When I talk with people about DAS and small cells, I hear the same old story: DAS is too expensive. DAS is dead. Let's check that old 8-track tape that people are playing, because it's getting out of date.
First of all, let's look at the breakdown of costs in a Distributed Antenna System. With a traditional fiber-and-coax DAS in a mid-sized airport, the total project can cost $2 million. Ouch. The average airport is generally unwilling to pay the $1.1 million for the DAS equipment and installation, and each operator will hesitate before committing $300,000 for the base stations in multiple bands and multiple sectors.
But there's more to the story now. New DAS systems are starting to emerge that change the economics. A new Dynamic DAS system uses Cat-5e or Cat-6a cables instead of more expensive coax. In addition, these cheap twisted-pair cables can be installed by a high school dropout, not by a licensed electrician that belongs to a union. Forget about conduit.
While the distribution system and installation get cheaper, we can also use small cells now instead of big base stations. Instead of a total cost of $300,000 for each operator's suite of base stations, we can install a multi-band small cell for each sector and the carriers can save 60-70 percent for their portion.
At the end of the day, the total project cost has dropped by half. The DAS equipment supplier will make about the same amount of money, but the project is quicker and cheaper to install with far less space required in the basement.
I'm not here to say that DAS solves every problem. Of course, in situations where a single mobile operator can address the building owner's needs, a small cell solution will be much cheaper, with better LAN integration and other features. But our research shows that more than 70 percent of the uncovered buildings in the world are "public" buildings, which means that the building owner requires multi-operator performance. Small cell vendors are starting to address the multi-operator question, but it's difficult to get multiple operators to agree on a common vendor so this is an uphill battle.
Watch for the DAS to take another interesting step over the next 3 years, asbegin to get more serious about the enterprise market. Today, it's hard for an enterprise to buy a DAS because they have to convince multiple operators to participate. Each mobile operator needs to supply a base station or a small cell and arrange for backhaul. This happens in big projects, but for smaller buildings the operators just don't have time to look at the issues.
Imagine a system where each mobile operator can use their preferred small cell vendor, but the small cells are packaged into a standard form factor defined by the DAS vendor. With this system, small cells could be quickly and easily plugged in as standard signal sources in a system that provides backhaul and power as needed. With this approach, the building owner and system integrator would have far less red tape, and would have "one throat to choke" if the project does not work as planned. Enterprise sales will grow quickly when this type of product comes together, because enterprises will see a clear path toward purchasing and installing something that is already baked.
This utopian future won't happen right away, because the mobile operators aren't ready to certify a small cell for somebody else to integrate. But the market is begging for this kind of solution, and nature abhors a vacuum. We see a few smart companies moving in this direction, so in a few years we will see massive growth in enterprise spending for mobile.
Joe Madden is Principal Analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provide market analysis on the mobile infrastructure and mobile handset markets. He provides market forecasts for handset, DAS, small cell, and base station markets, with in-depth research down to the nitty gritty details of frequency bands and power levels. Mr. Madden graduated, cum laude, from UCLA in 1989 and is a Silicon Valley veteran. He has survived IPOs, LBOs, divestitures, acquistions, and mergers during his 24 years in mobile communications.