efficiency or utility, rather it’s one of control:

Cellular operators are calling for ever more exclusive-use spectrum, in some cases up to 1,000MHz of additional bandwidth. Fulfilling these requests will lead to a substantial concentration in the ownership of the most valuable spectrum, risking both decreased competition and innovation. As part  of a balanced approach to meeting the growing demands for data, policy makers should also enable more dynamic spectrum sharing and licence-exempt access  across the spectrum.  As shown in this report, licence-exemption promotes methods of broadband delivery that are overwhelmingly more efficient in their use of spectrum than their licensed counterparts. In addition, the licence-exempt ecosystem has been notable for creating contestable and competitive markets, characterised by disruptive innovation.

Standards like Wi-Fi, Bluetooth and emerging “super Wi-Fi” technologies can not only support more capacity at a much lower cost, they will be key to connecting rural and underserved areas as well as creating the Internet of Things, in which not just our phones, tablets and laptops are connected but also our homes, cars and appliances. The high costs of mobile data carriage and cellular hardware have already made Wi-Fi a much preferable alternative to mobile broadband, according to Thanki:

Another way of understanding the scale of global Wi-Fi deployments is to compare the aggregate capacity of Wi-Fi networks to global cellular networks. The aggregate capacity of the world’s Wi-Fi networks can be conservatively estimated to be well over 16,500 terabits per second. In comparison, the total capacity of the world’s 3G and 4G radio networks is probably no more 600 terabits per second.

Unlicensed spectrum is already the way the world is heading. Instead of trying to overcome their dependence on Wi-Fi and other unlicensed technologies, Thanki said, carriers and regulators need to embrace them. In his report he doesn’t say that the industry should do away with spectrum ownership completely, but he does recommend that regulators quash their bias for carrier-owned frequencies and strike a balance between licensed and unlicensed. Specifically Thanki recommends that regulators throw open TV white spaces spectrum for unlicensed use, which would trigger the next wave of wireless broadband innovation.

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• Mobile 2012 and beyond

Most of the new roaming functionality will be in New York City and the surrounding Tri-State area, Los Angeles, Tampa, Orlando, and Philadelphia as those areas have overlapping cable and Wi-Fi coverage. The group will be adding more cities and coverage areas, however. Signing in to a Wi-Fi network out of your home coverage area should be seamless: You’ll simply use the same credentials as you would on your own cable operator’s network.

As I’ve mentioned in the past, not only will consumers be happy with this broader Wi-Fi coverage, but so too will the mobile broadband network providers: Free Wi-Fi — even from someone else’s hotspot network — helps to offload data from 3G and 4G networks. Single sign-on while roaming on different networks makes this an easy win for consumers while cable providers can use the expanded coverage as a marketing perk to attract new consumers.

Sounds like a win all around to me and to my colleague Stacey, who said this two years ago after speaking to the folks at BelAir Networks, maker of wireless solutions, and now owned by Ericsson:

“So will ISPs take the consumer love of ubiquitous broadband and carriers’ need for offload to the next level and create the equivalent of roaming agreements for Wi-Fi? Greg Williams, the new SVP of corporate development at Bel Air Networks, thinks they might. …He wonders if carriers will negotiate with each other and fixed-line ISPs to get access for their wireless subscribers, especially in congested cities such as New York or San Francisco.”

Two years later, and it looks like the Wi-Fi roaming revolution is well underway. Be sure to bring your smartphone or tablet with you to get on board!

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Reports first flooded in from Australia, where Apple’s been fighting a court case over its 4G claims, pointing out that the “iPad 4G” has been dubbed “iPad WiFi & Cellular”.

The same change has happened in some other countries, including New Zealand — but not everywhere, even when the device is not compatible with local networks.

In Sweden, France and Germany, for example, nothing has changed: the iPad is still labelled “WiFi + 4G”, and information that LTE is only supported by AT&T, Verizon, Bell, Rogers and Telus is relegated to a mere footnote. Meanwhile in the U.K., where the company is banned from using ’4G’ in its marketing because there is no 4G networking at all, the Apple website’s tech specs page still lists 4G capability — but with the same caveat brought up the page into the spec.

It paints a confusing picture, despite the fact that the reality is simple: outside North America, the new iPad’s higher speed connections won’t work.

The confusion is partly because different countries have had different issues with Apple’s marketing. Some have no 4G networks at all — and therefore have concerns that consumers are potentially being misled into buying a product for which there is not appropriate support. Others pointed out that the iPad’s higher speed frequencies — it operates at 700Mhz and 2100Mhz — are incompatible with their local 4G spectrum.

Why not simply change it full stop in the same way? Unless the changes are just being rolled out slowly, the company appears to have chosen a patchwork approach for reasons that are unclear. What’s happened where you live?

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