Uncommon Wisdom

Dec 22 2009   11:11PM GMT

4G’s impact on metro networking: Focus on simplicity to win

Tom Nolle Tom Nolle Profile: Tom Nolle

One of the biggest questions about any market is whether it should be viewed from the supply or demand side. Supply-side markets are those where the product/service is in demand and where the demand is essentially controlled and manipulated by changes in the supply. Voice telephony has been such a market for most of our modern history; you don’t sell phones, you let people order them.

Demand-side markets are ones where there must be a value proposition created for a buyer before there is an opportunity to fulfill the demand. We’re of the view that LTE/4G fits into the latter category if we presume that a “market” is a place where a reasonable profit can be had.

A broad assertion in networking is that 4G will demand all kinds of new capacity. Not true. 4G permits lots of new capacity at the wireless level, but it will become a demand only if there’s some monetization associated with fulfillment. A 4G cell doesn’t demand 100 times the connection capacity, and if it did, nobody would deploy it because there would be virtually no chance that there would be sufficient ROI.

We do believe that broadband wireless will change the nature of metro networking but more by creating a different pattern of aggregation than because of the “demands” for bandwidth. 4G is the first non-TDM technology for wireless, and it multiplies the number of metro on-ramps for broadband users by an order of magnitude compared to wireline, where the onramps are purely central offices.

Stop thinking about the bandwidth of networks, everyone! Bits are cheap. Think about complexity, because that’s what costs. Simplify the wireless network’s connectivity to the metro network and don’t worry about speed, and you win.

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