Cellular Networks

Alcatel-Lucent's Tiny Cell Tower


Almost everything electronic—modems, PCs, cellphones—becomes dramatically smaller and more powerful each year. Not cell towers. They're still big, ugly, and expensive. Most were designed with the simple goal of transmitting plain old phone calls, so towers are easily overwhelmed by smartphone users who now want to not only call grandma but also upload photos and stream TV shows. The current solution to network congestion is "building bigger and bigger cell towers in more places," says the president of Alcatel-Lucent's wireless division, Wim Sweldens. That's cost-prohibitive in vast rural expanses and pretty much impossible in dense urban areas. "It's no longer sustainable," he says.

On Feb. 7, Alcatel-Lucent (ALU) introduced a Rubik's cube-sized device called lightRadio that could help bring an end to the bigger-is-better approach. Most of today's cell towers are 200-foot monsters topped with an unsightly gangle of antennae. Each lightRadio unit measures 2.5 inches across and weighs just 10.5 oz. That compact package contains radios and antennae for each of the major cellular technologies—2G, 3G, and LTE. Carriers can plop them wherever they need more coverage, so long as an electrical source is available—on telephone poles, building rooftops, and bus stop shelters. "This will dramatically change the way mobile networks are built," says Sweldens.

Smartphone users won't be able to download Top Chef via these modules just yet. While carriers say they are very interested in the technology, none have committed to testing it yet, let alone buying it. And while the first versions of the lightRadio devices could help quickly plug holes in coverage, they'll still need to be wired to a cellular base station, the cabinet-sized rack of gear usually housed in a basement or shed at the bottom of a cell tower. (Base stations convert mobile, analog signals into digital ones and send them across a carrier's underground broadband cables.) By 2014, Alcatel-Lucent hopes to integrate all of the bulky base-station technology into lightRadio units as well.

Carriers are scrambling to cope with a steep rise in mobile traffic, which is increasing by 26 percent a year, according to Cisco Systems (CSCO), the world's largest networking gear supplier. The economics of the Internet make keeping up difficult. Though consumers are downloading more movies and apps on their phones, wireless carriers don't generally make extra revenue from these "data hogs," as some call them. "The economics are getting worse," says Sweldens. LightRadio devices, he claims, could lower the cost of new cellular investments by as much as 50 percent. One big expense that lightRadio minimizes: the price of winning approval from the not-in-my-backyard types who fight proposed cell towers. "Site acquisition is the Achilles' heel of every wireless carrier," says Jeffrey M. Thompson, chief executive officer of Towerstream, which offers high-speed cellular service in 11 U.S. cities, including New York. He says it often takes a year to win approval to build a new tower.

Carriers have lately been trying to alleviate network strain by keeping people from using the cell network at all. For several years they've offered consumers the option to buy "femtocells," small gadgets for the home that intercept a mobile user's phone calls and data requests and send them over cable and DSL lines instead of airwaves. It's a tough sell: Carriers are essentially asking customers to pay for a device whose only function is to make their cell service tolerable. (In some cases they give femtocells to subscribers for free.) About a million people have taken them up on the offer, according to Dell'Oro Group, a market research firm.

LightRadio is the first major attempt to rethink the cell tower itself, says Michael Howard, co-founder of research firm Infonetics Research. Asked if any other networking company is working on something like lightRadio, Howard says "If they weren't, they are now."

The bottom line: Alcatel-Lucent hopes its compact lightRadio module will change the economics of upgrading congested cellular networks.

Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.

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