Is there a crash course on cellular markets?

November 6, 2009 3:40 PM

I've owned a cellphone for ages, and have largely remained ignorant of the business workings. Is there a crash course on cellular markets?

I'm curious how cellular companies work behind the scenes. Do they really build multiple competing "networks", or do they mostly build peering agreements? The latter seems technically possible, given "roaming" implies off network usage. Also of interest to me is whether there's a distinction made for data and voice outside of billing the customer.

posted by pwnguin to work & money (6 answers total)

The answer is complex, but basically boils down to: everybody is in everybody else's pockets.

Take aerial sites. Most aerial sites are shared by more than one, if not all competing cellular networks, this is simply because, if some company puts up a big aerial, it makes sense for them to sell space on it to lots of people.

Aerial sites are then connected to the main network via the "club" (the company that owns the local loop, say, BT in the UK, or AT+T in America), to a "carrier" (who puts down cables along railroad tracks and suchlike). The call is then switched via a carrier (who is generally cheaper than the local "club") to wherever the call is being placed, and then, reverse order - carrier, to club, to network, back to carrier, back to club, back to aerial.

All mobile networks have roaming agreements with other mobile networks not in the same country (and even in the same country too, where coverage is sparse for a particular (new startup) network, it will agree terms with an existing provider). All these roaming agreements mean, in terms of GSM, is that you can make calls on a foreign GSM network and the network of the owning mobile will be billed for use - the roaming call never passes through the home network at all, they just receive call files.

Yes, there's a significant difference to GPRS and GSM, because GSM is largely still circuit-switched. These types of calls are billed differently internally between networks - largely, it's the difference between billing-by-duration, and billing-by-byte.

Perhaps read the old wired article that in a roundabout fashion explains that the same cables that run the phones run the internet, and all the glorious machinations therein, and if you then want to get technical, read up on ss7 interconnects,
posted by BigCalm at 4:05 PM on November 6, 2009

It's really going to depend heavily on which market you're talking about. Every part of the world has a different situation. In the United States there are roughly four major nationwide competitors with two different technologies (full list at wikipedia.) AT&T Mobility (nee Cingular) and T-Mobile operate GSM networks and Verizon Wireless and Sprint Nextel operate CDMA networks. They both use a mixture of 850 MHz and 1900 MHz (aka PCS.) To quote wikipedia again:

The usage of frequencies within the United States is regulated by the Federal Communications Commission (FCC). The US is then divided geographically into a number of Trading Areas. A mobile operator (or other interested parties) must bid on each trading area individually. A bidder can use the frequency spectrum for whatever purpose he wants. Go to Wireless Advisor for a listing of the network operators for a given ZIP-code.

The Cellular band (869-894 MHz) is divided into 2 frequency blocks (A and B). There are 306 Metropolitan Service Areas and 428 rural service areas. Each trading area consists of one or more counties.

The PCS band (1850-1990 MHz) is divided into six frequency blocks (A through F). Each block is between 10 MHz and 30 MHz bandwidth. License (A or B) is granted for a Major Trading Areas (MTAs). License (C to F) is granted for a Basic Trading Areas (BTAs). There are 51 MTAs and 493 BTAs in the United States.

So, the service you have at any given point in the country will depend on the type of phone you have and which carrier has bid on that service area. There used to be more variables like the old AMPS analog service or the TDMA services, but I think they're all gone and dead now.

Most of the rest of the world uses GSM, but on different frequencies. That leads to the phenomenon of tri-band (850/1800/1900 or 900/1800/1900) or quad-band (850/900/1800/1900) GSM phones which are meant to be usable in both the Americas as well as Europe by switching SIM cards.

And as already mentioned voice is circuit-switched and data is packet-switched.
posted by Rhomboid at 6:04 PM on November 6, 2009

I'm probably more qualified than anyone to answer this question than anyone on this board. I've worked in the cellular industry for ten years moving from sales, marketing, operational, and moderately technical positions. The short answer is that it's complicated. I'll echo that each market is different.

In the U.S. the networks are primarily separate and competing however most networks also "compete" by offering their services to roaming partners and raking in the cash from their competitors in those markets. Behind the scenes data and voice traffic are drastically different to the point that it's hard to even conceptualize for someone without a deep understanding of both the technical and business aspects.

If you want to get into a deeper discussion on specifics you're welcome to MeFiMail me.
posted by Octoparrot at 8:26 PM on November 6, 2009

Actually, I'll rephrase. There may be people more qualified. I don't want to get into a pissing match or anything. Just trying to say I've been around the business a bit.
posted by Octoparrot at 8:33 PM on November 6, 2009

I would imagine (based on some of the responses here and my own knowledge) it works something like this:

There are different kinds of providers. In each geographic area, there are the providers who own the rights to the wireless bandwidth. They sell that directly to customers, but also sell it to other cell companies at a "wholesale" rate.

Then there are the people who own the cell towers. They rent space to providers to install their wireless antennas on.

Then there are the people who own the fiber that connects the cell towers to the infrastructure.

Then there are the people who own the (for lack of a better word) "servers" which route and connect the cell calls to the telephone system.
posted by gjc at 5:50 AM on November 7, 2009

it's hard to even conceptualize for someone without a deep understanding of both the technical and business aspects.

You know, I took this out of the original question because it seemed like irrelevant dick waving, but I've read the sections on cellular in Tanenbaumm's (MINIX guy) Computer Networks. It covers the technology fairly well, and I've covered the theory of operation in cellular handoff in grad level CS oriented networking courses. I don't have any cellular specific books, but unless it's necessary to truly understand the business, I don't think it would be worth picking one up.

But his book doesn't cover the markets and contracts of the US markets. It sounds like some of this isn't easy to dig into, with private deals being made. I figured the cellular market was big enough that maybe someone out there had already written a crash course to the industry for public consumption. Perhaps I should revisit this with my father, a former business analyst with Sprint's local phone division and see what he remembers.
posted by pwnguin at 9:37 AM on November 7, 2009