LOS ANGELES — As more services collide on mobile networks, the business models that support the entire wireless ecosystem are being strained like never before.
Services and business models are all colliding while the development of a new ecosystem from the likes of Google Inc., and Apple Inc. is bringing about an inflection point like never before for the wireless space, said Phillip Marshall, principal and chief research officer at Tolaga Systems Inc.
During his keynote at the LA Broadband Summit last week, Marshall noted that each player is looking at these new challenges through their own lens.
“The challenge for the industry as a whole is that they’re all coming at it from different directions,” he said. “You have players who just think about the transaction and just look for volume.”
The end result of all these business models colliding on networks against the backdrop of challenging economics is that carriers have to rethink their long-range plans, he said.
Most importantly, they have to ensure they have a viable business model going forward, he added.
“Within the value chain there’s players that have different rates at which they create value as well as what the market expects them to do,” Marshall said.
Networks will have to create new infrastructure that reduces friction on bandwidth and capacity.
“(Carriers) need to think about distribution and ways in which they manage the transaction,” he said.
“It’s inevitable that this traffic growth is going to continue unabated,” Marshall added. “A pent-up demand for the mobile Internet is driving tremendous pressure on the networks.
While migration to new radio technology like LTE or WiMAX is important, it won’t be enough, he argued.
“The idea here is that you’re trying to squeeze more performance out of the radio waves, a scarce spectrum resource,” he continued. “There’s a very important relationship between how many cell sites you need and how much spectrum you have.”
When compared to the density of wireless networks in Europe, for example, it’s clear that much more can be done stateside to avail sites to more towers. He told the audience that the average cell site in the United States covers 16 square miles.
“As we’re looking at the availability of resources for deploying cell sites … we need to be thinking of that with a level of attention that reflects it’s almost as important” as spectrum, he said.
“There are fundamental limits on what you can squeeze out of spectrum and particularly when you deploy it over a wide area,” Marshall said.
“We’re getting to that fundamental limit,” he concluded.
@ LA Broadband Summit: Spectrum is scare, but towers are just as important
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