The opening battles of the 5-GHz spectrum war have seen insurgents (the cellular industry) and incumbents (Wi-Fi) clashing via various standardization groups, establishing “fairness” measures for sharing limited spectrum. But little thought has been given to go-to-market strategies for LTE-U and LAA. Without a clear view of how the equipment will be sold, installed and supported, cellular-in-unlicensed technology will fail in the marketplace.
The fundamental LAA infrastructure product is a small-cell, combining a cellular eNodeB and a 5-GHz radio in the same enclosure. Traffic between the small-cell and user device is split or steered between the two radios, with some level of coordination. The benefit is higher bandwidth available to the device, especially useful in crowded areas with high user-density. Small-cells are also useful to remedy coverage blackspots like basements and some modern office buildings, although it can be argued that the 5-GHz radio is not required in this scenario.
Since the 5-GHz radio is subject to the same rules as Wi-Fi, it will have similar range, considerably less than the cellular radio. Therefore deployment scenarios are limited to Wi-Fi-like topologies with cells spanning 20 to 30 meters indoors and 30 to 80 meters outdoors.
Three markets are available. In city centers, the cellular operator benefits from higher network capacity without the need for more licensed spectrum. This is the easiest opportunity, but it is too small to support a small-cell market by itself.
Managers of public-facing enterprises, from airports to hospitals, struggle with cellular coverage and capacity. Their customers need to be able to pull out their phones and get good service: all too often today, they cannot. This is a good market for small-cells: there’s a need, and the beneficiaries are customers of the venue so there’s a fairly direct ROI argument.
Meanwhile, private enterprise CIOs have long struggled with poor cellular coverage in indoor areas. Many would welcome a flexible, inexpensive way to deploy indoor cellular coverage for their employees.
To be commercially successful, small-cells need to become pervasive in public-facing enterprise and significant in private enterprise. But despite significant demand in these markets, small-cells face go-to-market challenges. First, who would do the selling?
Pure-play cellular operators have never been successful in selling equipment-based services to enterprises. While most run business sales teams, the focus is on SIM card bundles and service discounts. To sell small-cells, operators would need to develop sophisticated, high-touch sales-teams that understand LANs and WLANs and have the expertise and patience to handle a 12-month sales cycle. Similarly, cellular equipment vendors have had very little success in developing enterprise sales-teams. Most do not possess these sales skills, and have no appetite to develop them.
Instead, both operators and small-cell vendors will explore relationships with enterprise networking vendors and their channel partners: they know how to sell sophisticated networking equipment to enterprises. But networking vendors already have Wi-Fi offerings as established, core products in their portfolios. It will be hard to make room for a new set of products that require considerable expertise to plan, install and support, and that have at least some competitive overlap. And channel partners considering small-cells face considerable training costs.
Finding and training a sales and support channel is difficult. But even after the route to market is settled, the selling proposition is complicated. Because a small-cell uses licensed spectrum, the license holder – an operator – is responsible to ensure its RF configuration is compliant. This implies that the enterprise must share ownership and management with the operator.
And if the enterprise has an existing WLAN, it will have to share spectrum with the new 5GHz small-cell radios, which again implies coordination between the groups managing small-cells and the WLAN.
Meanwhile planning, installation and support will be considerably more expensive than the WLAN industry is accustomed to, and it is questionable whether these costs can be passed to the end customer.
And enterprise decision makers, once they realize that the solution inevitably has technical challenges at this stage of evolution, will be concerned about placing their customers’ satisfaction in the hands of third-parties (operators and their designees) with a limited reputation for responsive customer service.
These are some of the go-to-market challenges facing LAA. They are not insurmountable, but require at least as much attention as the standardization efforts and equipment design.
The most obvious path is to ride the WLAN-as-managed-service trend, where the enterprise contracts for service at a monthly cost rather than purchasing and installing hardware. Where the service provider is also a mobile operator and can keep the coordination in-house, LAA hardware and support can be added to the contract with much lower organizational friction.
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