Nokia Siemens CEO: Little revenue from small cells till after 2015

Large-scale rollouts of small cells in the United States will likely start next year, but Nokia Siemens Networks' CEO Rajeev Suri believes it will be a couple of years at least before sales of the diminutive base stations deliver sizable sales revenues.

Rajeev Suri

Rajeev Suri

"The reality is that small cells will come," said Suri, speaking at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston. "There has to be densification."

Mobile operators in the most advanced countries, such as the United States, Japan and South Korea, will deploy small cells first, just as they were first to market with LTE, said Suri.

Nonetheless, he does not think small cell sales will ramp up overnight. "Will it be a sizable part of the revenue of the market in the next two or three years? I don't think [so]. It's more beyond 2015 or so," he said.

"It's going to be there--later than most people expect, more hype than substance," said Suri.

The bottleneck for small cells is backhaul, he said, adding interference and security are also major issues that must be addressed.

Nonetheless, Suri said NSN--a joint venture of Nokia (NYSE:NOK) and Siemens--expects to make money in the small cell space because the devices constitute an incremental spend on top of LTE. "I don't think it will necessarily cannibalize the large macro base stations because you need both," he added.

Suri also addressed the topic of TD-LTE sales in China. He said China Mobile recently decided it will do a mix of 3G upgrades as well as greenfield TD-LTE deployments and will likely make vendor selections around the third quarter of this year for the 200,000 TD-LTE base stations it plans to deploy.

One major advantage for NSN is that it already has a 3G beachhead in China. "We are the only foreign vendor to have TD-SCDMA market share there. So we think we can benefit from their upgrade business as well as new TD-LTE business," said Suri.

"It's a large opportunity financially; we will go for it in good measure," he added. But he stressed NSN will not sacrifice profits for market share. "We will be aggressive but not at any cost."

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Related articles:
Report: Europe's vendors face delay on major Chinese TD-LTE tender
Ericsson confident of larger chunk of China TD-LTE business
AT&T will use small cells to strengthen VoLTE coverage
Verizon's Mead reiterates VoLTE launch for 2014, promises more LTE small cells
Madden: Cloud RAN or small cells?

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