Paolini: Small cells or Wi-Fi offload?

By Monica Paolini, Senza Fili Consulting

Monica Paolini

The answer to this question is easy: We need both small cells and Wi-Fi to fit all the traffic generated by smartphone, tablets and laptops.

Historically, the increase in wireless capacity has mostly come from increased cell density. Over the last 45 years, greater cell density accounted for a 1,600-fold increase in capacity, according to Martin Cooper, who led the Motorola team that developed the mobile phone in the 70s. The increase in cell density was mostly aimed at achieving coverage across the footprint.

Source: Senza Fili. Survey sponsored by Radisys.

Today the challenge is different. Mobile networks cover most of the places where humans live, work, or travel. The need is to increase cell density where coverage is already provided by the macro cells. Technological advances and new spectrum allocations will definitely help to improve capacity, but alone they are not sufficient to address the 18-fold traffic increase over the next five years predicted by Cisco's VNI. According to Alcatel, increase in cell density will have five times the impact of new spectrum allocation or improvements in spectral efficiency from new technologies such as LTE.

And small cells and Wi-Fi will play a central role to this increase in capacity, because it is no longer possible to expand capacity by increasing macro-cell density, as it was in the past, because in areas with high traffic we are at saturation. More cells would create further interference and the marginal capacity gains from new cells would be too low to justify their deployment.

Different solutions, different strategies

But where do operators plan to deploy small cells and Wi-Fi? While both solutions increase capacity, they do so in different ways. The table below compares the two solutions and the challenges they pose to mobile operators.

Wi-Fi offload

Small cells

Already deployed, but being expanded

A few deployments launched, major deployments in two to three years

Mostly indoors

Mostly outdoors

Residential offload is major benefit

Focus on high-traffic urban areas

Operators benefit even without building own hotspot network

Femto cells offer additional offload potential where the home/office or the device has no Wi-Fi  


QoS tiered services can be implemented


--Transparent access to subscribers

--Introduction of hotspot 2.0 / Passpoint with SIM-based authentication to improve user experience

--Integration of Wi-Fi traffic management within the cellular network


--Network coordination and interference management with macro network

--Selection of backhaul that is affordable and meets performance requirements

--Site acquisition and lease agreements

Source: Senza Fili

Wi-Fi offload has been around for a long time. While the way it is implemented is developing to support better support for mobile subscribers (e.g., with the roaming framework or SIM-based authentication from Passpoint and Hotspot 2.0), it is a mature solution that operators understand well and have largely deployed already. As it uses license-exempt spectrum that mobile operators cannot control, Wi-Fi offload will necessarily remain a complementary tool that will not replace mobile networks or that will not have any performance guarantee, but it can play a huge role because it has a low cost-per-bit and sufficient spectrum to support high throughput rates to subscribers.

For Wi-Fi offload, most of the attention--as well as the costs and challenges for mobile operators--comes from public hotspots, which tend to be in those areas where mobile networks are at capacity. But it is residential Wi-Fi offload that is shifting most of the Wi-Fi traffic away from mobile networks. And for operators this is highly valuable because residential usage which has a clear peak in evening hours cannot be inexpensively accomodated by increase in macro cells. While in most residential areas it would be possible to increase macro cell density (unlike in dense urban areas), it would be expensive and inefficient to do so. Wi-Fi residential networks require no additional expenditure for the operator (no capex, no backhaul, power or maintenance costs), and virtually all devices support it.

Small cells offer a completmentary solution to Wi-Fi when deployed in public areas (we are not talking about femto cells here, which are a small cell solution which competes with residential Wi-Fi offload, but we think it will remain a niche solution because of the ubiquity and simplicity of Wi-Fi). Operators control the spectrum that small cells use, manage their traffic, and decide where to install them. They are fully integrated within the mobile network, but also they often use the same spectrum channels as the macro cells, thus requiring coordination between the macro- and small-cell layers to mitigate the impact of interference.

Because they are a new solution that requires new RAN and backhaul equipment, new deployment and business models, and advanced traffic and intererference managment tools, the adoption of small cells is still in a very early phase. Most operators are still evaluating small cells in trials. Existing small-cell deployments are still limited in size as operators try to first address areas where they face the most severe congestion levers and, at the same time, develop their strategy for larger deployments.

Also the immediate need for small cells is limited if an operator is only planning for LTE networks. LTE networks still have a lower network utilization than 3G networks because they have been launched recently and still have fewer subscribers. In this context, small cells are not needed. Increasingly, however, operators are reconsidering 3G small cells, because they can address the immediate capacity need--which is nearly all stemming from 3G traffic. This is an approach that not only relieves network congestion in the short term, but it also gives operators an installed small-cell network to which LTE can be added when needed as an additional module--and hence at an affordable cost. 

No need to choose?

A clear pattern is emerging in which Wi-Fi dominates today, with small cells bringing a larger contribution with time, and with Wi-Fi remaining the dominant offload technology in the home, and small cells and Wi-Fi used in dense metropolitan areas, with Wi-Fi more frequently deployed indoors and small cells outdoors.

Yet, operators do not need to choose between Wi-Fi offload and small cells in public areas. The marginal cost of adding Wi-Fi to a small cell, or a small cell to a Wi-Fi access point is very low. Most of the cost of deploying either a Wi-Fi access point or a small cell is not the equipment, but the installation (RF planning, site selection, permitting, installation). So the costs of adding a new wireless interface is very low as a percentage of the overall deployment costs, if the new interface is housed together with the one initially used. So a Wi-Fi access point may accomodate a 3G module today and eventually an LTE module as well. And a small cell can include Wi-Fi support – and most eqiupments vendors now offer Wi-Fi built-in modules.

Monica Paolini, PhD, is the founder and president of Senza Fili Consulting and can be contacted at [email protected]. Senza Fili Consulting is an analyst and consulting firm that provides advisory services on wireless data technologies and services.