Colin Here. My company asked me to speculate a bit of where I see cellular service being in 10 years. The purpose was so that we could develop a global strategic direction, so I have sat with a number of IT and telcom people and walked away with a possibly unique, but profoundly radical view.
Wi-Fi will be a huge part of cellular service in the future. Cellular service as we know it is fundamentally doomed.
In the past we have used 850 to 2100 MHz frequencies to provide cellular service. But as the networks have filled up problems have emerged. There isn’t coverage everywhere and in densely populated areas there isn’t capacity. The Catch-22 is that a carrier is doomed to poor coverage if it has no customers (like t-Mobile) or doomed to poor service if it is big (like AT&T.)
But there is an answer. That answer is Wi-Fi Hotspot 2.0
Cellular companies have moved to an “All you can eat” plan. They get a flat-rate fee for unlimited use. In major cities their networks are choked. In rural areas it doesn’t pay to build towers. It’s just a bad situation.
Consider a three tiered routing model:
1. Calls are routed over Wi-Fi (50-foot radius cells)
2. Calls are routed over 850~2100 MHz cellular. (2-mile radius cells.)
3. Calls are routed over 700 MHz cellular. (50 mile radius cells.)
Wi-Fi is used to offload all traffic in offices and homes and densely populated areas. This vastly extends the capacity of cell towers.
Where there is no Wi-Fi then calls route over conventional 850~2100 MHz towers. These have much less traffic because most calls go over WiFi. These towers just fill in the Wi-Fi coverage gaps.
Finally, 700 MHz cellular is used to fill in the broad swaths of the United States. Your call is routed on 700 MHz (such as “A-Block”) only if there is no WiFi and no 850~2100 MHz available.
Wi-Fi has a usable range of about 50 feet. It has huge bandwidth but not much range. But there tends to be Wi-Fi where people congregate.
The new player in this picture is 700 MHz. This little understood and unused frequency has giant cells that can be 50 to 75 miles in diameter. 700 MHz penetrates elevators and walls and, well, pretty much everywhere. The problem is that these mega-sized cells cover such a large area that they cannot serve very many people.
Verizon just dumped some of the 700 MHz bandwidth they own because its not very useful to them. The huge-sized cells just don’t fit into a high-volume carrier like Verizon. T-Mobile picked them up, and here’s a shocker but I think T-Mobile is smarter than Verizon.
You see T-Mobile needs to fill in the gaps and 700 Mhz is perfect for that. Then, they can use their 2100 and 2300 bands to cover the metropolitan areas. Wi-Fi would be used to offload traffic from the 850~2100 bands. It’s pretty perfect.
Today, Wi-Fi isn’t well suited for cellular because you really can only access hotspots at home and work. That is where Hotspot 2.0 comes into play.
With Wi-Fi Hotspot 2.0 you can get an authenticated, secure connection without any affiliation. Imagine Boingo that just automatically connects anywhere and everywhere as you pass through. Perfect!
So with this architecture T-mobile wins big-time.
Once Hotspot 2.0 starts to be deployed in the next 2 years, T-Mobile can start siphoning traffic off to Wi-Fi. They already have 5 years of experience with this through their Wi-Fi calling initiative. They have just purchased 700 MHz A-Block from Verizon, so they can get their badly needed coverage.
The only missing piece is Apple: Apple needs to be able to re-route cellular traffic over Wi-fi when it is available. This isn’t complicated, but a profound change. Wi-Fi is the answer for offloading our congested cellular towers.