It's that time of year again, when we (and many other analysts) reflect back at the year gone by and look ahead at what developments await us next year.
First, let's put ourselves in the spotlight and revisit our predictions from December 2012, see if we got them right, and look at how the Small Cell industry might evolve next year.
Revisiting last year's forecasts for 2013
We've attended many industry events and interviewed many industry players this year, giving good visibility of the progress being made and allowing us to report back on progress. (You can read our individual event reports here.)
Let's work through the predictions from our 2012 End of Year Report Card
1. Metrocell backhaul is going to be one of the hottest topics for 2013, as operators try to figure out the cheapest, easiest and quickest ways to connect that last few hundred metres. Expect the first commercial deployments of radical new technologies.
Correct: There's been no shortage of technology options competing for the prize of small cell backhaul, with the larger operators not just running trials but working co-operatively with many of these new vendors to perfect the technology. Few of these vendors have seen any significant volume of metrocell backhaul commercial products shipped as yet, either relying on the growing investment funding in this area and/or selling product into related application areas (e.g. campus buildings, CCTV etc.). I still sense that 60GHz point-to-point links will be a popular early choice, but smarter use of more traditional microwave bands (using point-to-multipoint and/or mesh) is also highly competitive. The claims from some of the newest Non-Line-of-Sight vendors seem quite incredible to many, and if proven and accepted could become extremely useful. Let's not forget that fibre and copper still have a role to play. And don't discount free space optical which could offer surprises.
Evidence that this is a complex and evolving technology area for the industry are the separate Small Cell Backhaul streams within the main conferences. While there is enormous pressure to reduce the cost of a link (say to $1000 or less), it's clear that the capital cost of the box isn't quite as important as the total lifecycle cost or lower skillset to install.
Fastback tell me that their NLoS backhaul is already being used for commercial service and we also hear of limited deployments of many of the new technology options under development.
2. Deployment of new Wi-Fi features such as Passpoint and Hotspot 2.0 will start to make use of Wi-Fi even more seamless experience. However, the blazingly fast speeds of LTE (where available) will reduce the desire to seek out Wi-Fi hotspots quite so much.
Very close. The first HotSpot 2.0 services are trickling out. The service has not reached me yet but my iPhone has already been updated to support it as part of iOS7. So I believe this could be activated and become widespread fairly quickly, with many Carrier Wi-Fi hotspots and smartphones being easily software upgraded. So should expect this to become more visible over the next 6 months. Ruckus Wireless has a good explanatory webpage and white paper on how the technology works.
Many Wi-Fi/Cellular commercial roaming agreements are being signed. Now that the technology and operational issues are understood, the commercial and competitive implications of Wi-Fi and cellular roaming will come to the forefront. WBA reports that Tier 1 Mobile Operators expect 22% of their new capacity during 2013/2014 will be achieved through Carrier Wi-Fi. We should also be aware that much more is already connected through private Wi-Fi at home and in the office, as well as locations offering free Wi-Fi service to their guests.
3. DAS (Distributed Anntenna Systems) will continue to have their place, but we'll see growing interest in Enterprise Femtocells (if that's what they're still called) to address in-building service.
Yes. I'd say this is definitely on course with many operators quietly deploying Enterprise Small Cells. AT&T publicly have plans to install literally tens of thousands over the next couple of years as part of Project Velocity, and others (both in the US and elsewhere) are clearly taking them up. The Small Cell Forum's Release Two Enterprise documentation published this month will help move this forward. Enterprise Small Cells will make a dramatic difference to indoor voice call quality as well as data speeds and capacity, as we continue to migrate from fixed to mobile devices for more of our communication needs. Some DAS vendors are developing their own Small Cells, but I've seen few (if any) exhibited at Small Cell conferences this year.
4. The first "Small-Cell-As-A-Service" commercial deal will be announced. The telecom industry is very conservative at times, so I wouldn't like to predict more than a few. If they are seen to work well, many others will follow in due course. The UK may be the trailblazer for this concept.
No, not yet. I've seen a few new entrants offering this capability, and Virgin UK, Cloudberry and others continue to promote their capabilities. COLT has scaled back and repositioned it's marketing messages. Some operators are working hard to adapt their internal processes and methods to be able to deploy large numbers of small cells themselves (or through contractors). I expect others will find themselves unprepared and at a competitive disadvantage in the not too distant future, leading them towards an outsourcing arrangement. The Cable TV companies in the US would be one to watch.
5. Multi-mode small cells will be commercially available from several suppliers. The first will be deployed.
Yes. I have seen several multi-mode products at various stages of development and NTT DOCOMO has commercially launched their Xi 3G/LTE femtocell service. There are some tremendous small cell silicon products becoming available at the moment and we should see more commercially proven and validated multi-mode 3G/LTE products onstream next year.
6. The first LTE-Advanced small cell will be demonstrated.
Yes - we have seen demos at exhibitions of Carrier Aggregation, achieving high data rates.
7. The LTE feature eICIC will be commercially deployed in at least two countries, significantly reducing interference issues.
Maybe. Although certainly deployed in South Korea, I've not definitively seen this announced elsewhere. Japan would be my best guess as the next. Trials are ongoing, evidenced by Anite shouting about their test gear that supports it.
8. Data traffic levels will double (again), but more significantly the uplink data traffic will grow even faster.
Probably. I can't find a public statistic or report to confirm this, although I know my own behaviour includes uploading more data and synchronising using Cloud services. Cisco VNI had forecast a growth over coming years in cellular data of around 66% annually but that excludes the majority of data traffic to our smartphones and tablets which uses private/office Wi-Fi. It's important to distinguish between the different types of Wi-Fi access, which to some extent hides the phenomenal growth of wireless data. The huge adoption of smartphones further continues apace – over 1 Billion will have been shipped during 2013. Although now 6 months old, I found this analysis of Internet development by analyst Mary Meeker very insightful. ABI Research published a nice infographic showing 2013 growth in subscriptions and devices of all types.
9. Data roaming rates will continue to be punitive outside the European Union. LTE roaming won't be introduced – you'll continue to be limited to 3G when abroad.
Surprisingly No. Roaming is one the last bastions of the cellular business – extremely lucrative and profitable for operators, very annoying and painful for consumers. It definitely drives behaviour of how and where we connect when abroad, driving use of local SIM cards and Wi-Fi alternatives.
LTE roaming services have launched around the world, such as this 10 operator roaming hub in South America.
I've noted that the ludicrously high roaming rates for cellular data have dropped substantially in Europe and there are signs it might do elsewhere. Examples include T-Mobile USA offering free roaming (at 2G speeds) to 100 countries. My own provider, 3 UK, dropped roaming surcharges for the USA this month so I can use my bundled minutes and dataplan for free when visiting there. This means I'm much less likely to seek out Wi-Fi service, especially since this can be even more expensive (BT charge 10p/minute for European Wi-Fi roaming and my hotel wanted $13/day).
10. The first VoLTE (voice over LTE) commercial service will be launched. Most LTE operators will continue to run with CSFB.
Yes. Korea benefits from VoLTE service and MetroPCS launched in the US, but I don't believe it's commercial in any other country yet. Trials are at an advanced stage but there seems to be some reluctance to launch until it's at least as good as 2G/3G. Verizon, AT&T, China Mobile and others deferred their launches until next year. I still believe many operators will remain with voice on 3G for many years using CSFB (Circuit Switched FallBack). For example, China Unicom indicated that was their intention at Small Cells Americas earlier this month.
|Metrocell backhaul is going to be one of the hottest topics for 2013, as operators try to figure out the cheapest, easiest and quickest ways to connect that last few hundred metres. Expect the first commercial deployments of radical new technologies.||Yes||Major topic at Small Cell conferences although commercial orders growing slower than vendors would like|
|Deployment of new Wi-Fi features such as Passpoint and Hotspot 2.0 will start to make use of Wi-Fi even more seamless experience. However, the blazingly fast speeds of LTE (where available) will reduce the desire to seek out Wi-Fi hotspots quite so much.||Very Close||The technology and commercial aspects are in place, but it's not reached mass market yet.|
|DAS (Distributed Anntenna Systems) will continue to have their place, but we'll see growing interest in Enterprise Femtocells (if that's what they're still called) to address in-building service.||Yes||Substantial interest and momentum building for Enterprise deployments|
|The first "Small-Cell-As-A-Service" commercial deal will be announced. The telecom industry is very conservative at times, so I wouldn't like to predict more than a few. If they are seen to work well, many others will follow in due course. The UK may be the trailblazer for this concept.||No||Trials but no big deals announced yet. Watch this space.|
|Multi-mode small cells will be commercially available from several suppliers. The first will be deployed.||Yes||More dual mode products on show. DoCoMo launched their Xi dual mode femtocell|
|The first LTE-Advanced small cell will be demonstrated.||Yes||Mobile World Congress had several LTE-A features on show|
|The LTE feature eICIC will be commercially deployed in at least two countries, significantly reducing interference issues.||Maybe||Definitely launched in South Korea but no public statement I can find elsewhere|
|Data traffic levels will double (again), but more significantly the uplink data traffic will grow even faster.||Probably||Cellular is growing annually at 66% according to Cisco, but more if include Wi-Fi data as well.|
|Data roaming rates will continue to be punitive outside the European Union. LTE roaming won't be introduced – you'll continue to be limited to 3G when abroad.||No||Rates remain high, but some surprises from a couple of operators offering free roaming. LTE roaming is becoming established with commercial operations in place worldwide.|
|The first VoLTE (voice over LTE) commercial service will be launched. Most LTE operators will continue to run with CSFB.||Yes||South Korea is the place to use VoLTE. Many operators plan to launch during 2014, while others will stick with 3G and use LTE only for data.|
ThinkSmallCell Predictions for 2014
I've deliberately kept the list a bit shorter this year:
- The Small Cell Ecosystem will expand in scope. We'll see a wider range of suppliers and services developed to meet growing market needs. This is especially true for aspects linked to deployment and outsourcing such as planning, site acquisition, commissioning and management. There will also be innovations promoted which use more unusual technologies.
- The way we use Wi-Fi will evolve dramatically. Some operators will take more control of smartphone Wi-Fi, turning it on and off without the users knowledge or involvement. Passpoint and Hotspot 2.0 will improve access and use of commercial Wi-Fi services. Quality of service and the commercial benefits to all parties (building owners, operators, end users) will become more important issues. We'll also become more aware of its limitations.
- The first "Small-Cell-As-A-Service" commercial deal will be announced. The telecom industry is very conservative at times, so I wouldn't like to predict more than a few. I thought we'd see a deal in 2013, but it looks like operators aren't making that leap. Once their focus shifts from early LTE launch, we should see growing attention to Small Cell options.
- Multi-mode small cells will be commercially available from several suppliers. The first will be deployed, but most sales will be single mode 3G or LTE (with Wi-Fi).
- Increased revenues will start to flow throughout the Small Cell industry, from equipment vendors to services organisations. Many companies who have made heavy investments for many years will start to reap the benefits of their persistence. I even heard one supplier claim to be making a profit at last!
Have you got any other/different predictions for the year ahead? Have I missed anything?
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Lastly - Happy Holidays