Microsoft announced that it had acquired privately-held Affirmed Networks today. This isn't the first software/services based telecom acquisition it has made, with the 2011 acquisition of Skype being the most prominent one. Other competitors to Microsoft have made forays into the telecom market, including Facebook's 2014 purchase of WhatsApp, Oracle's 2013 acquisitions of Tekelec and Acme Packet.
Microsoft's acquisition can be viewed as both collaborative with mobile network operators or competitive with them, and it certain pits the giant against telecom equipment vendors like Ericsson, Nokia and Huawei. Let me explain.
Federated Wireless, a pioneer in the CBRS SAS market, just announced its plans for an AFC for the upcoming 6 GHz spectrum in the US market. The company expects that 6 GHz products and its AFC to be commercially available sometime in 2021, and potentially as early as late 2020. For those who are unfamiliar with what is behind this announcement, let us explain. Citizens Band Radio Service (CBRS) is a 150 Mhz wide broadcast band from 3.55 GHz to 3.7 Ghz in the US market, and Federated Wireless is one of main companies offering SAS, which enables multiple spectrum-users to share the 3.5 GHz spectrum. So, now that the US FCC is planning to open up the 6 GHz spectrum as unlicensed, allowing Wi-Fi 6E and 4G/5G cellular (or other systems) to operate, there’s an emerging need to coordinate what exact frequency bands in the 6 GHz range should be allowed on a per device basis; this service is called an AFC (automated frequency coordinator).
We think the timing for Federated Wireless’ AFC announcement is good. There is considerable excitement about Wi-Fi 6E (the version of Wi-Fi 6 that will operate in this new 6 GHz spectrum). Consider that two significant Wi-Fi infrastructure chip companies, Broadcom (on January 7, 2020), Qualcomm (February 25, 2020), announced products that operator in this 6 GHz spectrum.
There is some controversy as to whether the AFC service will be needed for some or all of the working device types, installation locations (indoor or outdoor) and device power output levels. There are two camps, which can be summarized as “what the Wi-Fi companies want,” and “what the incumbents want.” The Wi-Fi companies have repeatedly explained that requiring an AFC for very-low power or low-power 6 GHz use in the US will slow down the market (VK Jones, VP Technology of Qualcomm Atheros said so last August, 2019, for instance). However, Federated Wireless has studied multiple major cities in the US and found that there are some cases where, in populous areas, the new 6 GHz devices could interfere with incumbent services like microwave links of mobile operators, public safety, utilities and transportation. We understand the FCC is reviewing this information and may communicate with the public as soon as April 2020. We expect the various parties (Wi-Fi players, incumbents, FCC, AFC players) to make some concessions in the coming months.
Today, HPE Aruba announced its Aruba Air Pass cloud service that allows for a hand-off between cellular and Wi-Fi networks. The service is enabled by Passpoint, which is a standard created by the Wi-Fi Alliance. The idea is that a mobile operator customer can go into a building with Wi-Fi coverage and, without having to "log on" to the Wi-Fi, the user's phone will automatically connect. Using Air Pass means that mobile operators won't need to build a cellular infrastructure in these buildings for customers to continue with their phone calls.
For mobile customers to see the benefit of seamless roaming from the Air Pass service, mobile operators will need to engage in a relationship with the property owners of the building. While this seems like a lot of work, connecting to Air Pass will be far easier than it would be for a property owner to install a cellular network inside the building. Examples of in-building cellular that can operate either on licensed, shared or unlicensed spectrum is a Distributed Antenna Systems (DAS) system or licensed small cells. Building owners or operators have to build new, in-building cellular if they want cellular coverage. Managed Service Providers, such as Federated Wireless, have begun selling a service to property owners where they will manage the cellular infrastructure for the owner.
Aruba has some competition for its service to allow Wi-Fi sharing to mobile operator customers. In February 2020, Cisco announced its Unified Domain Center as a means of sharing Wi-Fi coverage with mobile operators, as well, and claimed that it is at the proof of concept stage with operators. Also, Swedish software and services company, Aptilo, has created systems that allow SIM-based device users to roam onto Wi-Fi, as well. We applaud the efforts of Aruba, Cisco, Aptilo and many others who have built systems to allow device users to roam between cellular and Wi-Fi networks.
There has been a lot of excitement by mobile operators and cellular equipment suppliers about the 5G opportunity to expand to enterprises. In November 2019, for instance, Nokia discussed how enterprises are adopting its Private LTE systems to allow cellular coverage at customers such as utilities and shipping ports. We have been cautious on the idea that mobile operators will get lots of new revenue from providing cellular coverage to the enterprise; a year ago, we laid out our thoughts on the 5G Enterprise hype at the MWC19 show.
The implications of the emergence of services like Air Pass and the capabilities of Unified Domain Center is that Enterprise Wi-Fi coverage will be leveraged in the 5G era far more than all the hype about "5G" wiping out the need for Wi-Fi. However, we also feel that cellular systems will see growing popularity in certain enterprise verticals, as was evident at the MWC-Americas 2019 show.