As we approach the holiday season, it’s once again time for me (and other analysts) to reflect back on the year gone by, revisit our predictions and make some new ones for the year ahead. We've seen some steady progress throughout the year with several leading small cell vendors gaining traction. New features, especially use of unlicensed and shared spectrum, promise easier access to both speed and private deployments in 2-3 year timeframe.
My overall view is that last year’s predictions were generally correct and in the right direction but progress towards them has been slow but steady. This often seems to be the case with Small Cell forecasts, with operators themselves more optimistic about how quickly they can deliver.
Highlights include the massive greenfield 4G rollout by Reliance Jio in India, involving 10Ks of Airspan (outdoor) LTE small cells, SpiderCloud's adoption by Verizon (see our case study), Parallel Wireless showcase demos for FirstNet, deployment in buses for M1 Singapore and 3G/LTE dual mode rural trials with EE UK and ip.access neutral host platform sale in Brazil. It's also easy to overlook the continuing shipments of millions of residential femtocells (mostly 3G) across the installed base with Free France is almost certainly the largest deployment (they ship these as standard with every set top box). A few neutral hosts are starting to appear, small cell wireless backhaul is being used for Enterprise and Wi-Fi schemes, in-building planning tools are mature and now widely accepted, SON and other software tools better understood.
The wider context
I’ve observed wider themes affecting the industry this year. The marketing hype has shifted from virtualisation to 5G and IoT. VoLTE has proved much more difficult to implement (dare I say retrofit) to LTE and this is holding back LTE only deployment. SON is slowly gaining acceptance and deployment. More LTE spectrum has been lit up outdoors, where lower frequencies have improved coverage including in-building penetration while higher 2.6GHz bands have added substantial. But this has its limits, such as inside larger high-rise buildings or once all new spectrum has been exhausted.
The cellular industry should be proud of achieving high average data rates with LTE, which have dramatically increased over the last couple of years. The chart below compares progress against Wi-Fi as experienced by smartphones. I suspect Wi-Fi speeds have been hampered by congestion (average 10-15 devices per access point isn't unusual) and limited backhaul (residential and public use broadband).
Looking back at 2016
Reviewing my predictions from a year ago:
- Enterprise sector will dominate growth.
While small cell volumes remain highest in the residential sector, with millions still being shipped annually, there have been few new residential deployments. Growth by numbers is in the Enterprise sector, although perhaps the greatest revenue comes from urban segment (where some vendors classify anything other than a macrocell as a small cell).
- Neutral host business models will become accepted
Many operators I speak with are open to connecting Enterprise Small Cells, especially if they don’t have to fund equipment or installation. But there remains much conservatism about delegating authority to trusted third parties, and too little being done to establish a process or certification scheme to become an approved installer. In future, the availability of more spectrum choice (CBRS, FirstNet, MulteFire etc.) will increase pressure to
- Municipalities will make progress with their “smart city” strategies, incorporating plans for Small Cells
We have seen some progress here, using a variety of technologies. More planning/permit applications are being made for equipment installation. Volumes are in the hundreds, rather than thousands of small cell sites per city. Clearer regulations about the physical format are becoming established, such as in New York where they’re looking at a single shroud hosting two small cells per lightpole.
- LAA standards will be published, trials will continue, but mass adoption is still some time off.
True. LAA demos were shown at Mobile World Congress in February, with the 3GPP formal specifications approved mid-year. MulteFire specifications (which are evolved from LAA and eLAA) are due out Q1 2017. Commercial availability for all three will be gated by handset availability so still some 2-3 years off.
- Use of prioritised/shared spectrum at 3.5GHz will be important for the USA
The CBRS scheme has been approved by the FCC and is now available for use in several US cities. We saw standalone demos from Ruckus Wireless, SpiderCloud and Nokia in Sept/October. The centralised SAS databases have been extensively tested. We’ll need to see several trusted neutral hosts in place as well as compatible handsets for this to really take-off, but there is clearly some pent-up demand. Cable TV companies (MNOs) expressed interest, with CableLabs formally joining the CBRS Alliance.
- As VoLTE matures, LTE-only small cells start to become more relevant
VoLTE remains difficult to deploy with VoLTE roaming especially complex. Nonetheless, I’ve heard of one or two operators happy to deploy LTE only small cells. More will follow as and when their user base matures. In one case study we documented, the operator accelerated handset upgrades so that all users in the Enterprise had VoLTE capable devices.
- Wi-Fi will continue to be popular in the home and office, perhaps less so elsewhere. Wi-Gig (superfast 802.11ad Wi-Fi at 60GHz) will appear towards end of 2016 with the promise of Gigabit speeds in the same room.
Wi-Gig is available commercially is some broadband router products, but it will be 2017 before it’s commercially in high-end smartphones. Products are going through certification testing now. What’s more noticeable today is the degradation in Wi-Fi performance as we hook up ever more devices to each hotspot. Complaints about poor in-home performance have increased substantially (50% of all broadband issues with one wireline provider) while public Wi-Fi seems to be suffering and many users remaining on LTE due to better performance and lower prices.
Looking ahead at 2017
Operators appear to be still very conservative about enabling small cell deployments through trusted third party/neutral hosts. A change of mindset is required, and we are seeing some progress. This will accelerate once a few start to gain competitive advantage from effectively free or heavily cost reduced RAN equipment inbuilding.
New technologies, such as CBRS and MulteFire, help because they don’t directly interfere with existing licenced spectrum. These will need new handsets and good VoLTE roaming to become mainstream. Existing spectrum and handsets can be used today, even shared, should operators be willing to permit it. In the medium term, demand will remain for multi-mode (3G/LTE) Enterprise small cells.
My headline predictions for 2017 aren’t radically different from this past year, but I’m hopeful we will see more visible evidence of progress.
- Enterprise sector will continue to dominate growth.
- Several neutral host organisations will be approved to manage enterprise small cell deployments and operation
- Municipalities will clarify the permitted format and planning rules for Small Cells
- The first CBRS deployments will go live in the USA
- Several more operators will focus on LTE only Enterprise Small Cells, enabled by VoLTE
- Wi-Fi performance will become a growing concern, especially in public areas which haven’t be professionally designed/maintained or are backhaul limited. We’ll see growing reliance/migration to LTE instead, especially when outdoors/away from home/office.
Have you got any other/different predictions for the year ahead? Have I missed anything?
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