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. Progress in each of the main four sectors of small cells has been quite different. There has been much hype and distraction from 5G alongside much promise for 2018 from CBRS. Equipment vendors are under more financial pressure, both large and small, and we've seen several acquisitions. The larger vendors have all become more visible with Small Cell solutions. Business and regulatory issues have set the pace rather than technology development alone.
My overall view is that last year’s predictions were generally correct and in the right direction but progress towards them has been slow and steady. This often seems to be the case with Small Cell forecasts.
Looking back at 2017
The residential femtocell business looks to have peaked, with one or two prominent exceptions. Cisco’s withdrawal from the market hasn’t caused too much pain (they had relatively little market share) but was indicative of the low growth opportunity. Vodafone is withdrawing SureSignal from several markets although existing customers will continue to be supported. It seems that the quality of service achieved through 4G at low frequencies is thought to be adequate, supplemented in some cases by Wi-Fi Calling.
One exception is found in France, where Free continue to ship millions of Femtocells (embedded into every set-top box), and is ready to launch in Italy having acquired spectrum and some macrocell sites from both Three and WIND. Sprint, the pioneer of Femtocells in the US, has had such great success with their MagicBox, an LTE relay (incorporating an LTE receiver and a small cell), that they can’t make enough of them to satisfy demand.
In the Enterprise sector, we are still awaiting a breakthrough regarding operator mindset. Despite the difficulties of serving modern buildings with high RF isolation, we heard that many operators insist on replicating their full range of spectrum and technology options as used outside. This ramps up the cost considerably and even where building owners pay for the full cost of a DAS system there is no guarantee that all operators will connect to it.
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. CBRS has made great progress this year and holds great promise for 2018, dependent on regulatory approval, operator participation (on a roaming basis), certification procedures and device support. There are at least 40 CBRS small cell products on the market today, so no shortage of competition. Definitely the one to watch for 2018.
Urban small cells have struggled to make progress this year, particularly due to logistics and town planning/zoning constraints, but are slowly appearing. There’s also some doubt in operator’s minds about the business case of street based deployments, where the small footprint limits scope. Those with more spectrum continue to prefer expanding macrocell and rooftop sites, especially with higher order MIMO. Our case study of the City of London shows how a shared deployment can be very flexible and cost-effective. Regulatory changes at national level could have a significant impact next year.
Rural and remote small cells have had a fairly quiet year. Another case study we made this year from several sites in rural Wales showed various technical options. These transform the lifestyle in areas previously unserved – they aren’t looking for peak performance found in central urban areas, just adequate broadband. There remains much opportunity to improve coverage in developing countries, where Parallel Wireless believe their low cost 2G/4G platform provides an ideal mix to serve very low cost featurephones alongside smartphones.
Reviewing predications for 2017
My headline predictions for 2017 have all made some progress, perhaps not as much as I’d anticipated.
1) Enterprise sector will continue to dominate growth.
Generally true and the main sector of small cells to see growth
2) Several neutral host organisations will be approved to manage enterprise small cell deployments and operation
Some big names have become more involved but marketing remains pretty low key for now. I don’t yet see much advertising or promotion to Enterprise vertical sectors on how to address poor cellular service. Maybe everyone is waiting for CBRS?
3) Municipalities will clarify the permitted format and planning rules for Small Cells
We’ve seen some bold pronouncements, especially in local cities in the US, and as a result the FCC is acting to address that. They’re not all positive though. In California, the state governor vetoed a bill to streamline small cell rollout and the mayor of San Jose ransomed every street pole for maximum revenue.
4) The first CBRS deployments will go live in the USA
At this stage, just trials, including some larger ones such as that by Charter Communications. Mostly outdoor at first. It will be mid 2018 before we see more widespread commercial rollouts. The CBRS Alliance seminar at MWC Americas provided a good snapshot of industry status.
5) Several more operators will focus on LTE only Enterprise Small Cells, enabled by VoLTE
Not really. It takes a lot to integrate and approve new vendors and new equipment. VoLTE has had relatively slow takeup worldwide overall. There have been few new LTE small cells approved to date. CBRS will change that indirectly.
6) Wi-Fi performance will become a growing concern, especially in public areas
Usage reports show that Wi-Fi away from home has dropped off worldwide, as more users stay on cellular where service is available. Larger data bundles encourage this, with over 90 operators providing unlimited bundles today. Residential and own office use may differ.
Looking ahead at 2018
The main areas of opportunity for small cells are again in the Enterprise and urban sectors which have quite different characteristics.
1) CBRS could become the poster child for small cell take-up, overcoming many of the regulatory and operator barriers to deployment. Much will depend on the attitudes of regulators, operators as to what service can be provided and how seamless this could be for end users. Many are looking on from other countries to see the outcome and may adopt similar schemes if it proves a success.
Expect to see CBRS become commercially launched, with Private LTE applications dominating indoors and major operators (both MNOs and Cable MSOs) deploying for outdoor use.
2) Growing pressure to improve the quality of service inbuilding should drive operators to approve and connect with lower cost solutions. A mix of DAS combined with Small Cell, including the distributed radio systems from Huawei and Ericsson, address the needs of larger buildings while standalone small cells continue to offer great value for smaller properties.
3) 5G will continue to have a high profile. Early commercial trials will provide fixed wireless service in the US and a few high profile sites in other countries. Otherwise, cellular service with small cells will predominantly be based on LTE.
Have you got any other/different predictions for the year ahead? Have I missed anything?
Why not add your thoughts with a comment below.
(You can even do so anonymously)
Meanwhile, season’s greetings to all our readers and we wish you a prosperous and successful 2018.