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Joe Madden |
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.
How about a more useful metric? Mobile Experts tracks the number of radio transceivers deployed, as well as the bandwidth/capacity of various types of infrastructure. Our view of the market is different than the industry hype. In our view, with the rise of Carrier Aggregation and multi-band small cells, the number of radio bands covered will increase quickly in metrocells and indoor carrier femtocells. We expect more than 5 million carrier-grade small cells to ship in 2017, and each one will have an average of 2.2 licensed frequency bands built in. In addition, more than half of 2017 small cells will include two Wi-Fi bands. Multi-mode operation (HSPA, LTE, and Wi-Fi running simultaneously) will be standard. In this way, we see a major shift taking place, from "femtocells" (used for coverage) to "small cells" (tailored for capacity).
The new breed of carrier-grade small cell will carry more capacity than each single-band macro sector. With the combination of multiple licensed bands and Wi-Fi, operators will be able to create a HetNet which can scale up to huge levels of capacity. The Mobile Experts forecast predicts that, in 2016 and 2017, there will be more capacity deployed through small cells (femtos, picos, metros, etc) than through macrocells.
Let's take a look at transceiver count as a rough proxy for how much bandwidth is deployed in each type of equipment.
We will need all this new capacity! By the 2016 timeframe, in many countries the macro LTE network will be fully deployed in one or two bands, spectrum regulators will be moving like tortoises to allocate new bands, and the data tsunami will require immediate action.
Some operators have already seen this vision of the future, and have started to invest. In 2012, 30 percent of data to/from mobile devices was passed through private Wi-Fi networks, and 3 percent used a Carrier Wi-Fi network. The impact of private Wi-Fi cannot be understated...if mobile operators were compelled to roll out 30 percent more macro capacity with great coverage in homes and offices, the mobile operator business model would have collapsed last year.
This year, Carrier Wi-Fi will carry four times as much traffic as in 2012. With three million access points in China, and huge numbers in Japan, Korea, and other Asian countries, carrier Wi-Fi will be the primary internet access mode for huge numbers of people. Over time, Mobile Experts predicts that Wi-Fi spectrum will also be stretched, and 802.11ad adoption (at 60 GHz) may become a very important part of increasing capacity.
Meanwhile, during 2013 small cells will start to grow in a new direction. There are already more than 100,000 public small cells deployed in Asia. Most of the early units have limited capacity, and still fall into the "femtocell" category in terms of capability. But they have proven the viability of the femto gateway network topology, and the next step is to ramp it up. New carrier-grade small cells based on multi-core SoCs will ramp up this year with significant 3G and LTE capacity. By 2017, we expect the combination of all types of small cells and Wi-Fi will carry more capacity than the entire global macro network.
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.