Several wireless network equipment vendors have been demonstrating such products this week in Barcelona, Spain at the Mobile World Congress, the world's largest cell phone trade show.
The new technology can't arrive soon enough for the carriers. A deluge of demand from smartphones and the nascent tablet PC market in the next few years threatens to overwhelm current wireless networks, even with the ongoing deployment of the next-generation network LTE, or Long Term Evolution. Carriers will need to handle 26 times the volume of data traffic in 2015 as they did in 2010, according to Cisco Systems Inc.'s (NASDAQ: CSCO) latest Visual Networking Index Forecast.
The concept of using "small cells" to access wireless networks isn't totally novel. Carriers in the past couple of years have turned to microcells (also known as picocells), small base stations with limited range, to add capacity in high-use areas like as airports. Such cells are typically an extension of an existing cell network, however.
Yet another variation, femtocells, let homes and small businesses use an existing Wi-Fi network to extend and improve cellular service indoors, particularly where the cell signal otherwise would be too weak.
But lightRadio takes the idea of microcells several steps further, essentially basing the entire network on large numbers of small cells.
This more advanced approach yields several very desirable customer benefits. For one thing, with the help of some additional "vertical beam" technology, Alcatel says the lightRadio devices could increase urban and suburban area call capacity by 30%.
Not only can more users connect, but those with data plans should get a significant speed boost when accessing the Internet. In fact, a user should be able to connect to several nearby lightRadio cubes for a multiplier effect in speed, because of how the cubes are connected.
Instead of having the processing infrastructure attached directly to the cubes, as is the case with current cell towers, the devices in a given area will instead be connected via fiber optic cable to one central data processing unit. The effect is something like BitTorrent, with the user able to combine the bandwidth of multiple simultaneous connections.
The lightRadio technology promises further plums for the wireless carriers.
The cubes, being smaller than the towers, consume about half the power according to Alcatel. Also, lightRadio can use renewable energy, such as wind or solar power, if available. The result, Alcatel says, could cut the carriers' total cost of ownership by half.
Another major advantage of lightRadio: the wideband antenna can handle multiple wireless network standards, including 2G, 3G and LTE. Adding a new technology or switching between them can be done easily with a software upgrade. Similar changes to cell towers require adding new hardware on-site.
"If it is what they claim, lightRadio could be a highly disruptive force within the wireless industry," Dan Hays, a consultant at PRTM who specializes in telecommunications, told the Associated Press.
Alcatel says it expects to start lightRadio trials with "five of the largest carriers on the globe" in the second half of 2011, and general availability next year. Just this week the company announced a partnership with China Mobile (NYSE: CHL) to build a next-generation network.
Growth in its wireless business could help Alcatel accelerate its turnaround, which appeared to start in the fourth quarter of 2010. The company beat expectations with a profit of $461 million (340 million euros), up from $62 million (46 million euros) a year earlier, and attributed much of the improvement to revenue from its North American wireless business.
Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) was also showing off promising new networking architecture in Barcelona this week. Called Antenna Integrated Radio (AIR), Ericsson's solution is similar to Alcatel's in that it incorporates the small cell concept by combining the radio and antenna elements into a single, milk-carton sized unit. Ericsson says AIR could deliver energy savings of as much as 42%.
AIR also can talk to multiple network standards, but switching to another technology requires swapping out the antenna, a bit more difficult than lightRadio's software update. And because the AIR system keeps the cells next to the base processing unit rather than centralizing it in remote locations, it doesn't benefit from multiple connections.
But Ericsson has one big advantage in that AIR can be deployed at existing cell sites, whereas lightRadio requires all-new infrastructure. And AIR will be available sooner, in the latter part of this year.
Ericsson said it also sees increasing demand from wireless mobile devices boosting its business.
"We expect the strong uptake for mobile broadband to continue in 2011, with the number of mobile broadband subscriptions expected to double and hit one billion already this year," Ericsson CEO Hans Vestberg said during the fourth-quarter earnings conference call in January.
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