Not so fast, small cell market.
A new small cell equipment report from Infonetics Research warns that despite a quickly growing market, the small cell space will be – well, small. Or at least, not big enough for all the companies who want a piece.
“In terms of units, yes, small cell numbers can be big, but don’t get too excited,” said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics. “There are a lot of seriousissues that need to be resolved, and some that cannot be resolved.”
The most pressing issues are backhaul (affordability and backhaul link quality) and inter-cell interference. In a heterogeneous network situation that is expected with later releases of the LTE network standard, cells of various sizes (picocells, microcells, femtocells and typical or macro cell sites) must appropriately hand off to one another while not interfering with the overlapping layers of coverage.
“Let’s say an operator has thousands of small cells; how do you manage that? How do you backhaul them? When we talk to carriers, backhaul is always the biggest issue. And then of course they have to get interference under control,” added Téral.
“Don’t get me wrong; there is no question that a small cell market exists and it is growing fast. But the volumes will not be high enough to support the number of vendors trying to get into the small cell space. There is no ‘El Dorado’ in small cells,” Téral said. “A vendor battle is looming and not everyone is going to win.”
Still, small cell numbers continue to look impressive. Infonetics expects the number of small cell units sold to grow nearly 40-fold from 2011 to 2016. That figure includes 3G microcells and picocells, LTE mini eNodeBs, and 3G and LTE public access femtocells.
A recent report by ABI Research showed similar glowing numbers for the small cell market.
Infonetics projects that global small cell revenue is projected to rise at a 73% compound annual growth rate during the same period. The Asia Pacific region dominates the small cell market and Infonetics expects that to continue for the next four years.
LTE femtocells are expected to become the main driver of small cell market growth, according to report co-author Richard Webb.
“Public access femtocells already make up more than 70% of all small cells shipped worldwide,” said Webb, who is directing analyst for microwave and mobile offload at Infonetics. “Deploying femtocells in public metro spaces could help mobile operators address the data offload challenge. As operators utilize LTE femtocells to complement coverage and capacity for LTE macro deployment, the 4G femtocell segment will take off, becoming the main growth engine of the small cell market by 2014. In the meantime, carrier WiFi will be a faster-growing solution for offload, as it is often less complex to deploy compared to cellular-based small cells.”