Wireless network planners are all too familiar with the challenges of outdoor small cells: Site acquisition, backhaul, power and interference can all be stumbling blocks. Vendors and integrators say that the equipment cost is typically less than 30% of a carrier’s total cost of ownership, and that permitting requirements can add yet another layer of expense.
“It’s the real estate issues and backhaul that kill the business model and deployment scenarios,” said analyst Greg Whelan of ACG Research. Carriers may find themselves dealing with multiple landowners just to cover one area.
Yet in some places, operators may have no choice but to look at small cells if they want to maintain their customer base. That’s the conclusion reached by analyst Joe Madden of Mobile Experts, who has developed a unique metric for predicting geographies that will see small cell deployments.
Gigabits per square kilometer per megahertz is Madden’s metric for forecasting small cell rollouts. He said that when an area surpasses 0.02 GkM, an operator needs to look at network densification.
“When you get above that threshold it’s time for small cells or Wi-Fi or DAS or something else, but it’s just too expensive to keep going with macro base stations,” said Madden. Seoul is the biggest proof point for Madden’s model; the city’s GkM is triple that of the most crowded Western cities, and Korean operators have been early adopters of small cells. Based on Madden’s analysis, New York will be the next major city to see significant small cell rollouts, followed by San Francisco.
In addition to the density per megahertz that Mobile Experts calculates, spectrum ownership can play a role in carrier decisions regarding small cells. New York is a good example; Verizon Wireless has said it will densify its network in cities in which it did not secure additional AWS spectrum in the most recent auction. New York is one such city.
Verizon is also proving Madden’s model in San Francisco. The carrier is trying to deploy 400 outdoor small cells in the City by the Bay this year.
Image source: Mobile Experts
