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There is a lot of buzz around the term “heterogeneous networks,” but a big reason for the attraction are centered around Wi-Fi and small-cell technologies and their business implication for major stakeholders – operators and infrastructure OEMs. Now it should be fairly easy to understand why Wi-Fi is the star attraction given that Wi-Fi radio infrastructure equipment is relatively inexpensive and spectrum is free. Inexpensive plus free adds up to a very compelling traffic offload alternate solution for operators.
However “cheap and free” almost always come hand in hand with limitations in “flexibility and quality.” By flexibility, I mean the ability to have rich statistics reporting, alarming, configuration, interoperability and traffic control functionality. Limited quality stems from the fact that the spectrum is unregulated and quality of experience and security cannot always be guaranteed. So let’s look at the business impact for the various stakeholders.
For infrastructure OEMs, Wi-Fi can definitely be seen a profit-eroding technology compared to cellular proprietary technologies. However simply ignoring Wi-Fi is a dangerous strategy as there are strong network infrastructure vendors like Cisco without a cellular radio legacy that will address the need of the operator. Ericsson realized this quickly with its acquisition of BelAir.
However they, or other OEMs, decide to position the Wi-Fi product suite with respect to cellular will determine their real success. I don’t believe that adding robust flexibility and quality standards to the Wi-Fi product suite is the right solution. That just positions the Wi-Fi equipment further away from the sweet “value” spot it was intended to serve. Instead, keep the Wi-Fi gear simple and affordable.
The greatest hotspot application threat to Wi-Fi is femtocell or “small cell” if physical size (for urban deployment) and pricing can be made comparable to Wi-Fi access points. I should state that most tier-one operators have enough spectrum to accommodate small-cell technology in hotspots, without having to deal with the tradeoff of flexibility and quality. OEMs should therefore spend more research and development resources positioning small-cell technology with rich flexibility, quality and security control functionality as the technology which is integrated with the macro cellular infrastructure. It is absolutely all right to have both Wi-Fi and small-cell technology solutions in your portfolio as long as they are positioned well.
For operators, Wi-Fi is a boon that should be adopted without hesitation to offload traffic in hot-spots in the cellular network. However, operators will have to address the challenge of not being able to control quality of experience. This is a good opportunity to introduce “performance tiered pricing.” Should the quality or throughput deteriorate in any way that affects consumer experience, the consumer or enterprise should be billed accordingly with different rate plans. Setting up this precedent with consumers and the FCC bodes well for operators to tackle the whole “net neutrality” debate. This will help defend monetization of the pipe, so to speak.
The American consumer is conditioned to paying for tiered service experience levels based on quality in consumer retail, insurance, banking and other sectors. Yet within wireless, consumers are only segmented by minutes and gigabytes in their service plans. This needs to evolve to more flexible and customizable service plans that automatically scale with the QoE level that is selected by the consumer and delivered. A very pragmatic way of approaching the discussion of technology choice and licensed verses unlicensed options is to address the requirement based on the consumer need.
In conclusion, stay consumer-centric. Ask yourself, what are the specific needs of the consumer and how does the chosen solution address those needs in a way that creates a benefit? The answer to this question will clearly identify whether a value (low flexibility, low cost Wi-Fi) solution or premium (high flexibility, higher cost small cell) solution is your best hotspot solution and the answer will vary for different customer applications across the network. Embrace the best of both technology options and think about how it is possible for a family to have both a Toyota and a Lexus in their garage.