Ericsson, Nokia remain big in the small cell market

There was a time, not that long ago, when the expectations for small cells were sky high.

Dell’Oro Group VP Stefan Pongratz said he still remembers the look on people’s faces when his group said small cells would approach hundreds of thousands of units by 2015.

The consensus at the time was that the shift from macro to small cells would accelerate rather rapidly and also spur growth in the enterprise market, shaking up the vendor dynamics.

“With small cells accounting for just 2% to 3% of the RAN market in 2015, clearly the original vision did not materialize,” he told Fierce.

That said, small cells now account for around 10% of the total Radio Access Network (RAN) market and they’re an important part of the broader RAN toolkit, he added.

The research firm this week announced a recently published report, saying the demand for small cells remains strong. Preliminary findings from the first quarter suggest that small cell RAN revenues grew 15% year-over-year.

“The fact that small cell investments are still advancing at a rapid pace even as the operators are intensifying their 5G macro rollout efforts show that small cells are now an essential part of the broader RAN toolkit,” Pongratz said in a statement. “Helping to explain this output acceleration is the shift towards 5G and the shrinking gap between macro and small cell deployments, especially with upper mid-band 5G.”

Nearly all the small cell growth is driven by public 5G. Small cell LTE revenues declined in the quarter and private 5G small cell investments are still negligible. Global small cell RAN revenues remain on track to surpass $5 billion in 2022, the firm said.

When it comes to the small cell vendor landscape, the Top 5 – Huawei, Ericsson, Nokia, ZTE and Samsung – comprise more than 90% of the market, Pongratz told Fierce via email.

There’s a long list of smaller suppliers that see new segments/technologies – such as private wireless, fixed wireless access (FWA), Citizens Broadband Radio Service (CBRS), millimeter wave (mmWave) and enterprise open RAN – as an opportunity to change the status quo, he said. Some of the small cell suppliers in the “other” category include Airspan, Telrad, Altiostar, Fujitsu, NEC and Corning.

What is a small cell?

As for what constitutes a small cell, Dell’Oro Group addresses that by segmenting these products based on the RF output power, such that 10 W or less is considered a small cell. Essentially, all CBRS and mmWave solutions fall into the small cell category, he said, adding that dedicated FWA RAN solutions often fall into the small cell bucket as well.

“CBRS is not materially contributing to the growth but mmWave was 10% to 20% of the global small cell market in 2021,” Pongratz said.

Also helping to explain the robust demand for sub-6 GHz 5G New Radio (NR) small cells is the reduced gap between macros and indoor small cell deployments, especially in China, he noted. “Operators outside of China are still focusing more on the 5G macro network,” he said. However, “we do expect the role of small cells will evolve as the macro coverage improves.”

Back to the earlier vision for small cells. The expectation was small cells would proliferate rapidly in both public and enterprise settings, and the vendor landscape would change. “The reality is that we see some progress” with service provider-driven small cells and small cell revenues now in line with the expectations.

But small cells for private wireless/enterprise is coming in below expectations, and the same vendors that lead the macro market are also the small cell leaders.

“In other words, we are on track with public MBB small cells but lagging with private wireless and vendor shakeup,” he said.