We don’t often receive free stuff from the government, but last year we did. With CBRS, the U.S. FCC made available 150MHz of cellular spectrum – essentially, free. Comparatively, the 2015 AWS auction cost U.S. mobile operators nearly $45 billion for a third of as much spectrum. This begs the question: What will CBRS be used for?
The answer depends on who you ask. For mobile operators, CBRS offers a low cost capacity boost in dense urban areas, especially when paired with their existing licensed cellular spectrum. Using carrier aggregation, mobile operators get the best of both worlds: reliable quality and massive capacity. In contrast, cable operators use CBRS to add cellular where they already have a cable or Wi-Fi footprint, avoiding paying mobile operator MVNO fees.
The most interesting CBRS application is for in-building cellular coverage. Many people think that cellular coverage is ubiquitous across the land but the reality is that when you’re in hotel conference areas, high-rise buildings, dense urban jungles, among other places, you’ll have to move to a window to get the most basic function of your smartphone: reliable voice service. Unlike cellular spectrum, CBRS is not owned by mobile operators, opening the door to enterprises and a new wave of managed service providers (MSPs) to deploy in-building cellular coverage solutions at a fraction of the cost of today’s alternatives. CBRS small cells are naturally “neutral host”, meaning they support subscribers from all mobile operators, providing lower deployment costs and expanding the total market opportunity for MSPs.CBRS opens the market to smaller venues that experience similar coverage and capacity problems today, including hotels, resorts, colleges, universities, condominiums, other multi-dwelling units, and sports and entertainment venues. Based on U.S. Energy Information Administration surveys of U.S. commercial buildings, CBRS should expand the market for managed service providers from 7 billion square feet to over 30 billion!
So what’s the catch? Only new smartphones will have CBRS capability, so it will take time for the market to fully take advantage of this new spectrum. Fortunately, mobile and cable operators have an incentive to drive CBRS capability into new phones they sell. Major smartphone chip vendors already support the capability and handsets should be coming soon. Another caveat is that the CBRS rules are first-come/first-served, meaning that the first MSP that deploys in a given venue will gain a natural advantage over others that come later. This also means that MSPs should invest ahead of the CBRS smartphone capability in order to maximize their advantage when users finally materialize. CBRS will be a windfall for MSPs, but they have to move fast and “land-grab” locations today to reap the benefits in the future.