LAS VEGAS – Nokia’s CEO said the small cell market is taking off, and could grow into a $6.7 billion global opportunity by 2019.
“It’s now already a meaningful business for us,” Nokia’s Rajeev Suri told FierceWireless during the recent CTIA Super Mobility trade show here. “It’s growing very fast. Densification will happen. Small cells will be needed.”
Suri said he predicted in 2012 that the small cell market would take off in the second half of 2016, and he said that’s exactly what has happened. He said Nokia expects the industry-wide, global small cell market to grow to between $5.6 billion and $6.7 billion within the next three years, and he said Nokia is well positioned to take a large chunk out of that figure.
“And we’re working with carriers like Sprint; so we are the majority provider in that case,” he added.
Indeed, Sprint has said it is working will small cell deployment companies like Mobilitie and others to deploy small cells for its 2.5 GHz spectrum in urban areas across the country. But Sprint executives have acknowledged that the company’s small cell rollout has been hindered by siting, permitting and logistical issues, like obtaining backhaul for the gadgets.
“There a couple of issues,” agreed Nokia’s Suri. “Of course, siting. That’s not easy. Getting the permitting, that’s not easy in all circumstances. So we have to look at innovative solutions to overcome that. Backhaul can again be an issue. But again, there’s going to be a lot of fiber and backhaul, so I think that will go away. But site permitting is just very specific to the city or country you operate in.”
Suri also said Nokia’s position in the small cell industry was bolstered by the recent closing of its acquisition of Alcatel-Lucent. “With the acquisition of Alcatel-Lucent we have a comprehensive small cell portfolio,” he said. “They were better off on in the femto, which is the residential small cell. We were very good with the enterprise small cells. … So altogether now we have the full portfolio of small cells.”
Suri declined to break out Nokia’s revenues directly from small cells, but said the gadgets represent a major business opportunity for the company, alongside sales of equipment for 4.5G, public safety wireless networks, VoLTE and other opportunities. “It’s growing; it’s growing very fast. It’s meaningful. It justifies the R&D spend,” Suri said of small cells.
Although Suri remains upbeat on the small cell opportunity, some analysts have expressed concern over what they describe as sluggish rollouts in the United States. According to a recent estimate from MoffettNathanson, the total number of small nodes in operation in the U.S. currently stands at a mere 30,000. According to analysts, the situation is partly due to price: The total price of an average small cell is in the neighborhood of $35,000, although some can cost as much as $65,000. Prices continue to fall, but that will have to continue for vendors to be able to reach the $20,000 to $25,000 price point that may be necessary for widespread carrier rollouts.