Today, there is almost no mention of the consumer segment in terms of femtocells. In part, this is because this part of the market is more mature, with over 40 operators worldwide offering femtocells to consumers. However, this has yet to really ignite in the way that was predicted when the event started. Consumer femtocells shipped over 2 million units in 2012 and while individual operators such as AT&T and Vodafone have had noted success, other such as NTT DoCoMo have failed to find the right model for this segment and actually withdrew its 3G femto from service. It is now having another crack with a 4G femtocell offering for consumers as an incentive to migrate users to LTE, but success is far from guaranteed and it remains to be seen whether this type of service will ever see rapid adoption. Notably, the Small Cell Forum--formerly the Femtocell Forum-- has embraced the broader movement towards denser cell coverage in public mobile networks and enterprise segments as well as in consumer markets.
So it is perhaps no surprise that the industry has turned its attention to the enterprise segment, one which has less price-sensitive customers with higher demands for coverage, capacity and sophisticated mobile services. Enterprise small cells are much more in evidence, such as ip.access' nanoCell, which can be deployed in conjunction with Distributed Antenna Systems (DAS) in enterprise environments, and many vendors now focus on how to position small cells to penetrate this high-value segment. This is the new hot segment, opening up a rich service portfolio to offer to enterprise customers, a market that has been a tough nut to crack for mobile operators.
Small Cell Forum blueprint for enterprise deployment acceleration
One of the recent big announcements from the Small Cell Forum was early details of Release Two, its plan to accelerate enterprise small cell deployments, which will be published in December 2013. These plans highlight the massive opportunities for operators to add significant value to their deployments through new services, as well as pinpointing the challenges and how they can be overcome. The Forum defines the enterprise space as generally indoor, premises-based and primarily driven by coverage but also including specific services and analytics. Market segments within enterprise include; small business/SOHO, medium enterprises/mid-sized office buildings, large enterprises/corporate campuses, multi-dwelling units, retail shops, shopping malls, medical facilities/hospitals, government/municipal buildings, hotel and underground facilities.
Combining enterprise small cells with network-based management applications potentially enables operators to add significant value to this segment by bringing new mobile services and features. These could include dedicated voice capacity, mobile unified communications, mobile call recording, local switching of voice traffic and context aware services, as well as the fast-developing field of network analytics.
However, there are also several key enterprise challenges that are significantly more complex than those found when offering femtocell services to consumers, such as managing inter-cell interactions, delivering consistent coverage over larger areas than a home or SOHO, as well as typically needing to support increased user numbers with higher user mobility. All of which means that as small cells become part of mobile operator strategies, there is a rising need for common guidelines and best practice, for products and deployment and Release Two provides an "all you need to know" guide to help operators deploy enterprise small cells. This follows on from Release One, a similar exercise centered on consumer femtocells, unveiled in February at Mobile World Congress. Release Three focuses on urban small cells and is scheduled for release at Mobile World Congress 2014.
Infonetics believes that deploying small cells within the enterprise segment represents a huge opportunity for mobile operators for several reasons:
- the mobile operator has the opportunity to increase indoor coverage within an enterprise campus, both indoors and outdoors;
- enterprise IT architects are seeking to move all personal communications services on to mobile devices and "unwire" their organizations, particularly as employers increasingly have BYOD policies;
- as they do so, there is a need to "mobilize" some of their existing communication services such as IP PBX, Centrex, IP VPN etc.; this also takes away the emphasis on "buying small cells" and places it on "improving/mobilizing communications" as the cost of those cells can be bundled with those services
- in deploying infrastructure within the enterprise premises, the operator has the chance to place "golden handcuffs" on the enterprise and pull them into an extended length of contract; one might argue that BYOD means that there is a need to support multiple mobile operators not just one selected by the enterprise, but in reality if one operator offers to provide small cell coverage, there is usually a positive migration to that network by employees (even if it is a case of BYO SIM);
- IT budgets are shrinking and there is increasing pressure on enterprises to outsource communications as they don't have the staff to deal with the complexity and rate of change, so there is the potential for operators to take on network operations for their high value customers
However, to date the enterprise has largely proven hard to target effectively. Traditionally this market segment has been underserved, as options such as DAS have only been available to larger scale enterprises due to the considerable costs involved. There are specific challenges of using DAS, which require a room in which to deploy a macro/pico BTS, and then the installation of industrial-grade coax to pipe the signal around the building, and sometimes requires an upgrade to the building's power. This is often invasive, expensive and time-consuming.
There is a "DAS gap" in the market, with DAS only being viable for organizations with over 1,000 employees, but now, small cells give operators a weapon with which they can attack a segment which had previously been difficult to penetrate--enterprises with under 250 employees. However, although some operators (Sprint in the United States and Orange in France, for example) have made progress in this segment, success requires more than just offering an enterprise-class small cell.
This is where Release Two really helps as it includes detailed information on key areas such as market drivers, business case, security, radio technology, interference issues, standards, regulatory issues and a profile of recommended equipment interoperability for use in RFPs, which should help operators deliver a platform for advanced business applications and network analytics, and so take the proposition beyond just improving coverage and capacity.
Richard Webb is Directing Analyst for Microwave and Carrier Wi-Fi at Infonetics Research. He is a frequent speaker on microwave, millimeter wave, mobile backhaul, small cells and carrier WiFi at global events and advises carriers, vendors and the investment community on new market opportunities. Twitter: @richardawebb