Small Cells Have a Bright Future

We have been hearing about the promise of small cells for a very long time but looks like it may be about to become true. Quite a few analysts have mentioned about how small cells have an important role to play in both 5G and Private Networks. 

A new report from Dell'Oro Group, announced last week, said:

Preliminary estimates suggest the small cell radio access network (RAN) market (excluding residential small cells) approached 1 to 1.5 M units in the first half of 2020, comprising a double-digit share of the overall RAN market. Aggregate small cell growth is tracking slightly below expectations, partly due to logistical challenges associated with the pandemic. At the same time, small cell RAN revenues improved more than 20% Q/Q in the second quarter, adding confidence the bulk of these transitory challenges are now in the past and are unlikely to impact the long-term demand for small cells.

The global growth outlook for small cells remains favorable, underpinning projections the technology will play an increasingly important role supporting the overall RAN network as operators and enterprises navigate new technologies, spectrum bands, and use cases. Cumulative global small cell RAN investments remain on track to approach $25 B over the next five years, advancing at a substantially faster pace than the macro RAN market. Helping to explain this output acceleration is broad-based acceleration across both the indoor and outdoor domains.

It should be mentioned that Small Cell definitions vary significantly from country to country and analyst to analyst. 

Back in May, a report by Rethink Research had suggested that privately rolled-out enterprise networks will drive the small cell market to 26 million units by 2026. 

The cells, according to the organisation’s RAN Research service, will be “increasingly diverse in form, ranging from compact versions of macro base stations to almost invisible systems embedded in electronic equipment.”

Sixty-eight per cent of these will be deployed in the enterprise and industrial space, enabled by emerging shared spectrum in the mid- and millimetre wave bands. Government, transport, healthcare, and hospitality will “lead the way” in terms of early adoption.

Again, back in May, Mobile Experts provided a new detailed report where they predicted that Small Cell equipment market will reach $5.5 Billion in 2025. Their press release stated:

Mobile Experts published a report today that provides comprehensive analysis of trends in Small Cell development, including 3G, 4G, and 5G.

The report covers indoor and outdoor units in integrated, RRH, and distributed DRS. Residential, enterprise, and carrier segments are broken down in detail, and provide a forecast of 5G and Open RAN small cells deployed in sub-6GHz bands.

Mobile Experts reports that the enterprise segment will be a bright spot for Small Cells. Private LTE and Private 5G networks are on the rise, with new spectrum released recently in the USA, Germany, Japan, UK, and many other key countries considering a similar measure. While growth may be lackluster for a time due to COVID-19, growing interest in private LTE/5G wireless networking for industrial automation and other enterprise applications that require reliable, low-latency wireless links remains strong.

This report offers a comprehensive overall view of Small Cells, including information about technology and architectural evolution, spectrum trends, business model trends, and deployment by small cell customers. This report illustrates the market share positions for each type of small cell, highlighting the large tier-one vendors and also some surprising new emerging stars.

Going back to January, Kagan, a research group within S&P Global Market Intelligence, predicted that Small cell technology will be fundamental in mobile network coverage expansion over the next five years, as both wireless operators and enterprises leverage a combination of indoor and outdoor solutions to deliver 5G services as broadly as possible. Their announcement said:

While dense urban/metro and adjacent suburbs will be the primary focus, operators such as T-Mobile US Inc. that are asserting "nationwide" 5G coverage are also targeting rural areas for small cell deployments. According to new research from Kagan, global small cell shipments are expected to grow from 2.9 million units in 2019 to 3.7 million units by 2021, and 4.2 million units by 2024.

Total combined indoor and outdoor small cell revenue is expected to grow from $1.9 billion in 2019 to more than $2.2 billion for both 2021 and 2022, then decline slightly to just above $2 billion for 2023 and 2024. Following an established progression, we expect small cell revenues to decline even as unit shipments increase, as operators in all regions continue to expand their 5G network and service footprints and ASPs decline. The Asia Pacific market, led by aggressive 5G buildouts in China, South Korea and Japan, is seeing the highest volumes of small cell deployment. North America, driven by U.S. operators Verizon Wireless (VAW) LLC, AT&T Inc. and T-Mobile (which is using 600 MHz low-band spectrum for broader coverage per cell), is also a hotbed of small cell investment and network expansion efforts. Meanwhile, operators in Western Europe and India are likewise increasing their attention and capital spending on small cell densification. Operators in other regions, in addition to highlighting their 5G plans, are also implementing 4G LTE network enhancements, especially in markets such as Eastern Europe, the Middle East and Africa, or EMEA, and Latin America and Caribbean, or CALA, where current 4G coverage and capacity deficiencies must be remedied.

Despite the hype surrounding 5G, to be clear, 3G and 4G LTE deployments are expected to be strong through the next five years, and remain the dominant technology in terms of volume shipments until early 2022, when cumulative 5G small cell units will finally overtake 3G/4G LTE. Why? The fact remains that the ongoing small cell investment and deployment focus by operators worldwide, especially in the largest countries – China and India – is for 3G and 4G LTE network enhancement. And while outdoor coverage expansion is fundamental, indoor small cell network densification is also a top priority for all wireless operators, especially where outdoor coverage is already relatively saturated from a subscriber-per-cell standpoint.

Nevertheless, 5G technology is being deployed in earnest by operators in all global regions, although CALA — the smallest wireless and small cell market by far — will continue to lag significantly behind other regions. The initial 5G deployments, for example, in North America, have been with new radio, or NR frequencies, i.e., the 450 MHz to 6 GHz range, and the millimeter wave (mmWave) spectrum range, from 24 GHz to 52 GHz. The NR 5G small cells deployed by operators such as Verizon and AT&T in the U.S. include both standalone, or SA, and non-standalone, or NSA platforms, the latter leveraging existing 4G architectures and infrastructure to support both 5G services.

As small cell densification by wireless operators moves forward, integrated small cell platforms supporting both 5G and 4G radios will overtake the combined 5G NR NSA/SA small cell shipments in 2021, after a projected dead heat in 2020. The cost of integrated 5G/4G platforms may remain an impediment to the speed of investment for operators, but as volumes ramp up, prices will be driven down accordingly. Nevertheless, operator imperatives for 5G densification will spur accelerated growth of the integrated 5G/4G radios, with an inflection point in 2021 which continues with robust growth of this technology through 2024, as illustrated in the graph below.

"...by 2026, as many as 30% of the installed base of outdoor small cell networks, and 71% of indoor enterprise systems, are likely to be operated by new entrants to the cellular segment..." -- @SmallCell_Forum https://t.co/lyhe4OVkFk

— Ed Gubbins (@EGubbinsAnalyst) July 9, 2020

Interesting. People tend to think of factory or campus settings for private 4G/5G but 1/4 will be public/municipal deployments according to Small Cells Forum #IoT #IIoT #iotpl

Quarter of private LTE and 5G networks will be managed by smart cities in 2025 https://t.co/AKWhtRE6eM

— Matt Hatton (@MattyHatton) May 14, 2020

Each year, Small Cell Forum (SCF) publishes their own market status report, built around a detailed forecast of deployment of small cell networks in a range of scenarios. The core data source is a survey of about 100 operators & other service providers about their plans for the next six years. The report from this year states:

Our top-line global forecast for deployment and upgrade of small cells shows a healthy compound annual growth rate (CAGR) of 13% between 2019 and 2026, rising from a rate of 2.7 million in 2019 to 6.3 million by the end of the forecast period. That represents a cumulative total of 38.3 million small cells deployed (Figure 1).

While the highest CAGR (24%) will be seen in the urban environment, this is coming from a lower starting point – in 2019, over 80% of deployments were in indoor enterprise, industrial and campus settings. Enterprise small cells will account for the largest number of deployments throughout the period and by 2026 will account for 68% of the installed base, with a CAGR of 9%. Rural and remote small cells will be increasingly prominent as a result of the ubiquitous coverage requirements of some industrial and IoT applications, for instance in transportation or mining. The CAGR will be 19% in the period and by the end of 2026, 957 thousand rural and remote radio heads will have been installed.

There are still considerable uncertainties in the market, so there s significant variation between best case and worst-case forecasts. Factors which affect this variation include the immaturity of 5G platforms and business models; immaturity in industrial and IoT business models; potential impact of the Covid-19 pandemic and recession; uncertain timescales for operators to adopt key enablers such as AI-enabled automation or cloud-native networks.

All of these factors may have a greater effect (positive or negative) than currently anticipated, with a knock-on impact on the forecast.

Regardless of who we listen to, the future is looking bright for small cells.

Related Posts:

• Telecoms Infrastructure Blog: 5G Small Cells Definition
• The 3G4G Blog: Macrocells, Small Cells & Hetnets Tutorial
• 3G4G: Small Cells (Femtocells, Home NodeB, Home eNodeB)

Look back and forecast of Small Cells

Going through 'End of Year Report' by ThinkSmallCell. A good summary of what happened in 2016 and what we can see in 2017. This picture above from the same report is interesting. As you can see that the average speeds of 3G have decreased while that of 4G has increased significantly. I suspect what has happened is that the newer devices with more advanced 3G capabilities now have access to 4G while the older devices with basic HSDPA support have stayed on 3G, decreasing the average speeds.

You can also read the top 5 posts from this blog here.

Coming back to forecasts, another ThinkSmallCell Analyst Spotlight webinar where Caroline Gabriel from Rethink research and Kyung Mun from Mobile experts provide their insight into where small cells are headed in 2017 and beyond.

Personally, I think with VoWiFi becoming common in our devices, the market for residential and enterprise eventually will decrease. I hear you say what about QoS, well see my 3G4G blog post here.

Here are the slides and video from ThinkSmallCell webinar:

Small Cells Forecasts...

Small Cell Forum published a report last year titled 'Crossing the Chasm: Small Cells Industry 2015' in which draws on the findings of three very different pieces of research to show that, in 2015, for the first time outside the residential segment, small cells moved from trials and smaller deployments, to large-scale roll-outs, and this process of densification will accelerate from 2016 through to the end of the decade. The three studies each targeted a different base of respondents and so the plans and opinions of three key stakeholder groups – mobile operators, the component ecosystem, and enterprises – are all brought together to create a uniquely multidimensional view of the state of the market today. The report is available here to download.

ThinkSmallCell held their annual analyst forecast with Caroline Gabriel of Rethink Technology Research and Joe Madden of Mobile Experts. Their slide deck (with Video at the end) is embedded below. The webinar could also be viewed directly on Youtube here.

Feel free to add your opinion in the comments section on if you agree or disagree with these forecasts and statistics.

10 million small cells and growing?

There were some good news that was announced in MWC 2015. Here are some interesting points from Total Telecom:

• Operators around the globe have purchased more than 10 million small cells
• In excess of 75 operators worldwide are using small cells in their networks
• The majority of these to date have been deployed in residential scenarios, but we have also seen a significant step upward in the enterprise and urban sectors.
• 17,000 small cells have been deployed in rural or remote applications

While this all sounds good, Small Cells are facing many challenges. The biggest among them being WiFi. With the introduction of VoWiFi, many operators are starting to play a waiting game rather than deploy more small cells.

I blogged back in 2013 that AT&T planned to deploy 40,000 small cells by 2015 but it looks like they have now abandoned their goal. The reason being cited is that they acquired another small operator (Leap Wireless) which gave them additional macro sites, hence removing the need for small cells.

As per a report by the analyst firm ThinkSmallCell, TalkTalk, a UK based "thick" MVNO is trying to deploy an "Inside-out" Femtocell network. They have also been experimenting with 3MHz bandwidth in LTE and surprisingly, it works fine on most devices.


Another option could be to have LTE-LAA/LTE-U along with this and they could provide good speeds not only to the people indoor but also outdoor.

In any case, we will have to wait and see if operators continue rolling out small cells and if they do why, how, where and in which situations.

Small Cells and WiFi Forecast 2013 - 2019

We had this last set of forecasts back in February, here is a new one up to 2019/20.

The slides and the video is embedded below but I want to mention few things here. The first being that in the last year (or since the beginning of this year) the main change that has occurred is the availability of Voice over WiFi (VoWiFi), either as native or as an app, has become a commonplace. What this means that some small cells deployments are no longer high priority and has been pushed back.

On the other hand some operators are conscious that small cells can provide a better QoS than WiFi hence they are going ahead with Small cells deployments.

Anyway, Slides and Video as follows:

Please feel free to leave your opinions in the comments below.

Small Cells and WiFi Forecast 2012 - 2018

I have been following and having some interesting discussions on a Linkedin group where the main argument is that Small Cells may never really take off as its not a good solution and doesn't make a good business case. I think that kind of discussion is best left to do on Linkedin.

ThinkSmallCell held a webinar recently inviting couple of leading experts to discuss their forecasts for Small cells. The webinar slides and videos are embedded below. Here is a quick comparison of what these independent leading experts had to show:

The main point to note above is that we will hopefully hit 1 million public access small cells probably around/after 2015. My view on why operators have been slow in deploying small cells have been mainly to do with interference management. As we know, Small cells are deployed for Coverage and Capacity and is mainly deployed in Co-channel (same carrier as Macro). If there is no or little coverage, Small cells deployment is not an issue. With higher frequencies, the reception in the houses goes down so deploying Femtocells make sense. With public access small cells, interference (especially on 3G) has to be managed. Surprisingly the practical results for co-channel public access outdoor small cells deployed for capacity purpose is not too bad but there is a no coverage area created as a result of interference at the edge of the small cell. This can cause handover issues.

In LTE-A, Interference techniques like (f)eICIC will help handle these situations so I wont be surprised if there are lots of deployments next year with this interference management capability.

The main thing to note is that WiFi will play a huge part for the connected devices of the future. Most of the small cells deployed with also have a WiFi capability so operators can use that to offload traffic from the cellular on Wi-Fi.

My understanding is that in future we will see Macro cells mainly serve high-mobility connections (including connected cars) and Small cells and WiFi will be used for low mobility and fixed access. I guess the real advantage of cellular over Wi-Fi in this low mobility scenario is that since Wi-Fi is unlicensed, there could be interference from many unpredictable sources. Licensed cellular bands dont generally have this issue.

Anyway, the presentation and video from webinar is embedded below:

More than 5 Million Metrocells to be shipped in 2017

From the Microwave Journal:

Mobile Experts has released a new Small Cell Market Forecast, predicting more than 5 million metrocells shipped in 2017.

Based on weak shipment data during 2012, Mobile Experts predicts slow growth for residential femtocells, at only 12 percent per year. Faster growth will come from capacity upgrades, as mobile operators are pushing hard for high-capacity small cells. The new Mobile Experts forecast predicts that, taken together, outdoor metrocells and indoor capacity nodes will overtake residential femtocell shipments in the 2016 time frame.

"The Asia-Pacific market has led the way in small cells, with more than 100,000 public small cells already deployed in Korea and Japan," explained Joe Madden, Principal Analyst at Mobile Experts. "The Asian market is stretching the femtocell into areas where the small cells are handling capacity effectively for operators like KT, SKT, and NTT DoCoMo. Many other operators around the world will follow this example, as the LTE macro roll-out is completed and capacity tightens up in North America, China, Latin America, Europe, and the Middle East. The bottom line is that small cells are 65 percent less expensive than macro base stations, for adding mobile capacity."

This forecast identifies eight different types of small cells, by architecture and by power level. In this year's analysis, Mobile Experts included low-power Remote Radio Head units, multi-band small cells, and Carrier Aggregation into the forecast, with 33 band combinations identified for inter-band CA. The report breaks down small cell shipments by frequency band and identified 38 frequency bands for small cell deployment.

Complete article can be accessed here.

I have to admit that this is a very optimistic forecast on the number of Metrocells. An earlier post that listed the forecasts from Informa suggested that the number of Metrocells deployed by 2016 would be around 681,000.

The Small Cells Analyst Forecast that I posted on the 3G4G blog, did list a similar forecast from Mobile experts though. The picture above lists the differentiation in Small Cells as viewed by Mobile experts and has been obtained from here.