A New Model for In-Building Wireless Service
- Jun 22, 2017
Most office workers complain about spotty cellular service, and that’s a big problem because 80 percent of mobile connections originate inside buildings. Wireless coverage has become the “fourth utility” in buildings, along with water, power, and wireline voice/data service. Necessity is driving demand for constant coverage. Many employees use their cellular devices as their primary means of communication, and they use their personal devices at work. To ensure coverage in this day of “bring your own device,” a building must support service from the major wireless carriers.
This presents a challenge, because mobile subscribers typically blame their company or the building owner rather than their wireless operator. In a recent survey of 1000 office workers conducted by our company, 74 percent polled reported that they frequently or sometimes had problems with poor cellular coverage in the workplace, which can lead to frustration and lost productivity.
It’s up to enterprises or building owners to deal with this problem, but most of them lack the technical expertise or budget to implement an in-building wireless system. What’s needed is a new business model that addresses the technology and cost issues to provide a simple solution.
Mobile operator spending on commercial in-building cellular systems is very selective, so addressing the issue is usually up to the owner or the occupant. Those stakeholders face two key barriers to solving this problem: they are in the early stages of learning about in-building wireless technology, and they are looking at ways to budget for the capital outlays needed to deploy in-building connectivity solutions.
Owners and property managers may want to tackle the wireless challenge, but they are daunted by the range of available choices. Vendors offer distributed antenna systems (DAS), small cells, and Wi-Fi options for mobile service indoors. Moreover, the industry itself is transitioning from 4G LTE to 4.5G (Gigabit LTE) and 5G with technologies such as License Approved Access (LAA), LTE-Unlicensed (LTE-U), Citizens Band Radio Service (CBRS), and MulteFire. Given the range of options and uncertainty about technology’s future direction, many facilities opt to do nothing, which is not a solution.
The other issue is financial. In most cases, owners haven’t allocated the capital necessary to purchase an in-building wireless system, and they are concerned that they will invest heavily for a solution to today’s challenges, only to find that additional large outlays may be required down the road. Facility owners are concerned about making significant up-front expenditures on solutions that may have limited shelf life and require repeated costly upgrades. And they don’t want to pay a high entry-level price for a system that could be over-engineered to accommodate possible downstream changes.
Pay As You Grow
What’s needed is a business model that shifts spending from capital expenditures to operating expenditures, thus enabling a lower cost of entry and the ability to pay as you grow. This Cellular-as-a-Service (CaaS) model works through a monthly charge for the wireless system, and removes concerns regarding high upfront costs as well as recurring downstream costs incurred by system changes and additions.
In the CaaS model, the solution can be engineered to meet today’s needs (and possibly any identified near-term future needs), and offered on a monthly, per-square-foot cost basis. Like offerings such as Software as a Service (SaaS), CaaS would be offered on a contract basis over a set number of years, and it would include deployment as well as on-going system monitoring and maintenance, thus taking the learning curve burden off the facility’s IT team. Any new frequency or operator additions on the system or additional coverage areas might cause a slightly increased monthly charge, but it would not involve any capital outlays, as they would be covered as part of the service.
The CaaS model moves the budget allocation to an op-ex model where it fits more easily into a building’s operating budget. It also allows the system to be optimized for near-term needs, thereby keeping first-in costs low while downstream system growth is accommodated.
The CaaS approach is all about streamlining. It simplifies decision-making because it removes the risks of large capital outlays and investing in a solution which could undergo technology changes in a few years. It also eliminates the headache of navigating complex technology choices and possible trade-offs as well as downstream support requirements.
Making It Work
Making the CaaS model work requires the right in-building wireless solution. If the in-building wireless system doesn’t meet the service requirements or is too expensive or complex to deploy, the business model won’t be cost-effective. A solution with fewer components and streamlined architecture is needed to make the system easier to install, maintain and upgrade. To further reduce deployment costs, the solution should use existing building fiber cabling and be able to handle a wide range of radio frequencies and wireless operators to solve for today’s requirements and tomorrow’s changes.
If we accept the premise that in-building wireless service is a necessity, then it becomes easier to see the acquisition of such a service as a utility problem, not a capital outlay problem. CaaS allows buildings to solve the problem with a business model that works for them as well as for the wireless system provider.
John Spindler joined Zinwave as vice president of marketing and product management in November 2015 and has over 30 years of product management and marketing experience in the wireless and telecommunications industries.