Small Cells Report 2011-2016: Analysing the Business Case of Heterogeneous Networks

• Publication date: November 2011

Report Details Vendors Building a Strong Case for Small Cell Architectures "A mixed macro/ small cell architecture offers about 2.5 times the user data rate of a pure macro cell environment, providing 1.8 times the capacity for a mean data rate of 10Mbps per user- NEC" Major vendors such as Alcatel Lucent, Ericsson, NEC and Huawei are building a strong case for small cell architectures to be deployed for both 3G and 4G, of...

Report Details
Vendors Building a Strong Case for Small Cell Architectures

"A mixed macro/ small cell architecture offers about 2.5 times the user data rate of a pure macro cell environment, providing 1.8 times the capacity for a mean data rate of 10Mbps per user- NEC"

Major vendors such as Alcatel Lucent, Ericsson, NEC and Huawei are building a strong case for small cell architectures to be deployed for both 3G and 4G, offering significant commercial and performance benefits. Visiongain expects small cells to become fully proven and complete solutions by 2013 with surveys suggesting over 35% of operators considering deploying pico and micro cells in 3G/ 4G networks from 2012. This report quantifies the small cells market (femto cells, pico cells, micro cells) and Wi-Fi, analyses the market drivers, the key market players and their strategies.

A Range of Factors is Fuelling the Growth of the Small Cells Market 

Small Cells Report 2011-2016: Analysing the Business Case of Heterogeneous Networks examines the small cells landscape by exploring femto cells, pico cells, micro cells and Wi-Fi. The emerging trends in key geographical regions, supporting technologies, infrastructure requirements and product portfolio are discussed. A continued aggressive growth in data traffic fuelled by increase in smartphones, video and application usage and M2M devices has created an urgent need for faster and efficient networks. We present a comprehensive business case for through a value chain analysis and discuss monetisation strategies to improve revenues for operators.

What is Unique about this Report?

Visiongain research presents independent, unbiased analysis in detail and in easily digestible terms. Through key industry contacts, our primary and secondary research provides you with the very latest, accurate market data available. Visiongain analyses the current small cells market and provides a detailed analysis and forecasts through to 2016.

Who needs to read this report?

• Mobile Network Operators (MNOs)
The report aims to provide operators with analysis on various small cells approaches including Wi-Fi to improve network capacity and performance. Operators can evaluate and devise a successful strategy to monetise small cells. Viable business models for improved operator revenues are also explored within this report.

• Handset Manufacturers 
Rapid proliferation of smartphones and popularity of value added services has increased the data traffic. As the penetration of smartphones increases further, new opportunities exist for handset manufacturers to monetise the small cells market. 

• Technology Vendors/ Solutions Provider
Technology and chipset vendors such as Texas Instruments, Picochip and Qualcomm have already formed partnerships with operators to deliver small cells solutions by 2013. Case studies, product launches, partnerships and future plans are discussed in this report.

• Service Providers
Opportunities exist for service providers to use their current infrastructure to offer advanced services and save on operating expenses by providing a cost-effective alternative to traditional backhaul methods.

Visiongain is a trading partner with the US Federal Government
CCR Ref number: KD4R6 

Wireless Technology Industry

Table of Contents

E. Executive Summary
E1. Increasing Data Traffic and Need for Additional Network Capacity
E2. Addressing Deployment Aspects to Increase Operator Profitability
E3. Status of Small Cells Deployments
E4. Market Outlook
E5. Key Findings of the Report

1. Introduction and Market Overview
1.1 Defining Small Cells
1.1.1 Micro Cell
1.1.2 Pico Cell
1.1.3 Femto Cell
1.2 Market Drivers
1.2.1 Smartphone Availability and Penetration
1.2.1.1 Impact of Smartphones from the Mobile Operator's Perspective
1.2.2 App Downloads Increasing
1.2.3 Mobile Broadband on the Rise
1.2.3.1 Growing Business Demand for High-Speed Broadband in Emerging Markets Spurs Network Expansion
1.2.4 M2M Devices Rising
1.2.4.1 Challenges Presented By M2M on Networks
1.2.4.1.1 Prone to Congestion
1.2.4.1.2 Massive Number of Devices
1.2.4.1.3 Diverse Services
1.2.4.1.4 Different QoS Requirements
1.2.5 Connected Homes
1.2.6 Mobile Video
1.2.7 Need for In-Building Coverage
1.2.7.1 Enterprise Demands for In-building Coverage
1.3 Aim of the Report
1.3.1 Structure of the Report
1.3.1.1 Market Definition
1.3.1.2 Key Questions Answered by this Report:
1.4 Target Audience
1.5 Methodology

2. Hetnet Business Models & Operator Strategies
2.1 Hetnet Architecture
2.2 Baseband Pooling
2.3 Traffic Management Strategies for Operators
2.3.1 Traffic Offload via Micro Cells and Pico Cells
2.3.2 Traffic Offload via Femto Cell
2.3.2.1 Femto Cells: Challenges and Solutions
2.3.2.2 Femto Cell Transmit Power Self Calibration
2.3.3 Traffic Offload via Wi-Fi
2.4 Comparing Small Cells Approach to Hetnets
2.4.1 Micro cells versus Wi-Fi Performance
2.4.1.1 Large Macro Cell (Low Density)
2.4.1.2 Small Macro Cell (High Density)
2.4.1.3 Other Technical Considerations
2.4.1.3.1 Mobility
2.4.1.3.2 Quality of Service
2.4.1.3.3 Security
2.4.1.3.4 Self Organising Network (SON)
2.5 Design of Hetnets
2.5.1 Deployment Aspects and Choice of Radio Access Technology
2.5.1.1 Small Cells in 3G Networks
2.5.1.2 Small Cells in 4G Networks
2.5.2 Type of Low Power Node and Backhaul Solution
2.5.3 Equipments Serving the Hetnets Architecture
2.5.3.1 Hetnet Architecture Layers and Radio Access Equipment Sectors
2.5.3.2 Technology for Cell Site Backhaul

3. Small Cells Vendors, Strategies & Product Portfolio
3.1 Small Cells Drivers
3.2 Direction of Future Market Development
3.2.1 Need for SON in Hetnets
3.2.2 Huawei's Single SON Feature
3.2.3 LTE Will Fuel Small Cells Deployment
3.3 The SingleRAN: Huawei
3.3.1 Huawei's Customers
3.3.2 Case Study: China Unicom
3.4 lightRadio: Alcatel Lucent
3.4.1 Components of lightRadio Product Family
3.4.2 lightRadio: Benefits
3.4.3 Alcatel Lucent's Customers
3.5 AIR (Antenna Integrated Radio): Ericsson
3.5.1 AIR Benefits
3.5.2 AIR Product Specification & Features
3.5.3 Integrated Carrier Wi-Fi
3.6 Liquid Radio and Liquid Net: Nokia Siemens Networks
3.6.1 Flexi Multiradio Antenna System
3.7 4G Small Cells Products: Picochip
3.7.1 PC 9608/9
3.7.2 Integrated 3G Femto & Wi-Fi solution: Picochip
3.8 Cloud RAN Wireless Networking Solution: ZTE
3.8.1 The Trial Results
3.9 Samsung's 4G Small Cells Solutions
3.10 Hetnet Small Cells Market Evolving into Hyper Competitive Market
3.10.1 The Patents War

4. Hetnets Market Forecasts and Outlook
4.1 Femto Cell Market Forecasts and Future Outlook (2011- 2016)
4.1.1 Femto Cell Market Heating Up With Vendors Setting Base
4.1.2 Regional Outlook for Femto Cells
4.1.3 Femto Cell Shipments Gaining Traction
4.1.4 Femto Cell Market Survey
4.2 Pico cell Market Forecasts and Future Outlook (2011- 2016)
4.2.1 Pico cell Revenues Set to Boom In The Near Future
4.2.2 Pico Cell: A Boon for Metros and Cities
4.2.3 Pico cells: A Way for Indoor Networks
4.2.4 Regional Outlook for Pico Cells
4.3 Micro cell Market Forecasts and Future Outlook (2011- 2016)
4.3.1 Micro cell Market Still Developing Yet Still the Most Prominent Small Cells Market
4.3.2 CAPEX Savings Seen As a Driving Factor for Micro Cells
4.3.3 Regional Outlook for Micro Cells
4.4 Wi-Fi Market Forecasts and Future Outlook (2011- 2016)
4.4.1 Wi-Fi Market Up and Speeding
4.4.2 High Competition in the Wi-Fi Market
4.4.3 In-Flight Wi-Fi: A Unique Opportunity
4.4.4 Increase in Wi-Fi Direct Devices Shipment in 2011 and in Future
4.4.5 Regional Outlook for Wi-Fi
4.4.6 Wi-Fi Chipsets in All Spheres of Our Lives
4.5 Consumer Needs and Expectations of Mobile Services at Home
4.5.1 UK
4.5.2 Germany
4.6 Leading Regions and Vendors in Hetnets Markets

5. Conclusion
5.1 Rising Traffic Volumes and Demanding Customers
5.2 Vendors Build a Strong Case for Small Cell Architectures
5.2.1 Small Cells and LTE
5.2.2 Integrated Antenna Systems Favouring Growth of Small Cells
5.2.3 Small Cell Deployment Challenges and SONs
5.3 Wi-Fi Offloading and its Challenges
5.4 Operator Benefits from Small Cells: Increased Revenue, Reduced Cost
5.5 Small Cells to Provide 2G, 3G And 4G Access in One Solution
5.6 Femto Competition Driving Free Offerings
5.7 Key Findings of the Research

Appendix A
About visiongain

Appendix B
Visiongain Report Evaluation Form

Appendix C
Report Methodology

List of Tables in this Report

Table 1.1 Differences between femto cells and pico cells
Table 1.2 Level of traffic generated by different device types
Table 1.3 Total Smartphone Sales to End Users 2010-2016
Table 1.4 Global Mobile Data Traffic 2010-2015
Table 2.1 Design criteria for low power node deployment
Table 3.1 List of small cells vendors and their solutions
Table 3.2 Business benefits of lightRadio technology components
Table 3.3 Benefits of lightRadio
Table 3.4 Picochip's femto cells products portfolio
Table 4.1 Femto cell vendor deals with operators
Table 5.1 Challenges in deploying small cell networks

List of Charts in this Report

Chart 1.1 Smartphone sales forecasts 2011-2016 (in millions)
Chart 1.2 Revenue forecasts for global mobile apps (in $ billions)
Chart 1.3 Mobile Data Traffic Growth 2010-2016 (Exabytes/ month)
Chart 1.4 Capacity demand vs time of the day in modern networks
Chart 1.5 M2M traffic growth 2010-2016 (Terabytes/ month)
Chart 1.6 Video Traffic as a % of total mobile data traffic (%)
Chart 1.7 Video Data volume generated by devices type (in %)
Chart 1.8 Mobile Global Data Usage (in TetraBytes/ Month)
Chart 1.9 Growth of In-Building Data Traffic 2011-2016 (in MB/ Month)
Chart 2.1 Dual Mode Phone Shipments 2011-2016 (in Millions)
Chart 2.2 Large Macro Cell Scenario, Uniform Distribution
Chart 2.3 Large Macro Cell Scenario, Hotspot Distribution
Chart 2.4 Small Macro Cell Scenario, Uniform Distribution
Chart 2.5 Small Macro Cell Scenario, Hotspot Distribution
Chart 3.1 % of interviewed operators deploying small cells (pico and micro)
Chart 3.2 % of interviewed operators deploying LTE small cells (pico and micro)
Chart 3.3 Network costs by sector
Chart 3.4 Mobile hetnet global patent landscape
Chart 4.1 Global Shipments of Femto cells 200 mW- 1W (in $ millions)
Chart 4.2 Regional Shipments of Femto cells in $ millions (2011- 2016)
Chart 4.3 Residential femto cells a critical part of 4G deployments?
Chart 4.4 Small cells other than residential femto cells a critical part of 4G deployments?
Chart 4.5 Commercial availability of LTE femto cells
Chart 4.6 When will Iuh-based femto cell deployment begin
Chart 4.7 When will Iuh based femto cell support plug and play interoperability
Chart 4.8 Key differences between residential femto cells and pico cells
Chart 4.9 Global shipments of pico cells 1W- 5W (in $ million)
Chart 4.10 Regional forecasts of pico cells in $ millions (2011- 2016)
Chart 4.11 Global shipments of micro cells 5W- 10W (in $ million)
Chart 4.12 Regional shipments of micro cells in $ millions (2011- 2016)
Chart 4.13 Global shipments of Wi-Fi (in $ million)
Chart 4.14 Wi-Fi Equipment Market Share in 2011 (%)
Chart 4.15 Regional shipments of Wi-Fi in $ million (2011- 2016)
Chart 4.16 UK consumers interest in small cells
Chart 4.17 Germany consumer preferences for small cells services
Chart 4.18 Leading regional hetnets market by 2016 (%)
Chart 4.19 Small cells vendor ranking by revenue (2011)
Chart 5.1 Coverage of hetnet components by cell type

List of Figures in this Report

Figure 1.1 Femto cell operation diagram
Figure 1.2 Comparison of traffic generated by smartphones, feature phone and PCs
Figure 1.3 Data consumption pattern from state switching in a smartphone
Figure 1.4 Factors affecting mobile broadband data growth
Figure 2.1 Hetnet Architecture
Figure 2.2 Hetnet concept
Figure 2.3 WLAN Connectivity
Figure 2.4 Distributed baseband (BB) and centralised baseband
Figure 2.5 Baseband pooling benefits
Figure 2.6 Deployment of micro/ pico cell in the same frequency channel as the macro
Figure 2.7 Wi-Fi offload from 3G networks
Figure 2.8 DSMIP Based IP flow mobility between 3G and Wi-Fi Networks
Figure 2.9 Small Cell & 3G Deployment for Network Enhancement
Figure 2.10 Relay for connectivity to cellular networks
Figure 2.11 Equipment segments serving hetnet access infrastructure market
Figure 3.1 Femto cell supply chain
Figure 3.2 Alcatel Lucent's lightRadio cubes
Figure 3.3 lightRadio architecture
Figure 3.4 lightRadio technology components
Figure 3.5 Ericsson's hetnet vision
Figure 3.6 Ericsson's Antenna Integrated Radio (AIR)
Figure 3.7 NSN's guide for operators to cope with fluid future
Figure 5.1 Small cell architecture for LTE
Figure 5.2 Benefits of small cells technology

Companies Listed

Airspan
Airvana
Alcatel Lucent
Amazon
Apple
Aruba
AT&T, US
Atheros
Barnes & Noble
BBC
BelAir Networks
Bell Labs
Broadcom/ Percello
Cavium
Cellular South, US
China Mobile
China Unicom, Shanghai
Cisco
CMCC, China
Cosmote, Greece
D- Link
Delta
DesignArt Networks
Deutswche Telecom
Ericsson
Facebook
Foxconn
Freescale
Google
Hyundai
Intel
InterDigital
Inventec
ip.access
KDDi
Kodak
LG
Linksys
Marvell
Matsushita Electric
MegaFon
MetroPCS, US
Microsoft
Mindspeed
Mirror Online
Mobily
Motorola
NEC
Netflix
NETGEAR
Network Norway
Nokia
Nokia Siemens Networks
NSN
NTT DoCoMo
Oracle
Orange, France
Pace
PCCW, Asia
picoChip
Powerwave
Qualcomm
Ralink
Realtek
RIM
Saab
Samsung
SFR, France
SK Telecom
Sony
Sprint
Technicolor
Telefonica
Texas Instruments
The Guardian
Toshiba
Toyota
TP- Link
Ubiquisys
Verizon Wireless
Vimpelcom, Russia
Virgin America
Vodafone, Czech Republic
Vodafone, Italy
Vodafone, Netherlands
Vodafone, UK
Volkswagen
YouTube
ZTE
ZyXel