Forget what you know about mobile data networking. The cellular carriers got it all wrong. Actually, forget about the cellular carriers too. The future is in swarming, self-organizing cell sites owned by individuals.
This disruptive view of mobile data networking comes courtesy of Norman D. Fekrat, chief strategy and revenue officer at Lemko (News - Alert) Corp., a keynote speaker at the recent Software Telco Congress in Santa Clara, Calif.
Fekrat, whose speech was called “The Consumerization of Mobility”, talked about how cellular service providers spend a lot of time discussing the great new opportunities that widespread LTE (News - Alert) will deliver, the lack of spectrum availability, and the most efficient way to build networks. Some folks suggest we use orchestration for better network performance and flexibility, he said, but orchestration is complicated; before jumping in, he said, operators need to make sure this approach is worth the time and the trouble.
The first order of business to improve things is to look at the metrics that matter for cellular companies. Financial analysts that follow the mobile industry have it all wrong, Fekrat said, because they’re using voice-related metrics like subscriber numbers, ARPU, CPGA, and churn to measure value and risk. The metrics they should analyze are cost per gigabit, profit per gigabit, and to what extent carriers are making a profit on their spectrum.
The problem in the industry is that mobile data, and mobile video, are growing tremendously, and the cost to support that is growing prohibitively, Fekrat noted. That’s why broadband operators are offloading traffic to Wi-Fi, he said. So what we should really be talking about – and finding answers for – is how to reduce the cost per gigabit on mobile networks, he said.
Instead, cellular operators have been overlaying 2G networks, with 3G networks, and now 4G networks. But even though 4G LTE is now here, at least in some areas, unlimited data is going away. Costs aren’t coming down as networks gain speed; instead, Fekrat said, carriers are offloading their costs on the consumer.
And while mobile operators promote the idea there’s a spectrum shortage and lobby for more licensed spectrum, cellcos – which have yet to role out LTE in buildings or rural areas – are not fully monetizing the spectrum they have. At the same time, they’re relying heavily on Wi-Fi for offload, he said, which is curious since Wi-Fi runs on unlicensed spectrum.
Fekrat went on to say that there is no value in evolved packet core networks, which he said were engineered as if for voice. Backhauling to a proprietary Layer 2 network just to get to the Internet is costly, he said, on the order of $10 a gigabit. Meanwhile, wireline is around 15 cents a gigabit, he said.
Mobile needs to be more like the Internet, using Internet economics, he continued. CDN and caching work great in wireline, and the wireless camp should use it too, he suggested. Reengineering mobility for Internet economics should also entail applying other IT, IP and wireline principles so mobility isn’t so hard, he said. That, according to Fekrat, should include:
- virtualized distributed edge mobility – plug LTE into the Internet (any IP);
- proximal communication and content – enable peer-to-peer communications between cellular radios;
- mobility in motion – swarming, SON, ad-hoc bring your own network; and
- mobility as a service – personalized mobile networking and mobile chipsets.
“The point here is: Virtualize it, don’t keep it centralized,” said Fekrat.
“Enable peer to peer communications. The cell sites should talk to one another,” he said.
“If we virtualize the whole EPC, we can run it anywhere we want – run it on a silicon chip,” he said.
Here Fekrat exposes Lemko’s long-term vision. The 10-year-old company sells software that can be used to power 2G, 3G and 4G mobile networks using any air interface running on any spectrum. The Lemko software can run on any hardware, and Fekrat explained that the company’s goal is to get the software to run on the cheapest hardware possible. Today that means running on a 1RU x86 blade on the edge of the network. It can also run on an integrated circuit board on the edge. But the ultimate goal is to run the software on a silicon chip, and Fekrat said Lemko is seeking out and negotiating with companies to build such a chip.
Once Lemko gets its software to a silicon chip there’s no reason Amazon can’t with a Kindle platform sell its own wireless network, said Fekrat.
“This is really a bring your own network capability,” he added.
Radio is a low-cost commodity play, he said. The interesting part, he added, is Lemko’s strategy to interconnect and backhaul to the Internet directly from the edge so you don’t have to backhaul. That means big savings, he said.
Despite Fekrat’s earlier comments about making cellcos obsolete, it should be noted that wireless carriers such as rural WISPs already are using Lemko’s solutions. (The government, including the military, is too.)
To date, Lemko has focused on serving tier 2 and 3 carriers. But recently, and in light of the rollout of LTE, Fekrat said Lemko also is getting a lot of interest in its solutions from tier 1 cellular companies in the U.S. and Canada. In fact, the company already has gone through tier 1 certification in Canada, where a tier 1 is deploying it solution in an effort to monetize its spectrum in buildings and rural areas. The large U.S. cellcos are also looking at using Lemko software to fill and make money on their dead zones and to improve their margins on unprofitable cell sites by replacing equipment at those locations with the Lemko solution.
When asked how this relates to the small cell movement, which is also aimed at filling coverage gaps and addressing in-building coverage, Fekrat commented: “We make small cells profitable.”
Edited by Stefania Viscusi