ClearSky offer a neutral host small cell managed service, essentially competing for business with DAS in-building solutions throughout the USA. I spoke with Dean Fresonke, Co-Founder, and challenged him about some of the concerns often raised about this managed Small Cell as a Service approach.
What’s the scope of your managed neutral host solution?
At ClearSky we host our own small cell gateway based on the Cisco components that we extended with custom software to handle multi-tenant requirements and connect to multiple network operators.
We would deploy multiple sets of small cells within each building, typically with the same footprint and layout for each mobile network. The system can support both 3G and 4G/LTE in any licenced cellular band. Our team would take care of the in-building RF design, configuration and commissioning. We would expect the physical onsite cabling and installation to be done by sub-contractors, often a system integrator already familiar to the building owner. We handle ongoing system management, optimisation and equipment moves/changes/upgrades.
As we roll out new buildings, the network operators only have to approve our design plan. Some minor configuration of macrocell neighbour lists may be required to optimise hand-in for when users enter the building.
This makes the business model very scalable. It doesn’t require a lot of resources within the operator. We can scale up using local system integrators. The majority of the funding is contributed by the building owners and businesses rather than the network operators.
So who would actually sell this solution the building owner?
There are two models – direct via ClearSky and indirect through a reseller. That could be an existing DAS system integrator, a small cell reseller or a Wi-Fi company. Typically someone who already has a relationship with the building or business owner. Neutral host small cells wouldn’t normally be sold directly by an individual operator because by definition this is a multi-operator solution.
What’s the deployment timescale?
I’d say months rather than quarters from start to live service, with a project rarely taking more than three months from when engineering work starts. Initial enquiries include buildings that are under construction or still on the drawing board and want to design in full cellular service. In those scenarios the full sales cycle can be a year or more. The wide adoption of CAT5/CAT6 infrastructure cabling greatly simplifies and speeds up deployment..
Is there a specific niche target market for neutral host small cells?
We see a strong pull for public or semi-public spaces, because there is an equal mix of customers from each network operator. Examples include retail, multi-family residential, higher education and hotels. Building managers in these segments are motivated to provide their walk-in customers with good cellular experience.
That differs from the classic business office space serving their own employees. For example, if most staff are AT&T customers then perhaps it’s best if AT&T do it themselves with a dedicated single network solution.
Small Cells would require duplicate equipment and multiple antennas around the building. Is this a problem?
Band plans across the US are so broad and varied with many regional variations that we do need separate physical equipment for each network. This leads to three or four sets of radio gear distributed around the building. Most can be hidden in the plenum (above the false ceiling) or otherwise out of sight with only the antenna visible.
Some equipment can share a common antenna, and this depends on the hardware provider and product design. Many designs today come with an integrated antenna and it’s still a new concept to use an in-building antenna combiner with multiple radio heads or small cells.
Is there any preference for 3G or 4G only systems?
I think we’ll need to support both radio technologies for some time. There are already dual-mode 3G/4G small cells such as from Spidercloud. We expect to see further product evolution as the industry continues to mature.
Won’t we see more efficient neutral host solutions such as MOCN and MORAN adopted?
There are technical solutions which would allow a single set of small cells to serve users from multiple networks (MOCN and MORAN), but these aren’t used in the US. They continue to be rejected by US network operators, who have political and commercial reasons to operate independently. I am a fan but we’re not seeing any interest in adopting that approach in the US.
How big is the market opportunity?
The in-building enterprise market is underserved. We aren’t seeking to displace or replace existing DAS deployments and instead we focus on greenfield buildings. The DAS industry has delivered remarkable solutions and continues to achieve amazing success. But there’s a lot of virgin territory out there in mid-sized properties that has been underserved because of the high installation cost of DAS – something we feel we can address.
In the market segments we focus on, building owners are motivated to contribute the majority of the costs involved. We can see this would be additional budget (over and above existing Wi-Fi investments) but money is available to solve coverage problems, provided its not seen as unreasonable or excessive.
We have seen quotations for DAS installations being comparable with Small Cell costs. However, a DAS also requires dedicated radio sources (base stations) that are needed to drive it. Small Cell solutions implicitly include the radio source.
Why should building owners choose Cellular rather than Hotspot 2.0 Wi-Fi?
- Not every property manager wants anyone and everyone connecting to their Wi-Fi network. For instance, hospitality properties want you to log onto their Wi-Fi system, so they know who is using it (and capture details such as name and room number). Passpoint automates and bypasses that, so they won’t know who is using their Wi-Fi and can’t upsell premium speed/service. They aren’t interested in serving passers-by who may suck up bandwidth, degrading performance for other paying guests.
- There is no QoS within the building; quality service is unpredictable and can easily be abused. Some traffic shaping and management systems help alleviate that, but there is still high variability.
- Constant issues with capacity (e.g. a lot of guests wanting to stream Netflix). Any Wi-Fi capacity upgrade is quickly soaked up. Basic vs paid premium tiered Wi-Fi service may help address that, which again adds complexity.
For hotel Wi-Fi, I believe it naïve for the Wi-Fi industry to think it could become the end-all, be-all for voice quality services. Wi-Fi Calling should be useful for home and possibly some small office environments but not in public spaces or larger buildings.
Somewhat contrary to the network operator perspective, the hotel industry looks at cellular as an offload for their Wi-Fi. Part of the overall business case is to retain traffic on licenced frequencies, chargeable by the network operator as part of each user’s cellular service plan.
Ultimately, both Wi-Fi and Cellular service are needed to satisfy expectations.
Finally, any thoughts about LAA/LTE-U and LWA?
We hear a louder groan from the hotel industry. They already have fully loaded unlicensed spectrum and don’t see this would add capacity. The approach does have some viability and will work in some vertical sectors but it will take some time for the hospitality industry to come around to it.
Both LAA and LWA are great technologies but not a universal solution. They both have their own merits and I can’t say which would win out. In either case, they’ll both need the same “back end plumbing” as small cells to make the system work seamlessly with the cellular infrastructure and it will take some time to roll out.