Microcapacity: Unbinding Wireless Capacity Through Trading Exchanges

bandwidth exchangeMicrogeneration allows one to generate electricity for own use, typically using renewable resources such as wind or solar energy. Excess energy can be sold to the power company. The arrangement helps in evening out the variability in energy consumption. It reduces the peak load requirements for the main grid while energy generated during non-peak hours can be diverted to where it is most needed. There is no reason why wireless cannot work in a similar way. I call this “mcirocapacity”: individuals, businesses and communities can generate their own wireless capacity and sell the excess capacity to the wireless carriers. The concept is not novel and elements of it have already been developed. What is lacking is the impetus to put it into practice. Simply put, the time is yet to be right.

Everyone agrees that the macro cellular network cannot address the future demand for capacity alone. Hetnets address the capacity issue by increasing the number of base stations through small cells. However, small cells cannot be deployed in the same manner as macro cells. The reason why small cell deployments are delayed is because the overall deployment and implementation framework is broken. You simply cannot take a process that applies to macro cells and scale it down to small cells. Instead, small cells deployments will have to grow organically. When individuals, businesses and communities deploy their own connectivity assets, the number of small cells will scale quickly – faster than any operator can deploy in a planned process. Wi-Fi is a case in point.  In fact, there is no reason why Wi-Fi, or another technology such as LTE-U, cannot serve as the microcapacity layer (in fact, LTE-U can bring microcapacity closer to realization due to tighter synergy with the macro cellular network). Whatever the technology used, an architecture closely linking the macrocell layer with the microcapacity layer will be required to provide quality of service.

Microcapacity can be traded to the wireless operators by allowing subscribers ‘roam’ on the microcapacity layer. This in itself is not a novel idea as exemplified by dark Wi-Fi and bandwidth exchanges for offload or roaming.  But applying it at a micro level and on a dynamic, on-demand basis is a concept that requires further development and maturity, as does the ability to route user traffic using different technologies on contextual basis.

With many of the elements of microcapacity existing today, what is lacking is the motivation to implement it. In fact, microcapacity has significant consequences on industry structure. For instance, market power would shift from the wireless operators to wireline operators. Transport is critical today, but in a microcapacity scheme, it gains significantly more emphasis because wireless has to be seamless and commoditized. Transport that connects the different grids becomes the critical piece of the puzzle – or the bottleneck. Commoditization of wireless may be inevitable as the trends suggest, but it will remain a hard-fought battle between the wireline and wireless operators. In fact, wireless operators have been significantly increasing investments in transport networks, specifically fiber.

Microcapacity may well be the key to hetnet deployments – i.e. true hetnet can only take off under a scheme where carriers can tap into user-deployed small cells. It makes for a model that ought to be well contemplated in the context of spectrum sharing schemes as well as license-exempt spectrum which is the fundamental tenet of user-deployed microcapacity layer. Emerging 5G technology can be the platform which enables microcapacity: 5G as a network of networks. The potential capacity that can be released for wireless services becomes boundless!


About Frank Rayal
Technology strategy, markets and M&As

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