Insight: Small Cell Business Models and Opportunities

Posted by Mae Kowalke on Tuesday, May 12, 2015 with No comments

In response to customer needs, there's a growing focus in the wireless industry to improve indoor coverage using distributed antenna systems small cells, (DAS), Wi-Fi, and other technologies. But, RCR Wireless notes, spreading capacity and coverage through large buildings is often an engineering challenge. 

A recent Mobile Experts report, RCR Wireless said, predicted the in-building wireless market will double in the next three years, driven by growth in twisted pair cabling and low-cost signal sources. There's a convergence underway of DAS and cloud radio access networks. Small cells and carrier grade Wi-Fi are also influential. 

In another recent RCR Wireless article, SpiderCloud Wireless SVP and CMO Ronny Haraldvik stressed the importance of understanding how DAS and small cells differ, to be clear on their role in improving coverage. Although some vendors have started marketing DAS products as small cells, they are different technologies. 

A small cell, he explained, is an operator-controlled, low power radio access node. Some, but not all, small cells are based on femtocell technology (standards, software, etc.). DAS systems, on the other hand, are spatially separated antenna nodes connected to a common source. 

The similarity between DAS and small cells is their purpose: to provide wireless service within a geographic area or structure. Customers don't care what technology is used, so long as it works. Modern small cells tend to be less expensive and provide faster ROI than traditional DAS. 

Coverage challenges aren't limited to indoors, of course. 

Atlantic-ACM senior partner Aaron Blazar noted in an RCR Wireless Analyst Angle article that the best way to resolve outdoor densification deployment economics remains a big question in the wireless infrastructure market. Consolidating the value chain between site and fiber businesses has great potential.

The way that's traditionally been done, Blazer explained, is to have partnerships between leasing entities and fiber network infrastructure providers. The economics of that model, though, are hard to pull together. Finding the right combination of assets for cost-efficient deployments is the key. 

As carriers search for workable business models, RCR added in another article, they'll need to abandon the macro mindset before small cells can really take off. Adding capacity to network using small cells can be very effective, but the investment is often hard to justify.

Attaching small cells to existing structures in urban areas--like street light poles--are an opportunity for carriers to create mini cell towers where they are most needed, said Crains Cleveland Business. Carriers are increasingly taking advantage of that, despite the cost and effort involved. The number of small cells in the U.S. is predicted to jump from 40,000 to 52,000 this year--an increase of 30%.

And, the opportunity for small cells isn't limited to major carriers expanding coverage in cities. Mobile World Live interviewed Small Cell Forum CEO Sue Monahan, who said there is a wealth of opportunity for this technology, with applications ranging from transport (e.g. ships and planes), to disaster recovery, to industry (e.g. mines and oil rigs). 

Basically, Monahan's stance is that small cells can and should be used any place there isn't wireless coverage already. 

Indeed, as RCR Wireless editor Martha DeGrasse pointed out, applications for small cells include home use (femtocells), urban outdoor deployments, indoor enterprise deployments, high-capacity venues like sports arenas and convention centers, and rural deployments. 

What other application opportunities do you see for small cells?
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