UK regulator Ofcom has opened the way for new entrants by offering between seven and 12 low-power licenses that would be suitable for wireless communications in premises such as an office.
Although Ofcom says the licenses will be technology and application neutral, the expectation is that they will be overwhelmingly used to offer GSM services so that once employees enter their workplace, the network picks up their mobile phone and it becomes an office extension.
Then calls made over the office GSM are routed through a landline at landline prices and once an employee leaves their premises their wireless carrier again connects to the phone.
The system has considerable advantages over WiFi in that, because GSM is optimized for voice, the quality of calls is better and no change to existing GSM phones is required.
Technology has already been developed by companies such as ip.access, a subsidiary of TTP Communications, that offers nanoGSM picocell units that connect with a company’s private branch exchange (PBX). One of the many fascinating aspects of the likely spread on small cells is that it is new companies like ip.access rather than the usual suspects in the base station market that are poised to make an impact.
This is because of the formidable problems in scaling down the traditional base station to a low-powered unit. ip.access, coming out of a company that has developed handset IP, has evolved handset technology to become a base station. It does not even need a separate power supply as it uses power over Ethernet.
Most companies are keeping their cards close to their chest on whether they have ambitions to take one of the new licenses. In part, this is due to the secret nature of the auction process. There was an angry reaction to the original suggestion that five licenses would be offered since this guaranteed they would be snapped up by the existing mobile operations and incumbent BT Group, organizations with an interest in preserving the status quo.
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As it is currently structured, the auction is bound to usher in new players. With seven to 12 licenses on offer, each bidder has to say how much they would be prepared to pay at each number of possible licensees. Obviously, the amount bid by each candidate will fall the higher the number but there will be less license fees to collect. It is the option that yields the highest return that will win the day.
An obvious problem is that as each person moves into their work GSM cell, they leave that of their wireless carrier. This would be a massive disadvantage to the scheme since users would not want to be cut off from what might be vital calls to their usual mobile numbers. ip.access insists the problem is solvable, although an official declined to go into details. Certainly, the company has sold its picocell technology to companies in Sweden and Switzerland who are using it as mini MNOs.
None of the major players are prepared to say whether they will be bidding for the new licenses. Vodafone Group will only say that it looks at every opportunity to buy more spectrum on its merits.
Nor will The Cloud, a major European provider of WiFi hotspots in Europe, say whether it is will add GSM hotspots to its facilities. It does however have considerable real estate through its hotspot activities and could see advantages, for example in hotels, allowing tourists to make calls to home at landline prices using their existing cell phones.
The notion of low-powered wireless base stations offering access to wired networks is one that will grow in influence. For example, with VoIP, UMA or VoWiFi threatening wireless carriers revenues, Bath, UK-based start-up Picochip has just announced a reference design for an ultra-low cost 3G/HSDPA base station for use in a home or small office.
The whole situation is attracting enormous interest because of the possibility, pretty soon, that the same mobile phone would become an office extension at work, make VoIP calls through the broadband link at home, and still operate as a mobile phone in a new world of fixed/mobile convergence.
