Small cell market report

06 November 2013 |

Brought to you in collaboration with Dell'Oro Group.

Market evolution
Deployment of small cells is now widely recognised as an important next step for operators to embrace. At a high level, the market can be divided into three segments: residential, SMB/enterprise and public access.

Residential femtocells have been in deployment since 2007 and have primarily been used to support voice coverage. Success has been limited due to both business model challenges and technical need – the macro network for the most part has been sufficient for basic voice coverage.

The next logical step for the leaders in the residential femtocell segment was to scale the RF power and processing capabilities to support more users for the enterprise-use case. While Wifi has successfully penetrated this portion, enterprise femtocells have not had the same success. This is a segment, however, that has potential not only for voice, but also for data. There is considerable activity in this segment.

In the public-access use case, Dell’Oro Group divides this segment into traditional and evolved small cells. The traditional micro/pico small cells have been available since the 1990s, primarily used for voice fill-ins. The evolved small cells – also referred to as metro cells or advanced small cells – are the new generation: compact, lightweight, low-power nodes that will be used to complement the macro network and eventually play a crucial role in the heterogeneous network.

Backhaul requirements and forecast
Dell’Oro Group forecasts the small-cell market will eclipse $0.5 billion in the next five years. As small-cell deployment sites are located in metro areas with higher fibre availability, we believe operators will choose fibre/copper backhaul. Even in fibre-rich areas, however, fibre is not easily accessible. We estimate that in 2017, fewer than 40% of sites will be accessible to fibre, the majority of which will likely be at larger aggregation sites. The remaining share of sites are expected to use microwave backhaul.