Small Cell Is an Outsourcing Opportunity

By 2018, 20 percent of mobile service providers surveyed by Real Wireless expect to have deployed large small cell networks of over 100,000 locations, excluding Wi-Fi-only hotspots, and 70 percent of surveyed mobile operators will have deployed networks of between 25,000 and 100,000 small cells.

Though most of the deployment might not happen until 2016, the survey also suggests that mobile operators have concluded small cell networks will have to be denser than expected, as recently as two years ago. Should that forecast prove accurate, the base of installed small cells will grow 15 times to 20 times above current levels.

About for 3G or 4G small cells, 55 percent of respondents already are testing or deploying 3G and 4G small cells. Most respondents say networks will expand rapidly after 2014, as organizations are waiting for clearer evidence of the business case and technology and operating improvements of several types.

Automated tools and processes for site, backhaul, and RF planning and provisioning, as well as

low cost cell site equipment and of backhaul assets, especially fiber, are among the areas where network operators expect to see improvements over the near term.

Potential deployments also will accelerate once software optimized network platforms are more standardized.

Respondents also say they are waiting for wide availability of LTE, LTE-A, and cellular/Wi-Fi base station systems.

The study also suggests that thinking about payback has moved beyond simple coverage and capacity, and now relies more heavily on potential new revenue streams based on small cells, such as personalized services and machine-to-machine services.

As you might expect, backhaul choices vary by market and region. Overall, mobile service providers prefer optical fiber access, when they can buy it, or deploy it, affordably.

That is not the case everywhere, so, as a practical matter, wireless backhaul is expected to be common in Europe, while fiber will reign in China, Japan, and Korea, and cable connections are predicted to be significant in North America.

In fact, in North America and Europe, respondents believe backhaul will be handled in almost equal shares by optical fiber, wireless, and cable TV backhaul connections.

In about 30 percent of cases, respondents say they will build and deploy their own small networks. In 40 percent of cases, respondents believe they will own the networks, but outsource the deployments.

About 30 percent of respondents said they would consider outsourcing to a third party.

That represents a clear opportunity for cable operators, some opportunity for some telcos, and possibly some system integrators.