Wireless and Cellular: Competition and Cooperation

Carl Weinschenk

An interesting report from ABI Research compares the energy costs of various types of mobile services. The release is a bit ambiguous, but a look at the report specifics reveals that the study covers both base stations and mobile device powering.

 

It's well established that many existing and emerging mobile platforms provide similar services. That reality is tacitly acknowledged in the growing trend of combining Wi-Fi and cellular circuitry in the same handset. The idea is to enable users to jump from one platform to the other as conditions dictate. Where both systems are available, the phone can switch to the preferred network. In many cases, that means the cheaper wireless network.

 

Usually, the determining factor is the cost of spectrum. In this study, the measuring stick is different, but the result is the same: In a given scenario, wireless approaches such as Wi-Fi and WiMax are less expensive.

 

You don't need to be a fortune teller to say that the biggest factor in how the telecommunications world will look a decade from now will be the cost of providing service. The landscape is being carved out today. Legacy phone companies, for instance, spent the last century perfecting their platform and creating a national footprint. Far cheaper VoIP came along and, once its quality was up to snuff, began taking market share. Indeed, the impact was so great that legacy providers were forced into the VoIP game themselves.

 

Since its services are carried on ubiquitous PSTN and cable lines, the VoIP industry was able to quickly match legacy network coverage. That's not the case in the wireless world. It will take Wi-Fi and WiMax providers quite some time to replicate the broad national cellular footprint available today. Indeed, they may not even wish to. This means there are more areas for cooperation.


 

The result is that wireless and cellular companies must compete and/or cooperate on a more fluid, case-by-case basis. In scenarios in which both offer services -- urban and suburban areas, mostly -- total cost for a given amount of network capacity will be the main factor. Spectrum and powering costs will be keys to those equations.

 

In many of these cases, Wi-Fi and WiMax will win, simply because they are the far less expensive approach.



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