SAN DIEGO -- Uplinq 2013 -- Qualcomm CEO Paul Jacobs foresees a day when wireless networks will need more than 1,000 times more capacity than they have today, which is why the chipmaker has taken a keen interest in small cells.

It's also why Qualcomm Inc. (Nasdaq: QCOM) has taken a stake in small cell vendor Alcatel-Lucent (NYSE: ALU). Speaking at Uplinq 2013 this week, Jacobs said that the partnership is designed to encourage the entire industry to accelerate their work on small cells, which he sees as the main way wireless operators will keep up with the growing demand for data. (See AlcaLu's Small Cell Menu: Stake and Chips and What's Next for AlcaLu-Qualcomm?)

"Alcatel-Lucent thought they could make a big impact in small cells," Jacobs said. "They were a partner that wanted to take the technology and run fast with it. When you get a partner like that, other companies see that and accelerate their plans too. It's our way to catalyze change in the industry."

Qualcomm builds chips that integrate both cellular and WiFi, but Jacobs said most mobile users today are defaulting to WiFi because they think it's cheaper to do so. Qualcomm's other goal with Alcatel-Lucent is to use small cells to bring down the cost of mobile data by merging the unlicensed spectrum with the licensed spectrum. (See Qualcomm Chips Away at Carrier Wi-Fi.)

"It's deployed like a WiFi access point, but managed efficiently like a cell tower," he explained of small cells. "That is how we'll solve the consumer demand for more data... but that doesn't mean they'll pay 1,000 times more for data. We have to drive the costs down too."

For its part, Alcatel-Lucent was more non-committal when discussing its strategy for integrating WiFi and cellular in multimode small cells. When asked whether all future small cells would include WiFi as well, Nick Cawgan, product manager for Alcatel-Lucent's carrier WiFi group, said it is something it will work out with each of its individual carrier partners. (See Multimode Small Cells Get Stalled in Labs.)

"We are working to understand what makes sense for them based on their business strategy," Cawgan told Light Reading in a recent interview. "That drives what we are doing for them. We are co-creating [small cells] with mobile operators."

— Sarah Reedy, Senior Editor, Light Reading