Femtocell Opinion, comment and reviews

Verizon Wireless to deploy small cells, already short of LTE spectrum

logo_vzwVerizon Wireless, the large US cellular network with over 100 million subscribers, filed a request for additional spectrum from the FAA. The 299 page submission explains how they are already planning for small cells, but argues for additional spectrum to meet demand and suggests that small cells can't alone provide the capacity required. Is this true?

An aggressive LTE rollout

Verizon has invested heavily in its LTE deployment. The lower frequencies it uses at 700MHz provide longer range and better in-building penetration, meaning that initial coverage can be achieved with fewer cellsites. Over 200 million (out of 311 million total US population) are already covered by LTE, and the network is planned to match 3G coverage nationwide by the end of 2013.

Their LTE service is not only targetted at existing 3G smartphone users. They'll slap an LTE on the outside of your home to replace slower DSL wireline service too, although the same data pricing applies. And Apple's latest iPad 3 announced in San Francisco today is reported to support the super fast LTE technology too, with plain-clothes undercover Verizon employees installing LTE in Apple stores prior to the launch.

Next Steps

As more customers take up the service and usage grows, Verizon will need to add further capacity to meet demand. My guess is that they have several choices on how to do that, such as:

a) Increase capacity at existing sites, expanding each to be multi-sector rather than single sector; adding equipment to use all available frequencies; upgrading to the latest standards such as LTE-Advanced; making best use of proprietary features such as Self-Optimising Networks to tune the system to best advantage.

b) Buy more spectrum for use at existing LTE sites. Similar to (a) above, but requires legal access to extra frequencies and installing more kit. This is what the current FAA submission is all about.

c) Upgrade more 3G cellsites to have LTE as well. The longer range of LTE means that initial coverage can be achieved from fewer cellsites, so this would make use of existing locations to expand capacity.

d) Add new LTE small cells in specific areas (indoor and outdoor) with high traffic capacity that can't be served from existing sites.

e) "Refarm" existing 2G/3G frequencies by reallocating their use for LTE, once enough of the customers have LTE capable devices to use it instead

These are not mutually exclusive and all options may be used to some extent at the same time at different stages of the migration. For example, Japan has turned off it's old PDH 2G system and has already reallocated the spectrum. Korean operators are actively deploying small cells. By comparison, Verizon is seeking more spectrum to solve the same problem. Meanwhile, AT&T has acquired Qualcomm's spectrum licenses for $1.93 billion, and has started indicating it will refarm its 2G 1900 MHz spectrum.

As always, the tradeoff between costs and capability are substantial – if you can get more spectrum for low cost, it might make it a lot cheaper to add capacity than install more cells. However, spectrum is limited and on its own won't give anything like the extra capacity required. Double the spectrum giving 2x capacity compares with 10x to 100x more capacity gain from high density small cell deployment.

Verizon makes the case for more LTE spectrum

There's a major battle for spectrum going on in the US between Verizon and T-Mobile. In a detailed submission to the FCC, Verizon argue that they must have more spectrum or their LTE network will run out of capacity as soon as the end of 2013. Verizon has cut a $3.9 Billion deal to buy spectrum from the Cable companies who no longer require it and this is being strongly appealed by T-Mobile as uncompetitive.

Wouldn't small cells solve the problem instead?

Fierce Wireless reported the submission, quoting Bill Stone, Executive Director of Network Strategy: "..as the technology becomes available and matures, Verizon Wireless will be deploying small cells aggressively to increase system capacity."

But he still doesn't believe that small cells will provide enough traffic capacity to handle the predicted growth, saying "While femtocells provide some congestion relief, they will never be able to meet the skyrocketing demand that I detailed above, because they offload only a small fraction of a sector's traffic,".

I don't agree with that view. While a 4 channel residential femtocell can't directly match the capacity of a 200+ channel macrocell today, there are now a wide range of small cells being marketed with much higher capacity. The idea is that many small cells are deployed across areas of high traffic demand and together deliver much greater total capacity. For example, we've seen examples where a couple of enterprise femtocells deployed inside high traffic corporate premises can treble the capacity of an existing outdoor macrocell.

It's also worth considering that the capacity of small cells is increasing all the time. 3G metrocells with 32 or 64 channel are already available and new LTE small cells are being introduced. To be fair, many are still in the trial stages rather than full commercial deployment, but will mature as LTE takeup increases worldwide.

And in the pipeline, we have several chipset vendors announcing astonishing capacity and capability which promise even more.

Summary

There isn't a single solution to the data capacity demand on wireless networks, and for sure more spectrum will be an important part of the mix. But rather than discounting small cells as making a small contribution, I'd argue that network operators need to incorporate these into their strategic plans sooner rather than later. In the long term, they will be handling the majority of traffic.

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Comments   

#1 Steven Glapa said: 
David -- nice piece. We see the same challenges arising throughout the mobile industry worldwide, so it's not surprising that Verizon is admitting now that they expect to see congestion relatively soon on their LTE deployment. If I may, I'd suggest you add another alternative to your "what can we do about this" list, namely carrier Wi-Fi. The cost per Mbps per square meter for a deployment of 802.11n gear to address high mobile Internet demand density in either indoor or outdoor public spaces is lower than LTE, ceteris paribus, so virtually all the world's mobile operators -- and many fixed-line carriers as well -- are pursuing Wi-Fi deployment in parallel with their licensed-spectr um initiatives. Some of these Wi-Fi programs are reaching unprecedented scale, for example KDDI's deployment throughout Tokyo, which is headed toward hundreds of thousands of nodes. -- Steven
0 Quote 2012-03-08 11:18
 
#2 Thomas Dolislager said: 
Small cells - including WiFi offload - are going to be the future of wireless. I expect that existing macrosites will become more important as small cell aggregation points than as signal propagation points. - Thomas
www.selltower.com
0 Quote 2012-03-13 21:27
 
#3 ThinkSmallCell said: 
@Steven: I have no doubt that Wi-Fi will form an important part of the solution. What seems more visible to me today is the distinction between private Wi-Fi (which has been extremely popular for some time) and that of public "carrier managed" Wi-Fi (which has perhaps only more recently been taken seriously by the mobile network operators). Although I still have some reservations about the fact that this is in unlicenced spectrum, and can be shared competitively by many hotspots, it is being adopted by some big players.
0 Quote 2012-03-19 22:53
 
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