Cellular29.06.2014

Why are we still waiting?

Raise your hand if you do not have sufficient cellular network coverage in your house. If you are reading this in a public place, and worried that other people think you are doing your yoga exercises a bit late, a swear word will suffice.

It may even be the same swear word I often use as I try to keep perfectly still to get a 2-bar signal, hanging on to the gutter outside my second floor balcony. It is then that I give in and contemplate asking a network operator to erect a 40-foot cellular palm tree in my garden, hoping that my neighbours would be none the wiser.

Let’s face it: No one wants a large cellular tower next to their house, yet everyone complains if cellular coverage is all but non-existent. What can be done to ensure that we can at the very least use our mobile phones at home and in our offices, other than patently waiting for the 800MHz LTE network?

The medium term answer is there, albeit an expensive one. Small cellular cells called piconets or femto cells (that transmit about the same energy as a WiFi hotspot), which are affixed to street lamps and installed within buildings and homes.

Their power transmission is low enough to keep all but the most paranoid bunny huggers content, while providing you with sufficient coverage to ensure that you can surf and chat without exposing you to the elements. But this is an expensive option, and may not materialise in the short to medium term in sunny South Africa.

The funny thing is that a solution to our communication headaches already exists. A part of the solution is the WiFi hotspot in your house or office, and another part is a Voice over IP app on your smartphone.

The only part that is missing is a cellular operator that can divert a call to your normal cellphone number to the app on your phone.

Imagine the pleasure of simply opening an app and making or receiving an uninterrupted call from your existing number from anywhere in your house, instead of having to affix a handle to the gutter on the second floor balcony.

The reasons for the Operator’s apprehension are clear. Once people start making a mind shift and start making and receiving calls via apps at office and at their homes, they may just start considering making the majority of their phone calls on other VoIP services outside their control, and this is a bigger threat to operators than they care to admit.

Any CEO of a technology company should know the 20 Laws of the Telecosm by heart. These laws, penned by George Gilder almost 14 years ago, provide a deeper insight into the realities of a world with near abundant bandwidth. Laws 5 and 16 make for some interesting reading:

5) Shannon’s Law

Digital communications efficiency declines as power increases, or, conversely, efficiency increases as power weakens. Increased electrical power means more dispersion and nonlinearity in fiber and more interference in the air.

Reducing power expended per bit enables exponentially increasing bitrates. The rise of digital implies a constant preoccupation with reducing the power usage of every component of the information infrastructure. The future of networking lies in small, long-lasting batteries, powering lots of devices, joined together in a massive web.

16) Huber’s Law of Geodesic Networks

Putting together Shannon’s law with the law of bandwidth efficiency produces a vision of the kind of networks that will prevail. As coined by Peter Huber, they are “geodesic”: short-connection, multipoint, dense arrays. The higher the frequency, the shorter the wavelength, the wider the bandwidth, the lower the power, the smaller the antennae, the slimmer the cells, the cheaper and better the bandwidth.

What do these laws imply for the future of operators? It is quite simple: Win the battle of the building.

The companies with the real power within the digital value chain are those that control the operating system on the handsets. As intelligence has migrated from the core of the network to the periphery, so has the profit and economic power.

This means that the device itself will choose the most optimal communication path as far as cost and quality is concerned. The new Samsung S5 optimises its downloads speed by using both the LTE and WiFi networks a the same time The LTE network is provided by the Cellular operator, but the Wifi signal could be provide by anyone.

As true 4G connectivity means that voice traffic is simply a subset of data traffic, the question arises. Whose client is anyway if half of the data packets (and voice call packets) are rerouted trough a WiFi hotspot?

As ownership of clients and network lock-in become more and more permeable, the final battle will end in the VoIP app that you use on a continuous basis. Will it be the one that the Operator provides, or will it be an over the top (OTT) application like Skype?

If Operators only switch traffic coming through their own Radio Access Network (RAN), it might miss the chance to leverage the huge opportunity that the WiFi cloud will enable.

The operators currently make life difficult for VoIP OTT players, as the quality of the call is directly related to the operator’s treatment of these data packets. Network neutrality legislation will however be the final nail in the coffin of out-dated operator business models.

Will operators finally wisen up to this reality and claim a stake in a new network architecture, or will it try to hold on to declining voice call revenue streams until they are eclipsed by the juggernaut of technological evolution.

Irrelevant of these answers, the company that controls the small cell space within a building will be in a far more advantageous place to ride the approaching tsunami. What a surprise then to notice players like IS, MWEb and Telkom dominating this space instead of the cellular operators. I think I may smell some M&A activity in the near future.

These are the questions I ponder as I desperately hang on to the gutter to make my voice heard.

Pieter Geldenhuys is an internationally renowned Conference speaker, Futurist and Technology Strategy consultant. He is a faculty member at the Potchefstroom Business School, Northwest University. You can find him at pietergeldenhuys.com