Small cells will generate 9% of mobile RAN revenues in 2016

LTE deployments and the growing use of small cells are key drivers for the continued growth of the worldwide mobile radio access network equipment market over the next five years, according to the Dell'Oro Group.

The market for LTE RAN equipment is continuing its climb upward, with growth predicted at compound annual growth rate (CAGR) of more than 50 percent over the next five years, said Dell'Oro.

"The success with early adopters in North America, Japan, and South Korea is driving operators around the world to commit to LTE and reap the benefits of improved efficiencies, latencies, throughputs and to ensure a future-proof roadmap," said Stefan Pongratz, Dell'Oro analyst. "It has been only 18 months since the first large scale commercial deployment of LTE, and it is already generating more than 15 percent of total RAN revenues."

The total mobile RAN market, including macro and public-access small cells, is expected to grow at a CAGR of two percent between 2011 and 2016. The public-access small cell market is expected to generate significant revenues in the outer years of the forecast period and account for 9 percent of all RAN revenues in 2016, said Dell'Oro.

Vendors expected to benefit from mobile RAN market growth include Ericsson (NASDAQ:ERIC), Nokia Siemens, Huawei and Alcatel-Lucent (NASDAQ: ALU).

A related study announced by Amdocs confirms that operators expect to embark on massive deployments of small cells to increase network capacity and coverage.

Amdocs said the study, conducted by Rethink Technology Research, found that 59 percent of service providers expect to deploy at least 10 times more small cells by 2017 than in 2011. Half of the service providers surveyed expect to increase capex by 10-20 percent between 2012 and 2017 and 23 percent plan to increase it by more. None expects to reduce capex during the period.

The study also revealed that 88 percent of service providers expect to offer Wi-Fi as part of their mobile services by 2016, with 22 percent anticipating they will have Wi-Fi integrated into at least half of their cell sites by the end of 2017 in order to relieve the data burden on their 3G and LTE networks. Rethink's survey covered a global sample of over 65 mobile and converged Tier 1 and Tier 2 service providers.

The need for the higher mobile network speeds and capacity was highlighted in a separate study from Keynote Competitive Research, which found that customers are clamoring for faster mobile Web experiences. The research, which has implications for both website owners and mobile operators, revealed that 60 percent of survey respondents anticipate a website download time of fewer than three second on tablet devices.

Further, 64 percent of respondents expect a mobile website to load in less than four seconds on smartphones, and 82 percent want a mobile site to load within five seconds on smartphones.

When asked about frustrating mobile Web experiences over the past two months, two-thirds of smartphone users cited web pages that were slow to load, said Keynote, adding, "The next largest pain point felt by nearly half of the panel was 'website not optimized for smartphone.'"

Keynote's survey included 5,388 panelists, of which 3,145 were smartphone users and 1,976 were tablet users.

For more:
- see this Dell'Oro release
- see this Keynote release
- see this Amdocs release

Related articles:
Sprint embraces Alcatel-Lucent's lightRadio network gear
Analyst: Small cells benefit 3G networks more than LTE
ABI: Mobile data traffic growth to plummet below 50% after 2015
Madden: Satisfying the demand for mobile data
Small cells, DAS and Wi-Fi aren't universally loved

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