Mobile operators know they need more spectrum, and many are realizing that not all spectrum comes at a price. Unlicensed spectrum, traditionally the domain of Wi-Fi, is squarely in the sights of mobile operators thanks to innovation from Qualcomm, Verizon Wireless, Alcatel-Lucent and several other companies that are researching ways for LTE to leverage free, unlicensed spectrum.
“I think all the operators will have some strategy to use the unlicensed spectrum,” said analyst Joe Madden of Mobile Experts. “After all, it is free spectrum and if you don’t use it you’re just throwing away a valuable asset.”
The question is how operators will use unlicensed spectrum. Some have already invested in Wi-Fi network equipment with the goal of integrating Wi-Fi into their service offerings.
“If the operator uses the unlicensed spectrum and buys the equipment, what difference does it make whether it is LTE or Wi-Fi? Subscribers would not even know,” said analyst Monica Paolini of Senza Fili Consulting.
But so far, most operators have not been successful at bundling Wi-Fi service into mobile phone bills. Madden forecasts that mobile operators will spend roughly $900 million on Wi-Fi equipment this year, but see only $270 million in Wi-Fi service revenue.
“That market is absolutely upside down,” he said. “The service revenue should be more than what they spend on equipment. The way out of that is with things like licensed-assisted access or LTE Wi-Fi aggregation. That’s where [carriers] can use the unlicensed bands to carry the data and send the bill to the customer as if it was LTE data. So I think that’s the way the industry is going to evolve.”
Paolini agrees that operators will move toward LTE in unlicensed spectrum. Some will move toward license-assisted access, in which mobile data moves from one network to the other seamlessly. Others will favor LTE Wi-Fi aggregation, which aims to dynamically choose Wi-Fi or LTE, depending on the stronger connection.
“I think that LAA is going to be more attractive to operators (e.g. Verizon) with more limited Wi-Fi experience and LWA to others (e.g. AT&T) that are more Wi-Fi friendly,” said Paolini. “But if we have a split between LWA and LAA, it will complicate things on the device side – and that’s especially challenging for LAA, because you need new devices and vendors may decide not to support LAA. If Apple or Samsung [does] not support LAA, for instance, the chances for LAA to survive are slim.”
LAA has strong support from Qualcomm, the leading maker of LTE modems. Qualcomm said that LTE and Wi-Fi make “great neighbors,” meaning that each can both perform better in the presence of the other. The chipmaker is working on LAA with Verizon Wireless.
“For the companies that have the strongest LTE networks, you can look at them moving toward license-assisted access, where every data session is anchored on an LTE control channel,” said Madden. “Ninety percent of the data may fly over an unlicensed band, but it’s still anchored on an LTE control channel. It’s the smaller operators and regional operators and others that will be more inclined to do LTE Wi-Fi aggregation.”
Madden’s comments on LAA and LWA were made during a recent RCR Wireless News webinar, available here.
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