Rural and remote deployments drive surge in small cell market in 2017

telecomasia.net

The world is getting smaller, thanks to mobile technology. But I’d argue that it wasn’t the wireless telephone claims of Professor Albert Jahnke in 1908 and the Oakland Transcontinental Aerial Telephone and Power Company. For me, it was the image of Captain James Tiberius Kirk of the USS Enterprise in the short-lived television series Star Trek (1966) with a communicator that may have inspired Motorola to launch the Motorola DynaTAC 8000x in 1983.

Of course while consumers can attribute the growth of wireless mobile communication to the handheld device or handset, its popularity also rides on the ability to connect people across vast distances seamlessly. For that one of the technologies we have to be thankful for, particularly in increasingly dense cities, are the small cell networks.

Growth of small cells

IHS Markit estimate that 2.3 million small wireless communications equipment (small cell units), including DAS remote units, remote radio units, self-contained small cells, were shipped, an increase of 39% year-on-year, with revenue totaling $1.8 billion, up 20% year-on-year.

Driven by activities in China and India, Asia-Pacific led all regions in service provider small cell units, with 56% in 2017; the remainder of the bulk of small cell rollout activity was in Canada, Japan and the US, according to the research firm. Driving this growth is deployment in rural and remote areas, particularly individual large-scale deployments in India by Reliance Jio — and to some extent in China.

The market also benefitted from 4x4 MIMO and 256QAM upgrades on existing small cells, as new products that support these features are more expensive.

“We continue to see increasing small cell activity, with impact being made by enterprise small cell services offered by MNOs to attract high-value corporate and vertical customers,” said Richard Webb, associate director, mobile backhaul and small cells research at IHS Markit. “This enterprise segment is strongly fueling indoor small cells unit shipments, which are far greater than outdoor small cell rollouts.”

Twilight of 3G

Navin Vohra, vice president, Service Provider, Asia Pacific, CommScope, noted that the rapidly developing markets such as India, Indonesia, Vietnam and Malaysia are still trying to move from 3G to 4G and that is likely to continue into 2018.

“We will expect fewer 3G users in most of these countries, as investment in 4G continues to increase.  It is clear that 4G is going to continue to be the main technology driving infocom technology infrastructure including small cell deployment and will likely serve to fulfill the majority of requirements today in these regions,” he added.

The future for small cell, in particular, and the communications industry in general, remains positive. 4G deployments across Asia Pacific are near completion. Wang Jing, small cell solution manager at ZTE, noted that the regioOKn’s dense cities fit nicely with the characteristics of small cell solutions.

“Particularly, in hotspot areas, such as indoor airports, stadiums, shopping malls, outdoor CBD streets, etc., operators require rapid deployment of hotspot, zero footprint and concentrated coverage. These make small cell a perfect solution, with features such as the integration of BBU and RRU, and small size. The lower power requirement than macro RRU provides significant cost advantage,” he added.

Challenges remain

Commscope’s Vohra noted that pragmatism will pervade in 2018.

“We are already seeing the spirit of experimentation among service providers, as test beds and trials build steam. Densification, virtualization, optimization and simplification of networks will continue to define the goals of network operator deployments,” he added.

All of this testing makes it clear that 5G is bringing new market dynamics and opportunities, but significant challenges need to be surmounted. Many operators are focused on driving fiber deeper into their networks to enable Centralized or Cloud RAN (C-RAN) architectures and large-scale small cell deployments that bring the fiber hop-off point closer to subscribers.

The whole industry has been talking about the challenge of real movement to standardize and speed small cell deployments for a while, but small cells are still just too hard to deploy. Site acquisition is a huge challenge. “We’re starting to see larger volume projects, but it still takes longer than anyone wants. Zoning processes that last 12 months or more are just too long. We expect 2018 is real movement on nationwide efforts to standardize and speed small cell deployments,” Vohra pointed out.

ZTE’s Wang believes that 5G deployments will be a boom for small cell deployments, given the higher frequencies associated with 5G service will mean shorter signal ranges, hence more cells to provide the same footprint coverage as 4G. However, he believed it will be applications that will dictate the extent of small cell deployment in any given market. Things like VR/AR, holographic imagery, real-time positioning, real-time motion data analysis, and other services have grown rapidly.

The product form of 5G small cell is richer [compared to 4G]. It will not be just a single integrated architecture, but there will be a variety of product series such as distributed, all in one integrated, and radio remote based on different services and scenarios.

Outlook

Longer term, IHS Markit projects the small cell market to hit $2.8 billion in 2022, growing at a compound annual growth rate (CAGR) of 9.6% over the five years from 2017 to 2022.

Stéphane Téral, executive director, mobile infrastructure and carrier economics research at IHS Markit said “The volume of indoor units will continue to increase above that of outdoor out to 2022. However, outdoor revenue will be higher because outdoor small cells are significantly more expensive with new 4G features such as higher-order MIMO and 256QAM.”

IHS also noted the indoor market, comprising the indoor urban and enterprise sub segments, is moving rapidly toward commoditization as volumes rise and service providers seek plug-and-play form factors.

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