Schoolar: More signs of a maturing small cell market

Daryl Schoolar ovum

Daryl Schoolar

Last November I had the chance to attend Huawei's Mobile Broadband Symposium in Shanghai, China. As part of the symposium I attended the small cell session and moderated an industry panel on this topic. It was during that panel I realized when it comes to the metro and enterprise space, the small cell was finally showing some real maturity. What triggered this realization for me? Nobody during the session talked about coffee coupons as a small cell application.

Don't get me wrong, I like coffee and am very open to getting a reduced-priced cup. As an analyst, however, I get concerned when a market relies too heavily on a few applications or use case examples as growth drivers. For me with small cells it was the idea that operators will monetize small cell deployments through selling SMS-based advertisements to retailers and coffee shops. 

Sure this use by itself has merit, but when I see it repeatedly in small cell discussions with few other use case examples given, it tends to become the unimaginative default example the presenter uses when he or she can't think of any concrete small cell applications.

This is similar to telemedicine and remote education being repeatedly pushed in the early 2000's as the growth applications for fixed broadband before file sharing and streaming video came along to actually grow that market. And the fixed broadband market subsequently developed independently and far beyond the narrow confines of telemedicine and education.

During the Huawei event a representative from IBM spoke about real world applications where small cells are used in a sports stadium for traffic management.  Other use cases from speakers involved better city planning and management. These types of use cases show a maturing market because not only are they being put into place, they show more stakeholders are getting involved and expanding the thinking about how small cells can be used.  Clearly more people are recognizing the value of small cells and investing time in making their deployments work.

But it isn't just applications and use cases that are indicating a maturing market. During the last three months of the year I also attended several other vendor conferences, not just Huawei's. The RAN vendors all talked about small cells, but the discussion had progressed in the market development cycle where talking about actual small cells wasn't the most interesting thing. The interesting things now are partnerships and deployment strategies, which is a good sign.

Partnerships and deployment strategies show the conversation has turned from--"do these things work?" to "how do we actually use them?" Partnership-wise, JCDecaux has certainly caught my attention. The public advertising company is working with Alcatel-Lucent, Vodafone, and Huawei along with others who may not have been made public yet.

Leveraging its different billboard and other physical advertising assets, JCDecaux wants to play a role in deploying small cells. Since gaining physical access to small cell deployment sites is still a major challenge, having a company like JCDecaux step up and take on that challenge should certainly help move things forward.  Expect at the upcoming 2015 Mobile World Congress to see vendors talking about small cell form factors explicitly designed to fit JCDecaux's advertising properties.

All told 2015 should be a very promising year for small cells. We continue to see new deployment announcements, such as SpiderCloud's with Verizon Wireless. Small cell products continue to become more sophisticated with multi-standard and LTE carrier aggregation support. With that said, applications that enhance, optimize and leverage small cells, especially around the enterprise, still need more development. The secret is to get businesses to think about small cells in the same way they think about Wi-Fi access points. If this can be done, we will really see the enterprise space heat up.

Daryl Schoolar is Principal Analyst of 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.