The wireless industry has made it clear over the last year or so that 4G technology is a short-term necessity in mature markets, and the long-term answer to broadband connectivity worldwide.
In mature markets, consumers are beginning to find ubiquitous access to medium or higher-rate broadband a necessary part of their communications capabilities. In developing markets, wireless will continue to be the only affordable way to deliver broadband and governments will foster those services to promote economic growth.
Thus, it is clear that the experience with voice services over the last two decades - in which it overtook and caused the decline of wireline - will repeat itself with broadband. That is, wireless will become the dominant method to deliver broadband services to users. This process may take awhile, but it will happen.
We find ourselves on the verge of another upgrade of wireless technology, and the potential is tremendous. However, we are in the midst of "interesting times" that are causing fundamental changes throughout the entire wireless industry. The global recession, new technologies and devices, open networks, an explosion of data usage, commoditization and the new competition that it brings - all of these things have made and will continue to make serious waves in the industry. As a result, the Top Five infrastructure list has been in flux for the past few years and we expect to see continued change.
In terms of RAN infrastructure, the biggest issue service providers are dealing with today is how to deal with the explosion of data usage in the face of modestly increasing revenues. Carriers expect to see a 10,000% increase in per-capita data usage over a five-year period. At the same time, many of their revenue-generating services such as ring-tones and SMS are at risk as smartphones proliferate, so carriers are scrambling to determine how to remain profitable in this new environment.
First, networks will be bigger. Improvements in technology and additional spectrum are not sufficient to provide the additional capacity that will be required in the next five years; carriers will need to install an order of magnitude more base stations in their networks. The bulk of these base stations will be managed picocells, a significant portion of which will need to be installed in non-traditional locations, which we expect to drive innovation in high-efficiency compact base stations and backhaul.
The issue facing service providers is that this increasing bandwidth demand does not arrive with a corresponding increase in revenues. Carriers need to deploy and manage these base stations at significantly lower costs per site. Recognizing this need, vendors are actively promoting self-organizing network (SON) solutions to enable a plug-and-play experience with base stations. SON is still mostly a concept, however, and still far from a solution to these issues.