Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Small cells consist of femtocells, picocells and microcells. They are defined by what they aren’t – traditional macro cell networks. Small cells exist to improve data and/or voice coverage via throughput for users in a particular location, surrounding a particular event and subscribed to a particular carrier’s network. For the purposes of this article, small cells are inextricably linked to the acceptance of a particular design by the carrier who owns the right to operate at that spectrum frequency.
I was an early user of one of the first U.S.-deployed femtocells made by Samsung and deployed to several hundred thousand Sprint Nextel CDMA wireless customers. Like many products, getting the Airave registered was painful (if coverage was not available in Fraser, Colo., it should not be a surprise that GPS signals were also hard to obtain). Once registered, however, it worked like a charm. Five bars of coverage in rural Colorado – perfect for conference calls during the snow season (standing outside was not an option).
As an early adopter, however, several limitations of femtocells became evident. While we could drive away and maintain the call (e.g., a seamless hand-off), it was impossible to receive the excellent service in-call when entering the femtocell area (e.g., a seamless hand-on). Secondly, the process of registering a particular device and maintaining the list of authorized users was painful (this has since been fixed, but highlights the fact that small cells also can require a specific level of authorization).
Third, the commercialization of the product as a mass market alternative to macro cell coverage was almost impossible for even a marketing genius to develop. Everyone understood that home offices in basements needed a boost (even for Verizon Wireless), but no one was willing to create a product suite around it. So Sprint Nextel and others decided to give the $150 to $200 product away to customers who called customer service and could prove that they were in a poor coverage area. While Sprint Nextel and others tried many alternative pricing/marketing schemes, the concept of offering “free” anything and undertaking an equipment subsidy was too much (note: this was not the case when justifying business/enterprise grade small cells. Advancements in the home resulted from increased business penetration).
All of the limitations described above were evident before data usage began to crush carrier networks. Just when it appeared that small cells would be relegated to the trash heap along with ISDN and X.25, along comes LTE. As data demand grew, small cells exited awkward adolescence and entered adulthood. There is not a U.S.-based telecommunications company who is not thinking about the effects of a multi-layer, heterogeneous network on their 1-, 3- or 5-year business plans. Without the precipitous rise of data, the strategic spotlight would have landed on someone else.
Small cell engineering is hard for several reasons. First, it forces RF engineers to spend more time focusing on the relationship of large and small cell sites to each other. Gone are the days of “big stick” coverage and its variation of the first generation of distributed antenna systems (which used fiber to distribute signals across smaller radios). Interference has been used by the RF engineering department as an excuse, but as micro cells grow in power and quantity (and therefore begin to resemble in part or as a whole a macro cell), significant interference can occur. This is especially important if the customer is using a low-latency application and is in motion (e.g., FaceTime or video feature at the sporting venue).
Second, small cells require the engineering and the access (bandwidth procurement) departments to coordinate their plans more closely. One of the biggest hurdles in 2007 to femtocell adoption was broadband availability – if coverage was poor for voice services, there was a chance that a DSL or cable connection was not available. Fortunately, data footprints have increased significantly over the past five years. On the business front, Ethernet coverage has also enjoyed a significant rise. And, thanks to the establishment of Ethernet as a cell-site backhaul standard, the connectivity and network departments have a lot of recent experience working together. Street-by-street focus has long been the domain of the wired world, but has not been a core skill set (until now) of the RF engineering department.
Lastly, monitoring and maintenance of all of these smaller cells forces a change in the operations systems and databases for wireless carriers. In the past, arguing for millions of dollars to improve field operations work force management systems versus any customer-facing systems project was an uphill battle. But when wireless (but not Ethernet) coverage significantly degrades at Pepsi’s corporate headquarters in Plano, Texas, someone has to know what to do – quickly. Which device/vendor created the degradation, alternate solutions to provide a baseline level of service, which services will be fixed first and timelines for all of the above need to be communicated in an accurate and timely manner.
There are additional reasons to the three mentioned above (specifically costs, future-proofing and vendor integration if the small cell and the macro cell provider are different) but you get the point – the push from increased data demand does not necessarily equate to instant adoption of small cells or heterogeneous networks. There is an adoption curve, and tomorrow’s small cell solutions look a lot different from the Samsung Airave introduced five years ago.
Spectrum reclamation, data “cliffs” (defined as the difference between 15 megabit per second download speeds of LTE and 1.5 Mbps download speeds of 3G networks) and the quest for alternatives should wireless carriers not act quickly (Wi-Fi being a viable alternative for many in-building data applications but with the same hand-on/hand-off and interference issues described earlier) all force the small cell issue to the “top five” 2013 problem list. In their current form, small cells become a coverage “shield” to keep current customers happy, increase data usage and reduce churn. Is it possible, however, to turn this “shield” into a “sword?” Can the small cell transition turn into a company-wide transformation for one or more carriers?
One way to look at this issue is to ask “Where is Google investing?” One of their investments is in a company called Ubiquisys. Granted, they made this small investment in 2007 when their interest in acquiring spectrum was rising, and Ubiquisys has raised nearly $60 million since Google made their investment (Accel and Atlas Ventures have led each subsequent round). But, according to a reliable source, they remain very interested in the company.
Ubiquisys has gone one step further than other small cell solutions. While their roots are in voice and 3G coverage, they have shifted their focus to LTE networks and specifically to the incorporation of storage into future device specifications, creating what they call a “smart cell.” Rather than describing it in this column, the full brief can be found here. In full bloom, the smart cell begins to look like a searchable, indexed DVR with an extra bonus – a cell tower. Something to ponder as you sip your morning cup of coffee.