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Small cells will unlock value of underused spectrum
Two thirds of small cell base stations will be deployed in bands above 2.2 GHz by 2016, compared to fewer than 40 percent in 2013, according to the latest research report by Maravedis-Rethink entitled, "Transforming the Mobile Data Network: Operator Strategies for Profitable Small Cell Networks 2012-2016," based on a global survey of mobile operators.
The use of small cells in public 3G and 4G networks will increase the usage, and the value, of spectrum of 2.3 GHz and above. A key motivation for carriers to invest in this technology will be the ability to free up the vast capacity in high bands for mobile services.
"Higher bands have often been uneconomical for cellular networks because of their short range, but the economics will be transformed by small cells, which only need to cover small populations," says Caroline Gabriel, research director of Maravedis-Rethink and the report's lead author. This could free up huge data capacity - many carriers are looking for a fivefold increase by deploying underused bands.
The report forecasts that deployment of public access small cells, for 3G and 4G, will rise from under 30,000 in 2011 to 11.3m in 2016, amounting to a capex spend of almost $4bn, up tenfold in a five-year period. This leap in mobile capacity will enable new revenue streams, and will be partly driven by the availability of more spectrum, including a potential 100 MHz in the 3.5 GHz band.
"These roll-outs will only deliver business benefits and new services if they are planned effectively to unleash the maximum amount of capacity and spectral efficiency," Gabriel added . Small cell networks could unleash large amounts of underused spectrum capacity, much of it available at low cost today. This can change the economics of 4G spectrum and data services.
Obstacles remain, of course. According to the survey, backhauling millions of small cells, securing locations, and managing them effectively are the chief concerns. All of these are discussed in detail in the report.
The ground-breaking study is based on a detailed survey, with interviews conducted over several months of 65 wireless operators worldwide which are planning public small cell deployments. It also draws on data from Maravedis-Rethink's flagship research services, 4G Counts and ClearSpectrum, which track carrier mobile broadband deployments and 4G spectrum availability around the world.
OTHER KEY FINDINGS:
- Despite the availability of automated techniques like SON (self-organizing networks), over 40% of carriers will invest in new planning and management tools optimized for small cells
- Finding and acquiring the right locations for small cell deployment is regarded as the number one obstacle to achieving optimal benefits from a small cell network
Two thirds of operators expect the number of base stations they run to have grown by 10 times or more by 2016.