CBRS Opens New Managed Services Opportunity

CBRS Opens New Managed Services Opportunity
CBRS Opens New Managed Services Opportunity
Ruckus Wireless White Paper:
CBRS Opens New Managed Services Opportunity
February 2017
Kyung Mun
© 2017 Mobile Experts LLC. All Rights Reserved.
1
CBRS Opens New Managed Services Opportunity
CBRS Overview
To make more spectrum available for wireless broadband use, the US Government (FCC)
adopted dynamic spectrum sharing of the 3550-3700 MHz (“3.5GHz”) band for commercial use.
Formally known as Citizen Broadband Radio Service (CBRS), the 3.5GHz shared spectrum use is
authorized into three tiers. The tier 1 “incumbents,” including ship-borne Navy radars, fixed
satellite stations, and wireless ISPs,
3550
3600
3650
3700
are protected from lower tier users
at all times.1 CBRS rules govern
US Military Radars (on-ground, ship-borne)
commercial tier 2 Priority Access
Tier 1
Fixed Satellite Stations
License (PAL) and tier 3 General
Authorized Access (GAA) users.
Wireless ISPs
Under the plan, up to 150MHz of
spectrum are made available for
Tier 2
Priority Access License (PAL)
commercial use on a shared basis
Tier 3
General Authorized Access (GAA)
with incumbent users, primarily
military radars and fixed satellite
Figure 1. CBRS Three-Tier Shared Spectrum Licensing
Figure 1. CBRS Three-Tier Shared Spectrum Licensing Structure
stations. Each PAL license covers a
10MHz channel per census tract for a
three-year term, and up to seven PALs can be assigned in a census tract. GAA users are
permitted to use any portion of the 3.5GHz band not assigned to higher tier users. Until a
competitive PAL auction takes place, up to 150MHz of the band is open for GAA “unlicensed” use
dependent on tier 1 incumbent use.
The key dynamic spectrum channel assignment is handled by a Spectrum Access System (SAS)
which maintains a database of all CBRS base stations, formally referred to as Citizen Band Service
Devices (CBSDs). It works with environmental sensors known as Environmental Sensing Capability
(ESC), mostly along coastal regions, to detect Navy radar activity. When radar use is detected,
the ESC alerts the SAS, which then directs CBSDs to “move” over to other open channels. SAS
enforces the three-tier licensing structure and dynamic channel assignments via centralized
coordination.
New Opportunities with CBRS
CBRS enables LTE-based solutions for both in-building wireless and outdoor coverage and
capacity expansion. The 150MHz of CBRS shared spectrum, at low spectrum cost, opens a wide
1
Wireless ISPs currently operating in the 3650-3700 MHz spectrum band will be required to operate under the Tier
2 or 3 access after an initial five-year ‘grace’ period.
© 2017 Mobile Experts LLC. All Rights Reserved.
2
CBRS Opens New Managed Services Opportunity
variety of market opportunities for both traditional mobile operators and non-traditional players.
Key initial use cases are expected to be:
1. Network operator capacity expansion and traffic offload
2. In-building mobile coverage and capacity expansion
Rising traffic demand and increasing competitive intensity (highlighted by heavy promotions of
“unlimited” data plans) are forcing mobile operators to look for low-cost capacity solutions.
Leveraging unlicensed and shared spectrum through carrier aggregation lowers their unit costs
while increasing throughput gain. CBRS offers an economical path for the mobile operators to
achieve this objective. Similarly, cable operators seeking to enter the wireless industry via an
MVNO strategy can deploy LTE network on the CBRS band to improve the business case. Since
the profitability of a MVNO business model is heavily dependent on network expenses
associated with traffic going over to the host mobile operator network, traffic offloading to an
MVNO-owned CBRS LTE network can significantly improve MVNO economics.
Beyond the immediate market
opportunities for traditional
network operators, the novel
spectrum sharing approach of
SAS
CBRS opens up new market
opportunities for neutral host
providers or large enterprises to
SAS Neutral Host
Enterprise “Private” LTE
Network
address the pent-up demand for
In-Building Wireless
(Service Provider)
in-building wireless market
especially in mid-sized
enterprises and venues. There is
MNO 1
a growing need for neutral host
MNO 3
providers to bridge the gap
MNO 2
between very large projects
with direct mobile operator
Figure 2. Neutral Host Network Provider / Large Enterprise
involvements and large numbers
LTE Network using CBRS
of smaller projects that are too
small for mobile operators to consider, but too complex for enterprises to handle on their own.
This problem is especially acute for CBRS that requires SAS coordination and managing core
network integration with mobile operators for seamless LTE services in and out of buildings.
Beyond the obvious large public venues such as stadiums and airports, high-rise office buildings,
hospitality venues, hospitals, and university campuses are examples of vertical segments where a
neutral host provider can effectively provide a mobile wireless “as-a-service” offering. It is also
feasible for a large enterprise with IT/telecom resources to build out an LTE-based network in the
CBRS band to provide “private” LTE services for enterprise applications.
© 2017 Mobile Experts LLC. All Rights Reserved.
3
CBRS Opens New Managed Services Opportunity
Advantages of CBRS for In-Building Wireless
LTE-based solutions in the CBRS band afford special advantages for in-building wireless market,
including:



Inexpensive “clean” spectrum in the favorable 3.5GHz mid-band;
Robust ecosystem of handset and operator support; and
Lower unit cost than other multi-operator mobile coverage solutions
The 150MHz of nearly idle spectrum in the CBRS band offers a tremendous new spectrum
resource that can be allocated for indoor mobile networks.2 For mobile operators, dedicating
the CBRS spectrum band for indoor networks frees up valuable licensed spectrum which would
otherwise have to be allocated for the indoor use. More importantly, dedicating a separate
“neutral” spectrum for indoor networks eliminates possible co-channel interferences between
macro and indoor networks. This in turn simplifies RF engineering and enables third-party
neutral host providers or large enterprises to build out indoor LTE networks without close
coordination with mobile operators. The novel tiered approach of shared spectrum also
encourages success-based investment by variety of stakeholders, not just the traditional mobile
operators. With GAA open access, no spectrum ownership is required. This in turn enables
enterprise-led indoor LTE network deployments without close coordination with mobile
operators which has been a key impediment in wide spread adoption of DAS deployments
especially in mid-sized enterprises and venues.
With all four tier 1 operators voicing support of CBRS, CBRS LTE small cells have become a
realistic multi-operator mobile coverage solution. This is a major step because this kind of
product fills the void in the marketplace between Wi-Fi and DAS. While Wi-Fi is considered
inexpensive, it lacks in seamless mobile voice services. On the other hand, the multi-operator
DAS solution is considered too expensive for many enterprises, not to mention the difficulty of
securing a signal source from the operators. CBRS small cells with inherent multi-operator
support and simplicity of Wi-Fi like installation can provide a cost-effective mobile coverage
solution for third-party neutral host providers and large enterprises. Mobile operators’ selfinterest to leverage the CBRS band for their own capacity expansion is likely to hasten the
enterprise adoption of CBRS as enterprises see broad availability of CBRS-capable handsets
coming to the marketplace.
2
A major US mobile operator, on average, holds about 130MHz of licensed spectrum.
© 2017 Mobile Experts LLC. All Rights Reserved.
4
CBRS Opens New Managed Services Opportunity
$/sq.ft.
CBRS small cells offer a lower-cost alternative for indoor mobile coverage. Our analysis shows
that a CBRS small cell can offer lower “cost per square foot” unit economics against other
alternatives, including DAS and
traditional small cell deployments. A
Cost per Square Foot
(200K sq.ft. building, 4 MNO support, 5-Year TCO)
key factor driving this lower unit cost
is the fact that a single CBRS small
$2.40
cell can support all four major
Lower cost with small
cell as signal source
operators in the “neutral” 3.5GHz
$1.61
band. In comparison, multiple
operator-specific small cells are
$0.76
required in a traditional small cell
$0.53
deployment. Although DAS cost can
be brought down with less expensive
small cell as a signal source for
Wi-Fi
DAS
MNO Small Cells CBRS Small Cells
smaller venues, CBRS still offers a
Figure 3. Comparative In-building Wireless Economics
lower-cost alternative for mobile LTE
coverage. It should be noted that
while Wi-Fi offers a lower cost solution for in-building wireless coverage, it has been a poor
substitute for seamless mobile voice services indoors. In contrast, CBRS promises seamless
voice services over higher-performance LTE links.
In-Building Wireless Market Opportunity
The scale of in-building enterprise market is immense. There are over 5.5 million commercial
buildings in the U.S. of varying sizes, representing over 88 billion square feet of floor space. At
the high end (i.e., buildings with
US Commercial Buildings
over 500K square feet of floor
space), there are about 8,000
buildings representing over 7 billion
square feet of total floor space.
Meanwhile, over 5.2 million of these
commercial buildings are less than
50K square feet in size. Assuming
smaller venues less than 50K square
feet can be addressed through lowcost options like repeaters or Wi-Fi
access points, the market
opportunity for more robust inbuilding mobile coverage and
capacity solutions is over 44 billion
square feet of floor space.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
8
38
7,053
90
10,718
Building floorspace
(square feet)
Over 500K
200K to 500K
12,425
100K to 200K
199
50K to 100K
13,914
No. of buildings
(thousand)
Total
floorspace
(million sq ft)
Source: US Energy Info Admin
Figure 4. US Commercial In-Building Wireless Opportunity
© 2017 Mobile Experts LLC. All Rights Reserved.
5
CBRS Opens New Managed Services Opportunity
Assuming 70% of these venues have poor “outside-in” coverage,3 that yields about 30 billion
square feet of floor space across over 300,000 buildings. Estimating the market demand at $1
per square foot for equipment and installation, the market opportunity for in-building mobile
coverage in the U.S. stands at around $30 billion.
Managed Services - Technical and Commercial Aspects
Service continuity
between MNO and NHN
Managed services through a neutral host network (NHN) provider requires integration of core
networks between the NHN and multiple mobile network operators (MNOs) as shown in Figure
5. The interworking between NHN
CBRS LTE
and multiple MNOs leverages the
SAS
small cells
Local IP
WLAN internetworking
architecture as defined in 3GPP. A (enterprise PBX)
mobile device can use ePDG to
EPC
gain access to mobile operator IP
NHN
MNO 1
MNO 2
Gateway
Gateway
services, including voice services
KPI/alarms
over IMS. The service continuity is
SIM auth. w/
MNO AAA
IP network
maintained between NHN and
MNO network, and local IP
IMS
services (e.g., enterprise PBX) can
MNO 2
EPC
AAA
be provided through local
Core
breakout at the neutral host
MNO 1
Core
network. Another key aspect of
the NHN core network is to
MNO 2
MNO 1
provide KPI or charging metrics to
MNO core network through so-called
Figure 5. Neutral Host Network (NHN) Architecture
MNO gateway. Since the NHN in this
case needs to meet the CBRS governing rules, the NHN core also needs to interface with SAS for
dynamic channel assignments as necessary.
A managed service offering from a NHN provider is a great match for CBRS radios. Because the
CBRS radios operate in the neutral 3.5GHz spectrum, there is no need for close coordination with
mobile operators in RF design. The CBRS radio deployment can be led by NHN providers or
enterprises themselves. CBRS essentially allows NHN providers to independently deploy indoor
LTE networks and support neutral hosting of multi-operator services. Effectively this is similar to
NHN or enterprises deploying Wi-Fi networks to support multi-operator device usage (since Wi-Fi
is ubiquitously supported on most user devices today).
3
Ericsson Consumer Lab Survey finds that only three in 10 smartphone users find indoor coverage to be good.
© 2017 Mobile Experts LLC. All Rights Reserved.
6
CBRS Opens New Managed Services Opportunity
Figure 6. Commercial Model for CBRS Neutral Host Networks
As listed above, an NHN provider takes ownership of various tasks required to operate a mobile
wireless network and offer managed services to enterprises as an OPEX item (e.g., “$ per radio”
or “$ per GB”). While a neutral host provider can take on full ownership of capital investments
in core networking and RAN, in addition to on-going network management and operations, it is
possible for enterprises to take on the radio network investment and/or installation, since CBRS
LTE small cell deployment is expected to be similar to Wi-Fi.
Neutral host managed services provide benefits to all key stakeholders involved.



Enterprises can offload the complexity of building and managing LTE-based mobile
network services, including complex internetworking with MNO core networks for
seamless services in and out of buildings. In addition, the OPEX model associated with
managed services provides a known expense outlook, without the uncertainty of
building and operating a network.
For mobile operators, dealing with a fewer number of NHN providers and their networks
is more efficient than working with lots of smaller enterprises, many of whom do not
have telecom experience. Enabling LTE network coverage indoors can benefit mobile
operators’ subscriber experience.
Finally, for the neutral host providers, indoor network deployments can be
independently led by themselves or enterprises, and removes the huge barrier of
working closely with mobile operators in traditional small cell or DAS projects. This
© 2017 Mobile Experts LLC. All Rights Reserved.
7
CBRS Opens New Managed Services Opportunity
freedom to deploy without coordination with mobile operators provide business agility
to quickly deploy and activate LTE services. CBRS small cells, operating in the neutral
spectrum, are naturally well-suited for neutral host indoor mobile solution.
For the in-building enterprise market, the “clip-on” CBRS
LTE radio modules (as shown in Figure 7), for example, can
provide added benefits of leveraging existing Wi-Fi
infrastructure. The “clip-on” modules can be selectively
plugged into installed base of Wi-Fi access points to take
advantage of existing cabling, power and backhaul
connectivity. Since CBRS LTE radios operating in the
3.5GHz band can propagate farther than typical 802.11ac
access points operating in the 5GHz band, the CBRS LTE
modules do not need to be plugged into every Wi-Fi access
points in a venue to create a similar indoor coverage.
Innovations such as “clip-on” modules can further lower
the total investment required to enable cost-effective LTE
mobile coverage indoors.
“Clip-on”
Source: Ruckus Wireless
Figure 7. CBRS LTE 'clip-on' to Wi-Fi AP
Opportunity for Neutral Host Providers and Large Enterprises
Demand for in-building mobile coverage, and increasingly capacity, is rising every day as mobile
device usage for voice communication and enterprise applications grows at work places and
public venues. Beyond giant venues like stadiums, the mainstream in-building enterprise market
is largely underserved. Higher installation costs and mobile operator cooperation in securing a
signal source for DAS have been key impediments in addressing the wider enterprise market in
commercial buildings. Although lower-cost Wi-Fi has been widely deployed to address this need,
it does not provide consistent quality that’s associated and expected with cellular voice services.
The pent-up demand in the enterprise market is growing for a better solution.
CBRS offers a tremendous opportunity to address this market need for a cost-effective inbuilding mobile solution. Because they operate in neutral spectrum, CBRS LTE networks
inherently support multiple operators. In comparison, traditional small cell solutions require
separate deployments for each mobile operator – making such solution cost prohibitive. Unlike
DAS solutions that require a dedicated signal source from each operator, CBRS small cells
implicitly includes a low-cost signal source. Hence, CBRS small cell deployment is much simpler; it
can be simple as deploying Wi-Fi access points.
While CBRS LTE radios can be easily deployed by enterprises without close coordination with
mobile operators, core network integration is necessary for seamless service continuity in and
© 2017 Mobile Experts LLC. All Rights Reserved.
8
CBRS Opens New Managed Services Opportunity
out of buildings. Here, neutral host providers can play a crucial role in “bridging” mobile
operator macro networks and enterprise indoor networks. The neutral host providers are
natural stakeholders to handle complex core network integration with mobile operators, along
with CBRS SAS management to enable seamless mobile services in and out of buildings. Many
mid-sized enterprises do not have dedicated telecom resources to build or manage complex LTE
networks. Neutral host providers, who can take on that challenge, are well positioned to
address the pent-up demand for in-building mobile services.
CBRS momentum is growing, and there is a growing optimism around new business
opportunities that can be enabled by LTE solutions in the CBRS band. With the FCC approval of
several key SAS providers recently, the road is clear for CBRS radio deployment indoors.
Moreover, the expanding CBRS ecosystem that now includes all major mobile operators bodes
well for the key device support that is necessary to “seed” the market for enterprise adoption.
Meanwhile, the chipset, handset and infrastructure developments are progressing well towards
product introduction in the second half of 2017. We expect strong growth and forecast about
500,000 CBRS radios to be shipped in 2020.
Enterprises have been seeking cost-effective in-building cellular solution for years, and CBRS
promises cost-effective LTE services with the simplicity of Wi-Fi. The key foundations of multioperator and handset support are now visible on the horizon. Neutral host providers who can
leverage the growing and maturing CBRS ecosystem, are well positioned to reap the rewards of
addressing the pent-up demand for in-building enterprise market.
© 2017 Mobile Experts LLC. All Rights Reserved.
9
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