March 7, 2014

Why the Enterprise Should Care About Small Cells

Data demand in the mobile arena has skyrocketed and there is no slow down in sight. As mobile carriers continue to pour billions of dollars into their network infrastructures to ensure coverage and capacity, a category of network element called Small cells will become increasingly important and relevant in public spaces and the enterprise.  

To appreciate the enormity of past and future data consumption, Cisco's annual Visual Network Index for Mobile Data Traffic published in early February 2014, highlights the 2013 global mobile data demand and the company's forecast through 2018.  The report in a nutshell affirms what mobile carriers have been stating for some time.  That is, at some point, the existing spectrum won't keep up with the explosive mobile data growth brought on with smartphones and tablets. Selected contrasts are illustrated in the table:

Given the enormity of mobile data consumption, public and private WiFi hotspots have been the important workhorses in the mobile network data offload story.  To complement familiar WiFi elements, a new category is emerging called Small Cells.  Technically, what is a small cell?  Rather than a specific piece of hardware, it is an umbrella term for low-powered radio access nodes that operate in licensed spectrum and unlicensed carrier-grade Wi-Fi, with a range of 10 meters up to several kilometers. The term covers femtocells, picocells, microcells and metrocells and each applicability is a function of use case and power output (generally ranging from one watt to five watts). The following definitions and graphical applicability below are courtesy of the Small Cell Forum, an industry consortium.   
Femtocell: A low-power, short range, self-contained base station. Initially used to 
describe consumer units intended for residential homes. The term has expanded to encompass higher capacity units for enterprise, rural and metropolitan areas. Key attributes include IP backhaul, self-optimization, low power consumption and ease of deployment. 

Picocell: Typically used to describe low-power compact base stations, used in 
enterprise or public indoor areas, the term is sometimes used to encompass outdoor small cells as well. Some care is required in selecting the number and location of these cells for indoor use, although the self-optimizing features of newer picocells, borrowed from femtocell technology, reduce the amount of specialist knowledge required. 

Microcell: Typically used to describe an outdoor short-range base station designed to enhance coverage for both indoor and outdoor users where macro coverage is insufficient. Occasionally installed indoors to provide coverage and capacity in areas above the scope of a picocell. 

Metrocell: A recent term used to describe small cell technologies designed for high capacity metropolitan areas. Such devices are typically installed on building walls or street furniture (e.g. lampposts and CCTV poles). 

Small cells are still working through cost, adoption and deployment questions.  As such, they may not be in some markets for some time.  As small cells operate on licensed spectrum, deployment is at the discretion of the mobile carrier.  Small cells have the advantage of being relatively less capital intensive than a macrocell which also may have issues such as local right of way approvals, antenna siting, broadband backhaul processing, and specific installation expertise.  Small cells on the other hand do not have many of those issues.  That's not to say that the installation is as simple as plugging in a WiFi router as a mobile network element, there are the necessities such as network management, backhaul, back office integration and the site specific business case.  As such, small cells will continue to undergo field testing and piloting before mobile carriers fully deploy across their networks.     

Small Cell Vendors

On the other side, who are vendors with vested interest in mobile carriers' speedy small cell deployments?  For the most part, the incumbent mobile network infrastructure vendors are the natural choices. Vendors with small cell portfolios include NSN (Nokia Siemens Networks). Ericsson, Alcatel Lucent, Samsung, Cisco,  Huawei and ZTE.   However additional smaller players like SpiderCloud, Airspan, and ip acess are trying to gain market share. 

Naturally, many carriers continue to invest capital into their networks, modernizing to an all IP-based core and building out more spectrally efficient with faster LTE throughput and better latency.  Knowing the certainty of increasing data demand and the need to address capacity have put small cells as future mobile network elements.  Some mobile carriers are more aggressive than others as commitment entails a larger network strategy. In the U.S., AT&T has committed to implement 40,000 small cells by the end of 2015 as part of its 3 year, $14 billion Project Velocity IP network expansion effort. Although other carriers haven't been as public as AT&T in terms of a specific number commitment. Other mobile carriers who also have committed to the technology include Verizon Wireless & Sprint, Softbank, China Mobile, and Vodafone. 

While it stands to reason that small cells will serve the interests of mobile carriers, what opportunities are there in the enterprise?  The next TechNote in this two-part series will explore the Applicability of Small Cells in the Enterprise. 


William Ho is Principal Analyst at 556 Ventures. William has over 20 years experience in the telecom, internet and government markets. Previously, William was Vice President of Consumer and Small Business research at Current Analysis.

1 Comment

With Exabytes and Femtocells, here’s a reminder of exactly how many powers of ten each prefix indicates – both large and small. In general, large values tend to indicate precise usage (such a “six petabytes of storage”). In the IT world, the smaller prefixes are often used qualitatively (such as microcomputer, nanotechnology, and Femtocells).

Yotta 1024

Zetta 1021

Exa 1018

Peta 1015

Tera 1012

Giga 109

Mega 106

Kilo 103

Milli 10-3

Micro 10-6

Nano 10-9

Pico 10-12

Femto 10-15

Atto 10-18

Zepto 10-21

Yocto 10-24

Source: Wikipedia

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