The spectrum auction concluded on May 12 raising over C$755 million (US$624 m). Telus was the biggest spender with over C$478 m to secure 1339m MHz-PoP.
Canada 2500 MHz Band Plan
The blended cost per MHz-PoP for the overall spectrum auction is C$0.28 /MHz-PoP. Continue reading
There has been a flurry of activities related to wide-area Internet of Things (IoT) connectivity. The market recognizes that existing technologies, and more importantly business models and cost structures do not scale to meet IoT application requirements. A number of competing solutions have emerged and are today vying for commercial validation which scales through standardization. Hence, there is a strong push in standard organizations such as 3GPP and GERAN to develop and adopt IoT connectivity techniques. Additionally, investors who recognize the opportunity created by potentially disruptive models and the need to hedge existing investments have embarked on making strategic investments. It is against this background that we provide this brief with a summary of related opinions we developed based on multiple engagements in this space. Continue reading
DSL and LTE bonding is a technology that have been hovering under the radar, not receiving the attention it deserves. A few operators have been experimenting with it, and some deployed it. Vodafone targets the solution at the enterprise sector, while Deutsch Telekom sees it as complementary service in rural areas. DSL/LTE bonding combines a DSL modem with a LTE UE modem at the user side along with integration in the core network to allow supplementing the service of one technology where the other falls short. It reduces bottlenecks in performance so for example when xDSL service slows to a crawl it taps the capacity of LTE. Having two separate links to the Internet creates redundancy of service and consequently increases reliability and quality of service. DSL/LTE bonding is a great technology, but I wonder if it can extend further to provide for additional applications. Specifically, can it be used as a platform for future device-to-device (D2D) communication? Continue reading
It seems many are convinced that the magic number for device cost in cellular M2M applications is $5. What should be the cost of a module, and how critical an issue is the device cost to start with, is a topic of debate and although I have my view on it, it is not what I will address here*. Instead, I like to focus on what needs to happen to get the cost to sub $5. So, how can we reach such a target price and what are the implications? Continue reading
The AWS-3 auction in Canada has wrapped up raising a total of C$2.11 billion (US$ 1.68b) in a sealed-bid second-price format that was completed in a day. Of the 50 MHz auctioned, 30 MHz was set aside for challengers like Wind Mobile, Videotron and Eastlink who paid just over C$98 m in total, or on average C$0.105 (US$0.084) per MHz-PoP, in what is considered a subsidy to these challengers in a market dominated by incumbents with overwhelming market advantage in spectrum assets and subscriber base. Industry Canada estimates that these operators increased their spectrum holdings by 107% on average, which is considerable. Mobilicity which has filed for Chapter 11 did not bid. Continue reading
If there’s a single theme to sum up this year’s MWC, it is the acquisitions that were announced. A number were announced and many are yet to be announced: NXP’s acquisition of Freescale ($11.8 bllion), HP of Aruba, Mitel of Mavenir, CommAgility of MIMOON are but a few examples. Consolidation is a natural outcome for an industry that transcends communications to offer multiple services including but not limited to entertainment, education, and financial services. So in a clear trend, we find more focus this year on how to enable mobile network operators (MNOs) generate more revenue as opposed to a focus on performance which is characteristics of past years. This represents a new level of maturity in a number of products and solutions that initially were brought upon as a mean to enhance performance but since have morphed into tools to generate revenue. It is also an acknowledgement that the status quo for MNOs characterized by eroding margins (EBITDA margins have dipped below 40% down from low 50% range a few years ago) has to change whereby data services are better monetized. Continue reading
Now that the AWS-3 auction has concluded, not without controversy which will continue to reverberate for some time, attention will shift to the incentive auction planned by the FCC for next year. Being the first of its kind anywhere in the world, I thought it would be a good idea to summarize some of the inter-working of this auction by highlighting some key features: Continue reading
The threat of over-the-shelf services (OTTs) to wireless network operators is well established, but as of yet, there is no clear answer as to how mobile network operators (MNOs) can ward off the OTT threat. This is evident by eroding margins where many large MNOs are now standing in the 30% EBITDA margin range, down from around 50%. The introduction of data service have eroded earnings as operators went into a high capex spending cycle to upgrade networks to LTE and meet anticipated capacity demand. MNOs also embarked on aggressive strategy to acquire new spectrum for the LTE networks which is perhaps best exemplified by the recent AWS-3 auction valued at $44.9 billion. All the while, MNOs have failed at capturing much additional value from the services they provide. The path to increased profitability will have to come from a combined effort to reduce cost while at the same time increase revenues. Finding such a formula is not straight forward and various attempts taken by MNOs to ward off the threat of OTTs have so far largely failed. Continue reading
Auction 97 for the AWS-3 band made headline news as operators spent $44.9 billion on 65 MHz of spectrum – a huge sum of money. But what’s behind the headline story; what do the numbers tell? Here are some of observations: Continue reading
We have released our annual Cloud RAN report with new insights and analysis on the development of this market during 2014. Cloud RAN is certainly gaining in interest in the operator community. This is due to practical reasons related to cost savings that can be realized first by the process of centralization and then by the virtualization of the radio access network. In our analysis of this market, we took a quantitative approach by analyzing the business case for different deployment scenarios (macro cell, HetNets) in different markets (Asia, North America), to determine a plausible evolution and market potential for Cloud RAN. The findings were extremely interesting as they exposed where Cloud RAN makes sense and under what conditions and use case scenarios. This is critical as Cloud RAN has impact on a number of other mobile network solutions such as small cells and distributed antenna systems (DAS). Continue reading
Wireless operators have quietly embarked on acquiring dark fiber – a trend that was picked up in 2013 and accelerated in 2014. Verizon is leading this activity and rolling out dark fiber to their cell site. But why specifically have carriers decided on dark fiber rather than continue lease capacity?
I think the answer has to be looked at from the perspective of long-term developments which matches the time-frame for leasing dark fiber which ranges between 10 to 20 years, and is typically closer to 20 years. Looking at that time-frame, we note that: Continue reading
The Internet of Things (IoT) is the catalyst for a number of new standards that will reshape wireless connectivity as we know it. Examples: Bluetooth LE, LTE-MTC, Zigbee, and LPWA standards. Wi-Fi (802.11) is also being reshaped to accommodate IoT applications. These applications have different requirements which make connectivity techniques for IoT fragmented. Competition is not limited to among these standards, but also extends to include proprietary protocols which makes developments in this space particularly interesting to watch in the next few years. Continue reading
It seems US wireless operators have crossed the bounds to the irrational in bidding on the AWS-3 spectrum. As I write this article, round 91 closed at over $43.74 billion for the 65 MHz of spectrum. That’s a gross average of $2.3/MHz PoP. To put this into perspective, the 90 MHz of AWS-1 spectrum in 2006 netted $13.7 billion at gross average of $0.54/MHz-PoP. In other words, the cost of AWS-3 is more than 4 times that of AWS-1. In fact, the cost of AWS-3 is more than 2x the cost of the 700 MHz spectrum which is considered superior because of better propagation characteristics that leads to lower infrastructure capex. Overbidding on spectrum in higher bands is doubly damaging. Continue reading
There has been much written about why Het Nets are needed (running out of capacity) and when it will happen (licensed band small cell centric view of Het Nets). On the other hand, how Het Nets will happen is rarely discussed in the general media. Perhaps this is because this is a very technical discussion that does not attract the attention but for the few engineers and managers directly tasked with making Het Nets work. Or maybe in our world today sound bites are all that matter and nobody has the time to ‘look under the hood.’ Whatever the case, the how of Het Nets is what matter most in the wireless networking ecosystem. Simply put, get it wrong and your are doomed. How Het Nets will happen is pivotal with high implications end-to-end because it is fundamentally based on competing technologies which while it may coexist in some limited circumstances, economics demands a winner to achieve scale. Continue reading
It’s official: The ‘Internet of Things’ (IoT) is at the peak of the hype cycle. It only took 15 years to get to this point, considering the term was first coined in 1999. But the IoT of today is quite different from initial thrust which was in commercial and industrial applications. Today, consumer applications lead the hype. IoT, or IoE (as in Everything), is now highly associated with gadgets in the mind of the general public. Gadgets are what whip up talk, excitement and hype. Tracking assets or performance of industrial machines makes for a dull discussion (unless that’s your business!), but everyone loves to talk about what the soon to be released Apple and Microsoft watches may do. All the hype makes me wonder how would one tell what will prove to be a fad and what will stick? What determines the staying power and commercial success of a device? Anyone dares to predict? Wasn’t it IBM’s Thomas Watson who said “I think there is a world market for maybe five computers.”? And, if you say that was in 1943, then how about DEC’s Ken Olson statement some 34 years later that “there is no reason anyone would want a computer in their home!” Continue reading