In the wifi hotspot game first mover advantage is becoming critically important. Experience shows that landlords everywhere are initially happy to allow a network provider into their mall/stadium/building. Once in however they decide they don’t want the hassle of doing it again or don’t really like the infrastructure they are now stuck with but have to keep.
As a result there is a market for the first movers in reselling capacity or subletting space on their infrastructure. We are therefore seeing a land grab in places around the world where operators are snapping up as many sites as they can.
In London The Cloud is looking at 1 hotspot per 200 persons. Time Warner is putting 15,000 wifi access points in Los Angeles and PCCW have 10,000 hotspots in Hongkong where peak time traffic has 50% going over wifi instead of mobile networks. For PCCW in Hong Kong their resold wholesale wifi capacity is their single biggest revenue stream1.
O2 is rolling out massive coverage in central London in advance of the Olympics. The operator is rumoured to be paying $1,000 a month per lamppost. This rumour obviously came from an American source and I don’t believe it at that price but I would be interested if anyone knows how much it is really costing. Notwithstanding the cost O2 is clearly after the sites – many of which should be upgradeable to LTE at some point. This is a strategically important move for O2.
You might ask yourself how reliable a hotspot on a lamppost might be considering its accessibility to vandalism and to being driven into by reversing refuse collecting lorries (etc). It’s a valid question but actually one of the beauties of a small cell site deployment is that these don’t have to be as reliable as the Macrocell which is expected to have 5x9s uptime. Because there are many more of them the overall system can afford to have some “go down” from time to time as fewer people are affected and only for the short time spent transitioning through that hotspot footprint.
In fact in order to meet a price point that will trigger mass deployment the small cell is likely to be inherently less reliable than the Macrocell.
As well as needing to meet low cost targets the lamppost based small cell does have other hurdles to overcome. Planning permission is still needed with requirements differing from city to city. Funnily enough, though obvious when you think of it, there are also many designs of lampposts introduced over many years. Local Authorities may have no idea where their own lampposts are and in fact there may be nobody left at an L A that even has a handle on the design. Some lampposts go back 30, 40 or even 50 years. In Germany many areas have central switches controlling their lampposts. Sounds like a sensible thing to do unless you want to use the same electricity supply to power your small cell. It’s no good having a communications service that only comes on at night when the lights are switched on.
The lamppost is therefore unlikely to meet the plug and play criteria of the small cell nirvana but I’m sure this wont stop the land grab.
One final note re sharing of lampposts. Operators are unlikely to want to share spectrum – this is a strategically critical resource. They are already however sharing Macrocell sites and masts and have been most cooperative in sharing small sites in London in the rollout of Olympic infrastructure. If for example, 3, 4 or 5 operators want to use the same lamppost in say Leicester Square it doesn’t make economical sense to have multiple infrastructure setups. In this case they might share at least the backhaul connection and I guess the first mover advantage could well apply in respect of the relative cost benefits.
That’s all folks…
1 Picked all this up at the Small Cell deployment strategy for LTE workshop in Dresden last week.