The small-cell sector is entering a new phase that will be characterized by extensive rollouts and flexible—and in some cases very creative—implementations. Indeed, small cell vendors are set to be one of the key beneficiaries of the explosion of cellular and wireless use.
Small cells won’t work alone, though. Observers say they will partner with LTE (which itself is on the verge of major change), Wi-Fi networks and advanced technologies such as deep packet inspection (DPI) to keep wireless networks running smoothly.
The bottom line is that small cells are set to move from the periphery. “3G small cells are mainstream and everyone understands that,” said Rupert Baines, an advisor to small-cell startup Accelleran and a former executive at Picochip. “There are small cells almost universally in carriers’ LTE plans.”
It’s a complex arena, though. There are several types of small cells that can each be outfitted to work on different networks. “The questions are who are the manufacturers… and whether these are LTE-only, LTE plus Wi-Fi, or LTE plus Wi-Fi and 3G,” Baines said. “Some operators have one idea, some others. That switchover very much is the issue of the year.”
While the iterations add complexity, the basic idea behind the small cell is simple. Macrocells—the familiar cellular base stations that are predominantly used today—employ powerful radio technology and cover significant chunks of real estate.
There is no problem as long as demand stays within expected limits. Of course, demand has done anything but that. It has exploded, and the macrocells are increasingly stressed. Small cells are one of the key ways around the problem. They operate in the same spectrum as the macro towers, but serve small pockets of people in more proscribed areas. Sophisticated technology allows the small cell and macro cells to avoid spectrum conflicts.
Changing the Dialog
The growing profile of small cells has been accompanied by a shift in how vendors and other proponents of the technology talk about them. Until a year or so ago, vendors, carriers and others in the loop would talk about femtocells, microcells and picocells. To non-experts, this was about as clear as a menu at a fancy foreign restaurant. There was confusion even among insiders on the lines between the various types of devices.
Things have changed. The different types of devices still exist, but at the highest level, they don’t talk about the individual types of devices. Instead, they refer to the “small cell industry” as a generic whole.
On one level, this simply is smart marketing. After all, “small cell” certainly is more accessible—even a bit quaint. It certainly sounds better than “femtocell” or “microcell.” But it is more than marketing: The technologies used are melding together. For instance, a popular approach to small-cell deployment is to position a gateway between the core network and the wireless base station, according to Joe Madden, a principal analyst for mobile infrastructure at Mobile Experts. This approach, which enables networks to scale thousands of small cell deployments, emerged from the femtocell arena, but is not limited to that specific type of small cell.
At the same time, Madden said, engineering approaches that optimize advanced approaches to signal backhauling and make it possible to drive small cells with Power over Ethernet (PoE) techniques were first imported from the broader telecommunications and IT industries by microcell and picocell vendors.
In short, the world of small cell technology is jumbled, so identifying a particular type of device no longer makes sense.
No matter what approach is taken in marketing materials, the bottom line is that small cell technology is here to stay. Verizon has announced that it will begin deploying small cells during the balance of this year, while AT&T said it will deploy more than 40,000 of the devices during the next three years. In May, Cisco got more fully involved in the sector when it acquired small cell vendor Ubiquisys.
The news from the two companies suggests that the hard work of actually figuring out how to deploy and integrate this new layer of technology is largely done. ABI released research in July that said demand for indoor small cells bounced back from “lackluster” sales in 2011 and 2012 with volumes that are expected to increase this year and next. That expansion and year-on-year growth is outstripping the firm’s initial expectations. The firm predicts that enterprise and consumer femtocell shipments will be 3.8 million units this year and 5.7 million units in 2014. In 2014, outdoor small-cell growth will enjoy 125 percent year-on-year growth and will be valued almost at $3.6 billion.
ABI Research Principal Analyst Nick Marshall saw challenges on two fronts—one fairly mundane and the other far more technical. “You have to get local authority’s permission to bolt them to the lamp post or side of the buildings and deal with the technical aspects of the backhaul, interconnecting in a network and coordinating the handover of the small cell to the macro cells and back again, so a call is not lost,” he said. “You just don’t buy these things and throw them out there and they work.”
An Added Layer—and Added Functionality
Small cells essentially add a layer into the existing infrastructure. That’s not easy to do seamlessly. But the prize, along with bandwidth relief, is the addition of a great deal of flexibility, experts say.
While small-cell technology was developing, two other big picture technologies, Wi-Fi and LTE, were evolving as well. Each affects the bandwidth picture in its unique way. Small cells can work in concert with these standards to optimize networks. It is impossible to generalize, but the idea is that tools such as DPI can assess what is in a packet and, based on rules created by the service provider, use a specific conduit. The key, Madden said, is that cutting-edge networks will have more options and heightened visibility into what they are trafficking.
The world of small-cell technology is growing in size and importance. The second half of 2013 will be pivotal. “It’s sort of halfway through the race,” Baines said. “In six months, we will see a lot more operators launching. We are starting to see some interesting service models coming out.”