Yankee Group: Is there a small market for small cells?

Jennifer Pigg

Jennifer Pigg

Small cells are starting to look like Token Ring. Or Beta Max. Or PBB-TE. What do these technologies have in common? They were all technically superior to the solutions that ultimately relegated them to oblivion.

I recently attended a combined small cell & Wi-Fi conference, chairing and speaking as part of the small cell track. The weight of attention (and warm bodies) given to the Wi-Fi side of the conference center served to underscore the trend Yankee Group has observed over the past year: Wi-Fi is getting the drop on small cell technology to the point where small cells are looking like a tactical point-solution and Wi-Fi looks like the trend.

Metropolitan small cells are owned, installed and operated by the carrier. They use licensed spectrum, also owned by the carrier. All of this theoretically guarantees excellent performance, availability and management of the overall cell network and user experience. However, small cell implementations have been hampered by the lack of a neutral host solution, which means that each MNO looking to operate an urban center must either cede the territory to the first comer or build out, at great time and expense, its own network potentially resulting in some ugly implementations. Wi-Fi, on the other hand, uses unlicensed spectrum, making it vulnerable to interference. However, it is on all of our mobile devices, and it is increasingly in all the indoors venues we roam to. Why, actually, do we need small cells?

Forty-six percent of total mobile data traffic will be offloaded in 2017.

Negroponte Was Right
In 2002 Nicholas Negroponte (Author of Being Digital & founder of the MIT Media Lab) envisioned a future in which Wi-Fi would be the dominant wireless infrastructure.  He commented in a Wired article: "In the future, each Wi-Fi system will also act like a small router, relaying to its nearest neighbors. Messages can hop peer-to-peer, leaping from lily to lily like frogs". 

Today we are witnessing the rapid rollout of Wi-Fi solutions to the full spectrum of indoor venues from retail establishments to sports arenas, hospitals and transportation hubs.  The advent of the Wi-Fi standard HotSpot 2.0, which allows for seamless Wi-Fi roaming, has moved Wi-Fi from a nomadic wireless solution to a truly mobile solution.

Traditional carriers and start ups are hurling themselves on the Wi-Fi services bandwagon and include AT&T, China Mobile, KDDI, Boingo, LodgeNet, Devicescape, iPass and Towerstream.   

The pace of Wi-Fi innovation by the vendors, deployment by the service providers and adoption by the end users is leaving the sober methodical roll-out of urban small-cells in the dust. We now question whether it will ever catch up.

Jennifer Pigg is a vice president of research on Yankee Group's Mobile Broadband team. 

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