There’s “no end in sight” to growth in the small cell market, according to research firm Mobile Experts, which predicted in a new report that revenue from global small cell equipment sales will double to $5.7 billion by 2023.
"While residential femtocell unit shipment declined in 2017, indoor and outdoor small cell carrier deployments drove the overall market growth,” Mobile Experts analyst Kyung Mun said in a release from the firm. Mobile Experts predicts small cell volume will grow at a 21% compound annual growth rate through 2023. “All the market trends that we're seeing bode extremely well for the ecosystem suppliers as carrier units yield higher margin and higher ASP than residential units.”
The firm said that carriers like China Mobile, Verizon and AT&T are driving demand in the space as they work to densify and improve their networks through the deployment of small cells. Indeed, the FCC estimated that up to 80% of future wireless network deployments in the United States—whether it’s 5G or densification for 4G—are going to be small cells.
That, naturally, raises the question: Which vendors are cashing in on small cell growth?
“Although I can’t give out specific market share information for each vendor, I can state that the top RAN vendors including Ericsson, Huawei, Nokia and ZTE, as a group, have been growing market share in terms of small cell equipment revenue,” Mobile Experts’ Mun wrote in response to questions from FierceWireless on the topic. “The group has increased market share to almost 70% in 2017, a significant jump from 60% share in 2016. The growth is not confined just to the top vendors who are able to leverage their extensive macro footprints to help their small cell businesses. Some smaller vendors like Airspan, with its ‘wireless’ UE Relay small cell, have also been able to find niche in carrier indoor deployments and grow share.”
Mun added that a range of factors are driving carriers to deploy small cells. He said operators’ push to 5G, which includes deployments in millimeter-wave spectrum, is in part helping drive interest in small cells, particularly given that millimeter-wave spectrum transmissions generally don’t travel as far as transmissions in lower spectrum bands and therefore could rely on the smaller coverage footprints supported by small cells. Mun also said the development of LAA technology—which essentially transmits LTE signals in unlicensed spectrum—is also generating interest among operators for small cell deployments. And the pending release of 3.5 GHz CBRS spectrum could also pave the way for additional small cell deployments as operators and other entities use the spectrum to provide better wireless coverage indoors.
The U.S. government is also working to help drive the deployment of small cells nationwide. Specifically, the FCC voted last month to clarify the treatment of small cells so they’re not treated the same as macro cells—a move the agency said would loosen regulations around the rollout of small cells and speed up carriers’ deployments.