Infonetics Research has released excerpts from its latest “Small Cell Equipment Market Size and Forecast” report. It tracks 3G microcells, picocells and public access femtocells and 4G LTE mini eNodeBs and public access femtocells.
“2013 is shaping up as a kick-off year for small cells, driven by 4G small cells deployed for capacity upgrades,” said Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. “AT&T, Sprint and Verizon Wireless in the U.S., Vodafone in Europe, LG U+ in South Korea, and NTT DOCOMO in Japan, have announced major small-cell plans, driven by the need to enhance the capacity of saturated macrocellular networks as they seek to deliver denser, higher-capacity coverage to tech-savvy populations in urban areas.”
Richard Webb, directing analyst for microwave and carrier Wi-Fi at Infonetics, and co-author of the report, also added that “As operators formulate their plans for small-cell rollouts, one of the key decisions will be how tightly to integrate Wi-Fi. Last year, we saw clear indications that picocells would have integrated Wi-Fi, and this has indeed materialized. Both technologies have similar range and power requirements, which may provide an advantage for picocells over microcells, as the dense cell option could have its own in-built offload option.”
Some highlights from the report forecast the global small-cell market to grow from a very small base now to $2.7 billion by 2017. Because of the current pace of LTE rollouts worldwide, 4G small-cell shipments are anticipated to overtake 3G shipments by the end of 2013. South Korea’s SK Telecom has deployed close to 40,000 small cells and is the leading adopter of 4G public-access femtocells to date. Backhaul is no longer an inhibitor to small-cell growth, but could remain an issue depending on such factors as location or mobile operator. Infonetics expects Asia Pacific to lead the small-cell market in 2013 with 50 percent of all units shipped, followed by EMEA with 34 percent, and North America with 14 percent.
The biannual report provides worldwide and regional market size, forecasts through 2017, analysis and trends for 3G microcells, picocells and public-access femtocells and 4G (LTE) mini eNodeB and public access femtocells.
The game is afoot for small cell operators as they test different technologies, products and topologies for outdoor small cells, according to Infonetics Research’s “Small Cell and LTE Backhaul Strategies: Global Service Provider Survey,” which includes interviews with operators about their current and future plans for outdoor small cells and backhaul.
“Small cell operators are under growing pressure to make the rubber meet the road — not only from their technology and operations people, but even their business planners. It won’t be easy. These operators face some daunting challenges: outdoor small cell gear isn’t small enough or cheap enough yet, and there are problems backhauling in dense urban areas,” said Michael Howard, co-founder and principal analyst for carrier networks at Infonetics Research.
Also, a viable business model must be developed for small cells, he added. When it comes to cost of ownership, a majority of survey respondents require the five-year total cost of ownership of a small cell deployment to be within 10 percent of a typical macrocell deployment.
Small cell providers also face zoning challenges and difficulty finding sites, Howard said. That may leave an opening for third-party providers of small-cell systems.
“If every mobile operator deploys their own set of small cells, then it is just not going to work in most of the major cities of the world,” Howard said. “Think of a street corner with separate boxes each deployed by a different carrier. It won’t fly because of that congestion, which municipalities see as an unsightly, proliferation of little boxes.”
This opens the door for a wholesale operator to run small cells, as well as the backhaul. At least two operators, who are not carriers, are looking at this now. In Europe, Colt Telecom Group and Virgin Media both announced their intention to set up as small cell wholesale providers.
“We see two main sets [of small cell operators] and today there is only one group, mobile operators, that is learning how to deploy their small cells outdoors. Most of them have been deploying indoors for a long time,” Howard said. “However, the multi-carrier small cell systems could translate to the DAS provider paradigm.”
The small cell and LTE backhaul survey reported that 86 percent of the operators plan to backhaul small cell traffic to nearby macrocell sites via a variety of locations on various pieces of road furniture. Although fiber is preferred, various forms of microwave non-line-of-sight (NLOS), standard microwave, and millimeter wave will be deployed most often.
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The latest research from Infonetics provides insights into operators’ current and future plans for outdoor small cells and backhaul in its “Small Cell and LTE Backhaul Strategies: Global Service Provider Survey.”
The challenge is on for small-cell operators, noted Michael Howard, co-founder and principal analyst for carrier networks at Infonetics Research, in a company statement. “They’ve been scrambling to test and trial a large number of technologies, products and topologies for outdoor small cells, and they’re under growing pressure to make the rubber meet the road, not only from their technology and operations people, but even their business planners.”
It won’t be easy, said Howard, because operators are facing daunting challenges. “Outdoor small-cell gear isn’t small enough or cheap enough yet, and there are problems backhauling in dense urban areas, not to mention municipal regulations regarding the look, size and color of the equipment and who can mount equipment on streetlights, utility poles and building sides. Even if they managed to solve all these issues, they’re still going to have to pass the fiscal test. Outdoor small cells won’t fly without a viable business model.”
According to the survey, 86 percent of operators plan to backhaul small-cell traffic to nearby macrocell sites via a variety of locations, including buildings, streetlights, and traffic and utility poles. The same percentage of operators also preferred fiber for backhaul technology when available and cost effective, but the various forms of microwave — non-line-of-sight (NLOS), standard microwave, and millimeter-wave, will be deployed most often.
The survey also showed that by 2016 respondents expected in-building and outdoor small cells (microcells, picocells, and public access femtocells) to handle around one-quarter of mobile traffic.
Infonetics Research has released excerpts from its “Outdoor Small Cell Mobile Backhaul Equipment Market Outlook,” which forecasts the fastest-growing segment of the small-cell backhaul market–outdoor small-cell backhaul–in eight discrete categories: the three forms of wireline (copper, fiber, DSL) and the five forms of wireless (licensed and unlicensed millimeter-wave and point-to-point, point-to-multipoint and non-line-of-sight, or NLOS, microwave). The report tracks and forecasts outdoor small-cell backhaul equipment revenue, units, connections (links) and small cell sites by medium (copper, fiber, air).
According to Michael Howard, Infonetics Research co-founder and principal analyst for carrier networks, in a company release, there has been speculation on the small-cell opportunity, with some that lump small cells with residential femtocells, Wi-Fi hotspots, and in-building wireless and outdoor distributed antenna systems. The latest research focuses on the new, faster-growing outdoor small-cell backhaul equipment market.
“After fielding several small-cell operator surveys and working directly with chipset manufacturers, mobile operators, small-cell vendors, and backhaul equipment vendors for more than two years,” Howard said in the company release, “we are now able to reliably calculate the size of the market and build realistic forecasts. We expect a cumulative $5 billion to be spent worldwide on outdoor small-cell backhaul equipment between 2012 and 2016, with the market kicking into high gear in 2014. This is in addition to the nearly $44 billion being spent on macrocell backhaul equipment during the same 5-year period.”
Richard Webb, directing analyst for microwave, mobile offload and mobile broadband devices at Infonetics, and co-author of the report, stated in the press release, “We expect to see significant shifts in the type of equipment vendors use to backhaul outdoor small cells, with millimeter-wave and non-line-of-sight, or NLOS, equipment becoming the top segments of the market by 2016. Millimeter-wave equipment has a high capacity (1 Gbps in a single channel) and very low latency, and nearly all the operators we’ve interviewed are evaluating millimeter-wave for small-cell backhaul.”
Report highlights indicate that there is no silver bullet backhaul solution for all small-cell deployment scenarios, because each depends on multiple variables, including location, form-factor limitations, local regulations, available power and network, and cost. Mobile operators and backhaul transport providers need a diverse tool kit of solutions for small-cell backhaul. Infonetics expects all the outdoor small-cell backhaul technologies it tracks to grow at high double- to triple-digit percentage CAGRs through at least 2016.
Another highlight shows that the number of outdoor small-cell backhaul connections is forecast to grow more than 100-fold from 2012 to 2016. Also, wireless microwave equipment, including various types of microwave and millimeter-wave, accounts for 89 percent of all outdoor small-cell backhaul equipment revenue in 2012, while copper, fiber and DSL wireline products account for 11 percent.
Infonetics Research expects the macrocell mobile backhaul equipment market to grow to $9.7 billion by 2016. According to the company, 94 percent of all macrocell mobile backhaul equipment spending is on IP/Ethernet gear, with 54 percent of this on packet-capable microwave.
Infonetics expects Ethernet mobile backhaul router revenue to peak in 2015, as the buildout of macrocell mobile backhaul subsides and the focus shifts to small cells.
Michael Howard, principal analyst and co-founder of Infonetics Research, noted in a press release that “steady, albeit slow, growth is in store for the macrocell mobile backhaul equipment market.”
Infonetics is expecting a cumulative $43.6 billion to be spent on macrocell mobile backhaul equipment over the five years from 2012 to 2016, as operators outside of North America buy up microwave gear to support rising capacity requirements. Well over half of all spending in the mobile backhaul market is on microwave equipment.