Heterogeneous Networks (HetNets) composed of macro cells, distributed base stations, carrier Wi-Fi, and small cell base stations, represent the evolution of mobile wireless networks. After surveying numerous femto cell vendors, small cell SoC vendors, and carrier Wi-Fi vendors, Maravedis found that the small cell market is rapidly maturing. Our findings show that a number of technology options with the potential to meet operators' capex and opex requirements for future HetNets are on the horizon. The small cell market, in turn, will begin to expand in earnest in 2012, and reach up to $5 billion by 2014.
Wireless network vendors have developed two primary solutions to meet operators' need for licensed, carrier-grade small cell equipment. Major network vendors are offering macro cell derived pico cells. Tier-2 vendors (plus Alcatel-Lucent) are offering femto cell derived small cells (also known as carrier femto cells or carrier metro cells). Both technologies represent deployable small cell solutions for mobile network traffic. However, both carrier pico cells and carrier metro cells have trade-offs at this time:
- Macro derived pico cells are more expensive, larger format, and have higher power consumption than femto derived metro cells.
- SON support for macro derived pico cells as well as their deployment automation features parallel existing macro cells functionality.
- There is still a lack of clarity concerning whether interference can be adequately managed in automated femto derived metro cell deployments.
Femto cell vendors are, overall, the most mature in developing the automated deployment and operation features that small cell networks will require. Among Tier-1 network vendors, Alcatel-Lucent stands out through its sophisticated and evolved metro cell solution. We expect both pico cells and carrier metro cells to become fully proven, complete solutions in the short to medium term (1 to 2 years), while increasing SoC sophistication and cost effectiveness drives down costs for both types of solutions.
In addition, carrier Wi-Fi vendors adding 3G/4G capability to their products form a third option for operators. In our estimation, carrier Wi-Fi is a complementary technology to small cell technology, and could act as both stress-relief for mobile networks and as an insurance policy of sorts in case of delays to the 3G/4G small cell technologies. Entry of major new vendors, particularly Cisco, enabled by the convergence of carrier Wi-Fi and small cell technologies could also change market dynamics and give operators new choices among Tier-1 network vendors.
Who will provide the dominant technology for small cell deployments? A rapid take off of the LTE market and small cell deployments will tend to favour the metro cell and carrier Wi-Fi providers who network vendors may choose to acquire femto cell companies like ip.access or Ubiquisys that have positioned for takeoff with the carrier metro cell market. On the other hand, a slower take off of the LTE market will favour the Tier-1 incumbent vendors who have folded small cells into their mainstream product offers. Carrier Wi-Fi vendors are also growing quickly and have scored some impressive contract awards with Tier-1 carriers. If the femto cell vendors falter in their promise of hassle-free automated deployment, carrier Wi-Fi vendors could take over a substantial portion of the small cell market, leaving the Tier-1 vendors to provide the larger pico cell equipment.
For more information about the small cell market trends and forecasts, please download the report brochure at here.
Fernando Donoso is the 4Ggear Team Leader at research firm Maravedis Inc. Maravedis is a leading analyst firm focusing on 4G and broadband wireless technologies and markets.