Madden: Small cell focus has shifted from coverage to capacity

Joe Madden

Joe Madden

Femtocells had a bumpy start over the last four years, with delays and technical issues to resolve. Demand has been lower than many people expected. However, during the past 18 months, production has grown to millions of units, and a self-sustainable market has developed. A clear ecosystem exists today, with semiconductor suppliers, OEMs and ODMs supported by a core group of mobile network operators.

While the market started with consumer femtocells, focused on improving coverage, the central challenge for operators has changed.   Since 2007, the emphasis of the market has shifted from coverage enhancement  to capacity enhancement. Mobile data traffic demand nearly doubles every year, and the 3G infrastructure currently deployed has hit capacity limitations, especially in dense urban areas.  In the strategic plans of leading major network operators, handling dense data traffic loads has become more critical than voice coverage in every corner.

Different applications call for different products. And in this case, we will see a wide variety of small cells which lie along a continuum, ranging from autonomous consumer femtocells at one extreme to highly coordinated picocells at the other.   

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On the continuum of small cells, the term "femtocell" refers to an autonomous access point, which coordinates periodically with the macro network but operates independently, using "best effort" backhaul supplied by the end user. "Carrier femtocells" lie farther along the spectrum of possibilities, with a femto gateway network architecture and a great deal of autonomy, but with close control of location and carrier-grade backhaul by the network operators themselves. The term "picocell" refers to a low-power extension of the macro network. Some picocells will operate as independent Node B or eNode B network elements, but others will share baseband resources with the macro network for the ultimate in high-density mobile network performance.  

The performance requirements for each distinct solution require different semiconductors, backhaul options and software. In general, the "best effort" applications for consumers and small businesses will result in one grouping of semiconductor solutions, ODM assemblers and software developers which are oriented toward low cost. The "carrier grade" applications, including carrier femtocells and picocells, will be different in multiple ways:

  • The software running on carrier-grade small cells will often be an identical copy of the code used in macrocells from Tier One OEMs. By doing this, the operators will have the peace of mind that comes with years of qualifications, trials, and field deployment.
  •  To run the macro software, the processors used in carrier-grade small cells need to be developed with multi-core architectures, with hardware acceleration in some functions and a set of flexible DSP elements that are tailored to handle high levels of network coordination.
  • Backhaul supplied by end users will rarely meet the exacting standards of telecom operators. Most carrier-deployed small cells will use carrier-grade backhaul options such as fiber, microwave line-of-sight (LOS) radios, and a new class of non-line of sight (NLOS) radios.
  • The ruggedized hardware associated with outdoor small cells will be severely tested for environmental conditions. The resulting heavy-duty box will be very different than the low-cost consumer and enterprise femtocells which are deployed indoors.
  • Outdoor small cells will include higher power levels (bigger power amplifiers) and higher mobility requirements (higher accuracy in TCXOs), driving higher cost and even different technologies such as LDMOS or OCXO technologies to meet stricter requirements.
  • Small cells deployed by network operators will be expected to handle multiple air interface standards simultaneously. In some cases, multiple frequency bands and even Wi-Fi will also be included.
  • Overall, the functionality of a carrier-grade small cell will be much higher than a consumer device in terms of coordination with the network. Network operators will expect handoff statistics to match their macro network. Emergency location and lawful intercept functionality must be included. Of course, all network operator small cells will include open access and higher levels of capacity than private femtocells.

Source: Mobile Experts Semiconductors for Small Cells forecast

Overall, it's becoming clear that the market for small cells will become richer over the next five years. The broad diversity in applications, air interface standards, frequency bands, power levels, and other factors will result in a market which supports dozens of new products.  By 2016, Mobile Experts predicts that the number of "carrier grade" small cells may actually outnumber the "best effort" femtocells on the market, at 20x higher cost.  As a rough approximation, we see fairly linear growth in the "coverage" segment of the market while the "capacity" segment of the market will follow the accelerating growth in mobile data traffic.

Joe Madden is Principal Analyst at Mobile Experts, a market research firm.  You can contact Madden at [email protected].

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