Understanding LTE-Unlicensed // July 2015
Editor's Note
LTE-U Attracts
Controversy and
Industry support
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>> LTE-U Attracts Controversy and Industry Support
how much? And would this happen in the short or long
term?
"LTE-U can drive savings in two ways," said Ali.
"Saving on licensed spectrum by allowing operators to
expand their capacity using free unlicensed spectrum,
and saving on carrier Wi-Fi network integration.
However, operators' reliance on unlicensed spectrum
is limited and won't affect future plans to acquire and
utilize licensed spectrum, so I don't see major savings in
this aspect." As for the advantage over building a Wi-
Fi network, the operator would still need to build an
LTE-U small cell network, which in terms of equipment
cost is more expensive than Wi-Fi.
Gubbins doesn't see the debate as one of money, either.
"For operators, the primary benefits of LTE-U/LAA
are about adding capacity in the face of finite spectrum
resources and using a common, unified management
for LTE that's simpler to operate and maintain than
converged LTE/Wi-Fi networks. Thus, the benefits
aren't usually framed in terms of direct cost savings."
In other words, don't expect operators to be saying, "I
don't need to participate in this expensive spectrum-
license auction because I've got LAA." However, in the
long term, Gubbins expects the unified management
aspect to start yielding some cost benefits over a more
bifurcated LTE/Wi-Fi platform. Also, if the expected
performance benefits—increased capacity, smoother
management, improved visibility into network
performance—provide a better experience for users, it
could grant economic benefits to operators in terms of
increased service revenue and decreased churn.
"As far as saving money," said Manjaro, "operators will
still need to purchase spectrum and equipment for the
baseline macro network build-out. They will only use
unlicensed in urban or denser areas to fill coverage gaps
and increase capacity. In some ways, it will be used
similarly to how Wi-Fi is used today. Since there will be
limited deployments, it will take some time for the price
to be reduced based on volume, so initial infrastructure
costs will be high."
Wait and see
Ali has yet to find a convincing business model that
offers incentive for enterprise and end-user customers
to use LTE-U in the presence of free Wi-Fi services.
Qualcomm and equipment vendors argue that LTE-U
is more efficient compared with Wi-Fi ("which sounds
like they're attempting to replace Wi-Fi!" he said), but
if it doesn't result in a considerable reduction in mobile
data prices, it can't compete with free and already well
established Wi-Fi services. n
"Almost all of the major small-
cell vendors have promised to
add this capability [LTE-U] to
their products within the next
12 months."
ED GUBBINS, SENIOR ANALYST, WIRELESS
INFRASTRUCTURE, CURRENT ANALYSIS
