A Call for Mobile Operators to Embrace Capillary Wireless Networks
Introduction: In the intricate biological systems of our bodies, the existence of capillary networks is fundamental. These networks, designed for proximity and efficiency, facilitate the exchange of nutrients, gases, and waste products between the bloodstream and surrounding tissues. This natural design inspires a technological analogy — the "Capillary Wireless Networks," a term introduced by Ericsson, emerges as a transformative force in revolutionizing the Internet of Things (IoT). The analogy parallels the vascular system, emphasizing the need for extensive and close-knit networks to optimize connectivity.
Evolving Wireless Connectivity Landscape: In the dynamic realm of wireless connectivity, Capillary Wireless Networks is not to challenge traditional cellular networks but to complement them. While the cellular 5G standard, driven by the 3GPP ecosystem, dominates the mobile broadband arena, a non-cellular 5G standard driven by ETSI focuses on IoT's massive device count characteristic. The non-cellular standard caters to distinct design objectives and economics in solving the last mile connectivity challenges. As always, with new technologies, the challenge lies in everyone adapting to this shift at the right time.
Economics of Cellular vs. Non-Cellular Approach: Examining the economics, the GSMA's Mobile Economy Report 2023 reveals that the mobile ecosystem generates a staggering $1.2 trillion in economic value, with mobile operators claiming 60%, infrastructure providers and chipset makers 10% each, the rest is services and distribution.
The calculations below are just indicative for the purpose of demonstrating the difference in magnitude.
Cellular Approach:
If we narrow it down to mobile operators, infrastructure providers, and chip manufacturers collectively, they contribute approximately $1 trillion in value.
With approximately 8.4 billion subscriptions, the average revenue per user for operators, revenue for infrastructure providers, and chip manufacturers corresponds to $119 per subscriber annually.
It is obvious that cellular has a fit only where the connectivity cost is not too sensitive a part of the ROI, like in the consumption of massive amounts of data with smartphones by consumers. However, this is far too much for IoT use cases.
Non-Cellular Approach:
Non-cellular networks, like autonomous RF mesh, significantly reduce the need for dedicated operators and infrastructure investment for local area networks. We can divide the portion of operators and infrastructure by 1000 with mesh technologies as they do not require base station infrastructure or operators (The number 1000 is a justified device-to-gateway ratio, e.g., in smart metering)
Chipset costs are also lower due to simple radios. For example, the radio front end can be made for single frequency instead of quad band when roaming is implemented in cellular and output power can be lower due to shorter links. 3GPP IPR fees are up to several dollars. Therefore we can assume half of the cost of cellular.
This results in a unit economy over a lifetime of about 20% compared to cellular.
A non-cellular unit economy enables profitable large-scale IoT applications where the device cost requirement is low, and the use case can be a simple sensor reading.
Mobile Operators and the IoT Challenge: Despite the mismatch between cellular economics and IoT requirements, many mobile operators still compete against Capillary Wireless Networks. This not only risks their ARPU but also jeopardizes their reputation when they are unable to deliver adequate coverage and reliability for IoT applications at affordable prices.
Parallels with Wi-Fi Evolution: Drawing parallels to historical skepticism surrounding Wi-Fi, the current resistance of mobile operators to RF mesh networks echoes a familiar narrative. Much like Wi-Fi became a complementary solution instead of competing, offering better economics for the end user offloading data traffic from congested cellular networks, RF mesh networks might be the missing link in addressing IoT challenges of scale and economics for last mile connectivity operators should be open to consider. Yet, operators can keep their cellular business through the backhaul RF mesh requires and, most importantly, serve their customers with good connectivity and affordable ROI for IoT applications.
RF mesh Networks: Bridging Gaps in IoT Connectivity:
Extending Coverage:
RF mesh networks excel in extending coverage to areas where traditional cellular networks face limitations, mirroring the efficiency of capillaries in distributing essential nutrients.
Efficiency in Device Connectivity:
Like Wi-Fi's impact on data connectivity, RF mesh networks enhance the efficiency of connecting IoT devices. Their dense network of communication nodes and redundant routing options ensures a reliable connection. Operators can use their precious spectrum for better ARPU applications.
Serving the Customer: Customer satisfaction is paramount in all businesses. For mobile operators to thrive in the IoT landscape, seeking synergies between cellular and non-cellular approaches can be vital. This ensures customer retention and prevents compromises to their hard-earned brand reputation in the cellular business.
The Inevitable Shift: From Resistance to Recognition: As history repeats itself, mobile operators are on the brink of a paradigm shift in their perception of RF mesh networks. Rather than viewing them as competitors, operators may recognize these networks as invaluable allies enhancing the overall IoT landscape. This transition echoes the Wi-Fi evolution, where embracing modern technology enhances capabilities and reach.
Conclusion: In the unfolding narrative of wireless connectivity, Capillary Wireless Networks, represented by RF mesh technology, stand poised to reshape the IoT landscape. Mobile operators, initially skeptical, must recognize the parallels with the Wi-Fi evolution — embracing this technology does not diminish their role but enhances the capabilities and reach of IoT. The transition from resistance to recognition is not just a historical pattern but a testament to the adaptability and evolution defining the dynamic world of wireless communication. The future of IoT connectivity beckons and a paradigm shift is the key for mobile operators to unlock their full potential. And to redeem the promise of offering sustainable IoT networks in smart metering, smart buildings, and high-density smart tracking.
