by Tom Leddo
In September of 2013, I wrote a blog called “Small Cells, Small Cells, Small Cells” about all the buzz and conversations around small cells. In short, I was saying that there was still a lot of uncertainty about small cells and that it may be a few years before we know how it would all play out.
Eighteen months later, we know a whole lot more, but we still do not have a single, simplified model for small cell deployment. We do know that deployment costs are forcing our industry to temper our high hopes for 2015 and 2016 deployment volumes and also forcing us to really think outside of the box.
Simply put, the biggest factor is of course cost. While it is generally agreed that the various versions of small cells are much cheaper than a Distributive Antenna System (DAS) to deploy, the ROI on individual deployments has prevented the deployment levels we anticipated a couple of years ago.
Demand for coverage and capacity is high enough that some venue and large building owners are willing to help share the costs of DAS installations, particularly in the case of neutral hosts systems. But the economics on a model of this nature only work in stadiums, venues and buildings generally over one million square feet. While the demand for data is also beginning to get the attention of the owners of medium and small buildings, a viable single financial model has not yet evolved far enough to allow scale deployment to the levels we hoped.
Additionally, Wi-Fi calling and the combination of small cells with Wi-Fi are changing the landscape. Wi-Fi systems that can be self-deployed by the customer could be packaged with traditional LTE service to increase bandwidth, particularly in small buildings like restaurants that thrive on the buzz of social media.
So, stadiums, arenas and large buildings are covered by DAS and Wi-Fi systems. Residences, and small buildings are being covered through a combination of the traditional, macro network, personal “Femto” cells and Wi-Fi. The biggest challenge/opportunity seems to remain the medium sized buildings (bigger than a restaurant but less than 1 million square feet), the area we assumed would cause the small cell revolution. This is where creativity is needed to develop new economic models to fund deployment.
- Will operators begin to increase funding for large volumes of small cell deployments?
- Will independent third parties fund small cell deployments much like they currently do many traditional DAS networks?
- Will building owners fund deployments (or at least offset the cost)?
- Will tenants that rent office space in these middle ground buildings begin to self-deploy Wi-Fi and LTE small cells?
- Will OEMs seek new ways to finance design and installation costs to move their cool new systems from R&D to ceiling tiles??
- Will more creative approaches to deployment evolve?
The short answer is yes to all of the above!
To quote the English proverb, “Necessity is the mother of invention.” The exponential increase in the demand for data is driving the necessity for new creative deployment models. New models will be invented. I speculate that one or two of the best are yet to come and that no single one will be the silver bullet we all hoped for.
Or said another way, the HetNet will require a Heterogeneous Deployment model – HetDep!