In mid-July Nokia Siemens Networks invited me, along with several other analysts, to visit them in Chicago and spend a day looking at their work with small cells. In particular, NSN was interested in sharing their work with pico and microcells to be used in a metro environment. These small base stations can also be called metro cells.
Part of the day included visiting a metro cell deployment the company has in the city of Arlington Heights, Illinois. The combination of NSN's presentations, the tour of Arlington Heights, and my discussions with the vendor gave me a new appreciation for the difficulty operators are going to face when they o deploy metro cells on a large scale.
As with most vendor visits, NSN's included the obligatory small cell forecast. The company's forecast, like every other one I have seen, shows several more years of fairly modest growth followed by a very steep incline, with metro cells playing a significant part in that incline. The two main questions with these forecasts are always when does the steep incline begin, and how big is the incline. Will the ratio of small cells to macro cells be a factor of 5-to-1, 10-to-1, or something altogether different?
Most forecasts I have seen on this topic are primarily driven by assumptions about future data usage. However, the actual size of the metro cell market will be influenced by factors beyond just data traffic.
I see these market growth challenges falling into two categories. One category concerns issues with spectrum, interference, and macrocell co-existence. The other category deals with challenges coming from the actual physical deployment of metro cells.
Spectrum, Interference, and Co-existence
One of the most common reasons given for why the metro cell market will grow is that operators have limited spectrum they can use. But, those limited spectrum holdings can also inhibit the growth of metro cells. If an operator has very little spectrum to work with, macro and metro cells might have to share the same slice of spectrum. This increases the chance of interference between the two network layers. And, as interference negatively impacts the usefulness of metro cells it will limit how many an operator deploys. Operators that can dedicate spectrum specifically for metro cells will be able to derive more benefit from a metro cell deployment, and be motivate to deploy more of them than a spectrum constrained operator.
Related to this issue of interference there is the broader issue of metro cell/macro cell coexistence that still needs to be fully worked out. There are real questions regarding how well metro cells with interact with macro cells. A common concern has to do with whether or not a mobile operator can source their metro and macro cells from separate vendors. Will a metro cell from Vendor A work well with a macrocell from Vendor B? Will an operator have to give up some SON features if it wants to deploy a multi-vendor heterogeneous network? Working out these issues can delay the large-scale deployment of metro cells.
Metro cells promise greater ease of deployment than the much larger macro cell. In a single base station to base station comparison there is no debate regarding the deployment advantages of metro cells. Unfortunately for mobile operators, their metro cell deployment requirements will be significantly higher than just one site. And, this is where the challenges begin.
The most obvious and most discussed deployment issue is backhaul. Backhaul can significantly raise the cost and complexity of the deployment, especially where microwave is needed for backhaul. If microwave backhaul requires a separate box at the site it will increase install times, and raise deployment costs. Microwave backhaul needs to be fully integrated into the metro cell. If not, mobile operators might limit the number of these small cells they deploy. But, the biggest and most underestimated challenge, could very well be site acquisition.
Based on some of the metro cell modeling I have seen, mobile operators could be looking at deployments of 100 plus base stations within a give city. Needless to say this is very different, from a site acquisition perspective, than what they are used to dealing with today. Plus the types of sites--sides of buildings, lampposts, etc--are very different than where macro cells are deployed.
I believe mobile operators will run into all sorts of unforeseen difficulties in acquiring these sites and getting them into the proper condition for deploying metro cells. Site acquisition is an aspect I believe many forecast overlook when estimating the time frame for the metro cell market to begin ramping up. Zoning requirements could easily delay a deployment by a year. Mobile operators would be smart to revisit some of the zoning and site acquisitions that the municipal Wi-Fi market had to deal with. The high number of sites involved in a metro cell deployment very likely could also lead to more RAN sharing.
Most mobile operators have competition. If one operator needs 100 plus metro cells within a given city, there is a good chance that its competition will need just as many. And the competition will want them in the same locations. Now imagine a market where there are three or more mobile operators competing. At some point all the good sites will be taken. Plus, after a while hundreds of these unobtrusive small cells will become pretty obtrusive. I doubt municipalities are going to want to clutter up their streets with all these small cells. These types of concerns could lead to RAN sharing for metro cells, which could severely limit the overall size of the market.
My point in all of this isn't to say I don't think metro cells have a future. It is really to point out that focus of data traffic and how it will drive metro cell deployments only tells part of the story. There is lots of work that still needs to be done to get metro cell growth to that high end of the hockey stick curve.
Daryl Schoolar is Principal Analystof Wireless Infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at [email protected] and follow him at @DHSchoolar.