 | Issue: | Europe I 2013 |
| Article no.: | 5 | |
| Topic: | Connecting the enterprise is the future for mobile operators | |
| Author: | Ronny A. Haraldsvik | |
| Title: | CMO | |
| Organisation: | SpiderCloud Wireless | |
| PDF size: | 322KB |
About author
Ronny A. Haraldsvik is CMO of SpiderCloud Wireless. Mr.Haraldsvik is a Silicon Valley veteran with over 23 years global strategic marketing and industry experience in a range of technology segments.
Ronny Haraldsvik holds a BA from the University of San Francisco.
Article abstract
Heterogeneous networks have arrived. Scalable small cell systems are beginning to have impacts in metropolitan public access markets, and are evolving to include all access technologies in various form factors. Small cellsystems that can enhance indoor coverage for firms that require greater capacity in large office buildings are now available. Such systems can scale to the demands of the enterprise marketand offer significant opportunities to mobile operators.
Full Article
We are currently in the midst of a mobile industry in transformation – the most rapid change we have seen from the RAN equipment and services players since the move to 3G over a decade ago. With the relatively recent inclusion of Wi-Fi as part of outdoor macro networks and coffee and retail shops and femtocells as a useful standalone access point for residential and small businesses, ‘small’ is here to stay. The days of heterogeneous networks are upon us.
Access points that embed 3G, Wi-Fi and LTE functionalities into a small cell form factor as part of the overall macro network, lovingly referred to as HetNet, is growing in importance as small cells are in strong consideration as infill networks for dense metropolitan areas where they complement the ‘traditional’ macro network.
Scalable small cell systems are in the early days of making a bigger impact in metropolitan public access markets, and evolving to include all access technologies in various form factors. The next battleground is for sustainable average revenue per user (ARPU) and the enterprise markets with multi-mode, multi-access small cells that can scale to the demands of the enterprise.
This is not marketing hype, this is reality. In February 2012 Vodafone announced that it would be trialing SpiderCloud small-cell systems in the UK. SpiderCloud’s technology was incubated inside Vodafone Group’s Research and Development division over two years. As part of this process, Vodafone helped the company assess the commercial need for the solution, provided laboratory facilities and helped run both technical and field trials. At the time, Luke Ibbetson, Head of R&D – Network Technology at Vodafone stated: “This innovative solution is designed to enhance indoor coverage for firms that require greater 3G capacity in large office buildings in a simple and affordable way.”
Enterprise customers
Mobile operators want to acquire and retain valuable enterprise customers. For the next few years, ARPU growth for Western and USA operators will come from the medium to large enterprise segments. In many countries, ARPU for enterprise subscribers is twice as much as the ARPU for consumers. Employees of mid-to-large sized enterprises constitute 15 percent of subscribers at major mobile operators like Vodafone, and contribute as much as 30 percent of their revenue. These enterprise customers are not only the most loyal and profitable customers that mobile operators have, but also the most demanding. They expect the mobile operator to deliver seamless wireless coverage in their facilities, to stay ahead of the rapidly growing demand for wireless capacity, and to offer innovative ways to solve business problems.
Often, enterprise subscribers are willing to purchase new services from operators, ranging from international roaming plans to mobile device management. However, to win these customers, mobile operators must provide high-capacity networks where business customers spend more than 80 percent of their working hours – indoors. Enterprise small cells have emerged as the most promising technology to deliver high-capacity and 3G coverage inside offices.
The inside enterprise opportunity with a lower cost and more flexible system that can be deployed by-enterprise, by-floor, in days and not nine or more months, also means that operators are making better use of licensed spectrum indoors which has a positive impact on resources used by the outside macro.
SpiderCloud’s own findings show that as many as 90 percent of medium to large enterprises in a metro area have cellular indoor coverage and capacity problems – which currently cannot be addressed cost effectively by mobile operators. When properly accessed with a lower cost and scalable small cell solution, the amounts of pockets of unused licensed spectrum inside metropolitan and campus office buildings in New York, San Francisco, London, Beijing, Singapore, Paris and Barcelona could mirror the importance of discovering and using the world’s largest crude oil deposits in Ghawar (Saudi Arabia) in 1948. Mobile spectrum (licensed) is the digital oxygen, and our industry’s equivalent to crude oil deposits.
But, scalable enterprise small cells cannot fulfill their potential without a deployment architecture that meets the performance expectations of enterprises and the business requirements of mobile operators. Enterprises expect small cell systems to provide seamless voice coverage, LAN-comparable mobile data throughput, and integration with local applications. Mobile operators need a solution that can be rapidly deployed, minimizes operating costs, is easy to manage, and scales – from small offices to huge multi-story buildings.
Enterprise mobility is a coverage challenge for operators and ironically, the biggest challenge is when there is a lack of mobility. As campus sites or buildings are located inside a single macrocell and everyone inside the cell is using the same spectrum, you can quickly see how coverage and capacity can become major issues. New buildings create an even bigger challenge where ‘green’ UV glass almost acts like a barrier for any signal from the outside tower.
IT challenges
There are IT challenges to overcome with regard to Bring Your Own Device (BYOD) and the role of the mobile operator and its vendors in meeting the call for help. Some of the most common questions addressed by enterprise CIOs are summarized as follows:
• Can enterprises trust operators to manage their mobility needs? Yes, if the operator is taking a neutral approach to IT services that must be supported across all the enterprise’s devices. A device management offering for iOS, for instance, must be offered for any iOS device and not just the operator’s.
• Can employees who bring their own device be supported by the operator’s offering? Yes, there are a number of operators who are already offering various device management environments. They are available in both cloud and on-premise formats to cater to the security concerns of the subscribing customer.
• How will services be priced? The services are offered in a managed service or traditional package. Managed service – the employee enrolls in the enterprise’s chosen service via the operator’s portal and the cost is added to a monthly bill sent to the enterprise. There is no capital expense involved as the monthly charge encompasses licensing and operations. We have seen public numbers in a monthly range of US$3-6 per month per device. Traditional – a perpetual software licence as a capital expense, annual licence maintenance, and an operations expense to run the service. This varies widely depending on the underlying technology.
In 2014, enterprise services around mobility will need to be offered as a massively scalable, operationally repeatable commodity. With the potential industry consolidation of many of the founders of mobile management into the portfolios of the industry’s systems providers/mobile domain experts (Ericsson, Cisco, Juniper, SAP), much of the solutions around small cells for coverage/capacity, device management, and other enterprise mobility needs as a one stop transaction in the monthly device bill will be closer to reality.
If you’re a mobile operator, adding more outside base stations, towers or more antennas is costly and may do more harm than good, since radio interference creates black holes of zero coverage. Furthermore it will not solve indoor coverage, capacity and mobility issues inside an enterprise.
The ‘traditional’ fix for this type of single site coverage issue involves a distributed antenna system (DAS). A DAS is effectively a network within a macrocell, and given the challenges of managing seamless handoff and radio interference, it is every bit as difficult and expensive as it sounds to set up. Cellular base stations are not plug and play wireless routers, network planners and engineers are highly trained and expensive. DAS roll-outs can take 9-24 months to plan and implement, considering building and local governance approvals. This is most often the solution for an entire high-rise building (250,000 sq feet) or a large company (5,000 to 100,000employees) willing to pay its own way to solve the problem.
Femtocells
For small businesses with less than 100 people, a less expensive but less scalable solution is the Femtocell. These cells first appeared on the scene shortly after 3G appeared which speaks volumes for the effectiveness of 3G indoor coverage. Femtocells are essentially residential or SME cellular routers. They operate much like a Wi-Fi hotspot, where each femto needs a broadband connection to the mobile network, and then each femtocell has a certain coverage area within which a limited number of users can make and receive calls. However there are mobility limitations when more than seven to tenfemtocells are deployed.
Sitting between DAS and femtocells, which can serve 100 to 10,000 people, are new multimode small cell systems that can scale to cover an office on one floor, many floors, offices in numerous locations or even campus areas. The managed and scalable system is deployed and operated by the mobile operator and can provide reliable 3G, 4G and Wi-Fi coverage and capacity wherever there’s a LAN – with no mobility issues for voice and data, thus removing any BYOD concerns by enterprise IT. The scalable small cell system, using the best from femto, WiFi and macro cellular networks, can be deployed in just days, opening up opportunities for operators and enterprise customers.
Goldman Sachs expects small cells to drive 18 percent of RAN investment by 2016. The profound statement here is that the 18 percent may be able to handle as much as 80 percent of all the traffic. For proper context, keep in mind that indoor/outdoor multi-mode Wi-Fi/3G/LTE is part of this equation.
Enterprise small cells have emerged as the most promising technology to deliver high-capacity and 3G coverage inside offices. Analyst firms such as Infonetics, ABI Research, and Informa expect enterprise small cells to be the fastest growing segment of the small cell market. Infonetics Research expects enterprise small cells to grow fastest, contributing to over 50 percent of small cell investment by 2016.
ABI Research predicts small cells for enterprise deployments will catch up with DAS by the 2016 timeframe – reaching the US$2 billion mark by 2016.
As we look to 2020 and ignore some of the ‘noise’ in between now and then, the pragmatic view is mobile networks will become more capable and agile with the use of macro and small cell networks to better handle capacity requirements from consumers and enterprises. Since we will likely not see a 3GPP ‘5G’ term, we’re talking about a common service network infrastructure where macro/micro/small cells work in close tandem with intelligent physical and virtual routing of access and services. In simple terms, vendors will help operators make better use of what they have, to deliver more capacity, when and where it’s needed – creating big opportunities for mobile operators to help enable the future of the mobile enterprise – today.
