Articles by Joe Madden
For the past five years, Mobile Experts has been the most conservative analyst firm in the femtocell and small cell market. That's why we were selected to track the market on behalf of the Small Cell Forum. We've predicted flat numbers for femtocells (nailed that one) and we've predicted steady growth in carrier-deployed small cells, which has been accurate through the end of 2013.
Recently I saw a comment from one of the major base station OEMs, saying that "Small cells are not cheaper than macro base stations." Hogwash. Look into the true costs of adding capacity to the network. Comparing LTE macro and indoor small cells, significant cost differences emerge:
During the past 18 months, a few Asian operators have deployed significant numbers of small cells. On the other side of the world, mobile operators are experimenting and deploying only small numbers of small cells. There are millions of LTE subscribers in North America, so why don't we have millions of small cells in the United States today? The difference comes down to density. LTE doesn't drive a need for small cells all by itself, and the sheer weight of data traffic does not require small cells.
Competition for SoCs in small cells is heating up. We've now finished the phase where a dozen companies contended for the small cell market. Some companies have been acquired, including Picochip, Design Art Networks, and Percello. Mindspeed will join this list soon, as a strategic buyer is currently looking to acquire their wireless business. Others have simply dropped out of sight. The remaining players fall into two categories.
Sometimes it's funny to watch the relationships between a network equipment vendor and their customer. In most areas of business, the customer is king. Not in mobile infrastructure. In our business, the OEM tells their customer what to do ... and the mobile operator has no choice. With 2G, 3G, and 4G in multiple bands, networks have become so complex that 3GPP standards are not enough.
Active Antenna Systems have been "in field trials" for almost 20 years in the mobile market, and each time the idea gets a little closer to commercial success. Back in the 1990s, companies such as Metawave, Arraycomm, Andrew and even Ericsson tested prototype antenna arrays with progressive customers such as Vodafone and AT&T. A few of these systems had limited commercial success (such as the Arraycomm technology in PHS and wireless local loop applications), but at that time the market decided that AAS technology was too expensive for the capacity benefits that were produced, and in fact a move from 3G to LTE has produced bigger capacity benefits at lower cost.
Intuitively, most people realize that Wi-Fi is cheaper than cellular communications. There are several reasons that Wi-Fi is inherently less expensive, ranging from the use of free spectrum to the balance of power in the supplier ecosystem. Mobile Experts has recently completed some studies which examine these factors in an analytical, quantitative way, including examinations of Macro Base Stations, Carrier Wi-Fi, Small Cells, and DAS.
It's funny to watch the industry hype machine at work. Every new idea that comes along is promoted as the "next big thing." In the case of Cloud RAN, we have seen several vendors promoting their trials and initial deployments, and we have all heard about the savings available in baseband pooling. Cloud RAN will make dense urban networks possible, and putting the baseband processing together will make LTE-Advanced features possible.
During the past three years, the number of femtocells shipped has outstripped the number of macro base stations. We've all seen this in the news, but it really doesn't mean very much. A macro eNodeB carries far more capacity than a femtocell. After all, a million base stations cover a billion people, while a million femtocells cover a few million people. And all of the femtocell startups know the painful truth: So far there has been no tectonic shift toward capital spending for small cells. In short, comparing sites makes femto vendors feel good but it's essentially meaningless.
Despite the strong demand for mobile data worldwide, the mobile infrastructure market has been depressing recently. Last year, there was a drop in the number of radio transceivers shipped compared to 2011, despite some bright spots with LTE deployment in Asia and North America. Prominent companies such as Alcatel-Lucent are bleeding money, and struggling to raise cash.