A new report shows that the combination of cellular and Wi-Fi greatly improves the business case for LTE and 3G small cells.
When small cells are combined with Wi-Fi, it becomes a powerful tool for mobile operators to increase data capacity and reduce wireless data costs, according to a report from Senza Fili Consulting. The report, “The Economics of Small Cells and Wi-Fi Offload,” explores the business model for the coexistence of small cells and Wi-Fi within the same network and identifies strategies that enable mobile operators to optimize their networks and spectrum resources and to minimize per-bit costs.
“I have written extensively on how both small cells and Wi-Fi are needed to provide the capacity boost we need to meet the rapidly growing traffic load, and mostly expounded on the strategic and deployment merits of the argument,” said Monica Paolini, author of the report and president of Senza Fili Consulting. “But any decision about how small cells and Wi-Fi will coexist in the sub-layer depends to a great extent on the underlying economics.”
Operators also may reap additional gains by deploying both Wi-Fi Nodes and small cells inside of the same enclosure, increasing the capacity of each small cell and integrating Wi-Fi traffic more tightly within the cellular network, according to the report.
“By deploying LTE, 3G and Wi-Fi jointly as part of an integrated sub-layer of small cells, operators can meet their capacity targets faster, leverage their existing Wi-Fi footprint and significantly reduce their per-bit costs,” Paolini said. “The business case for small cells can be challenging, especially for 3G. Adding Wi-Fi to small cells strengthens the business case.”
To demonstrate that the combination of small cells and Wi-Fi, as well as the combination of 3G and LTE in the same small-cell enclosure is financially compelling, Paolini built a total cost of ownership (TCO) model that compares capex/opex and per-bit costs for many small-cell configurations, including single/multiple-sector, indoor/outdoor and with any combination of Wi-Fi, 3G and LTE.
The report notes that the TCO for small cells and Wi-Fi is 75 percent to 90 percent less than the TCO for a macro cell. The OPEX can be reduced through multi-sector and multi-interface small cells, leading to a more robust business case, according to the report.
“The low marginal cost makes adding Wi-Fi, 3G or additional sectors to an LTE small cell an attractive proposition that reduces the number of sites a network operator must manage and increases capacity more rapidly,” Paolini said. “Small cells and Wi-Fi enable operators to slash per-bit TCO by at least half. By combining cellular and Wi-Fi, operators can cut the per-bit TCO to a third of the TCO of macro cells.”
The report is available at www.senzafiliconsulting.com