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Whats Next for Small Cells?
Summary
This is an exciting time for mobile networks. At the start
of 2014, we find ourselves in the midst of one of the
biggest changes in RAN architecture to occur in a long
time. The number of mobile connections exceeds the
worldwide population and, as we rely increasingly on
smartphones, tablets, and other wireless devices to
satisfy our thirst for data, we find that wireless networks
are evolving into Heterogeneous Networks (HetNets) as
an efficient means of network densification for increased
capacity. This means that there is no single approach to
small cells, but that multiple techniques can be brought
to bear to densify a network depending on the particular
deployment scenario.
As seen throughout 2013, these techniques in the
network densification toolbox involve not only the
access network with Wi-Fi, DAS, licensed micro-, pico-,
and femto- small cells, but also to the backhaul network
in the first mile with a variety of technologies used for
fiber, copper, and wireless backhaul kinks.
This is a complex problem and leading equipment
vendors, infrastructure owners, and systems
integrators are stepping forward to offer professional
services, such as Small Cells as a Service (SCaaS) and
turnkey Build Operate Transfer (BOT) contracts to
help deploy small cell networks for the mobile network
operator (MNO). These approaches can help manage
the complexity and achieve the Quality of Experience
that the subscriber demands.
There are also initiatives in the upcoming 3GPP
Releases 10, 11, 12, and 13 that target dense HetNets
and new plans for spectrum. These initiatives include
Self Organizing Network (SON) capability, enhanced
intercell interference coordination (eICIC), dual
connectivity and bearer split, LTE in the unlicensed
band, evolution to 3 GHz/3.5 GHz, and the adoption
of Authorized Shared Access (ASA) schemes for
dedicated small cell networks.
Deployment Challenges and Opportunities
Last year, ABI Research believes that industry
identified several practical challenges when attempting
to deploy a small cell network. While not impossible to
overcome, these challenges also add to the complexity of
any small cell project. The challenges can be grouped
into three main categories: backhaul, power, and siting.
Like small cells themselves, a rich portfolio of solutions
exists for small cell backhaul. There is no single solution
or panacea for small cell backhaul and ABI Research
believes it will take a toolbox of technologies to handle
every deployment scenario. Of course, the best backhaul
link will always be fiber, but that is not usually available
where the small cell needs to be. So, the MNO uses other
technologies to get backhaul traffic to a fiber
aggregation point in as short a distance as possible.
One of the factors that small cell backhaul must have is
low cost, or at least a cost compatible with the cost of
the small cell itself and various technologies are being



2014 ABI Research www.abiresearch.com
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page 2
proposed at different frequency bands. Two of the most
popular choices are sub-6 GHz and 60-GHz.
The wireless sub-6 GHz NLOS technologies are
emerging as an attractive solution and ABI Research
sees many innovations in this area, ranging from a wide
variety of large to small vendors. Also, the lightly
licensed V-Band 60 GHz nLOS/LOS solutions are
becoming attractive, since the rapid signal attenuation
by oxygen turns out to be a feature that allows for
frequency reuse within a short distance, a very
desirable feature for small cell backhaul.
Regardless of the technology choice, many innovations
are being brought to bear on the problem to lower cost
and TCO, and increase bandwidth. One of these trends is
transitioning these systems to all-silicon for lower cost,
instead of the more traditional and expensive GaAs
MMIC systems previously used at the higher frequencies.
Another trend that is becoming meaningful is a move to
modern advanced signal processing to extract the
maximum signal from noise. Several companies are now
employing this emerging feature to simplify backhaul
deployment and lower deployment costs.
One of the challenges to a successful small cell
deployment can be the provision of power to the small
cell. Power is often not available where the small cell
needs to be placed. This is not so much a problem inside
venues or enterprises where Power over Ethernet (PoE)
can be used to power the small cell. With the latest
small cells now on their second and third generations,
they are capable of operating within the PoE power
envelopes, which is particularly useful in in-building
deployment scenarios.
However, outdoors on street furniture, power can be
more of an issue with 24/7 operation, AC-DC conversion,
surge protection, passive cooling, and battery backup all
among the considerations that need to be addressed for a
successful deployment.
Siting describes the third broad category of small cell
deployment challenges. In deploying small cell network,
the operator must involve partnerships with landlords
and site owners and respect city, state, and federal
permitting and regulations. This is probably one of the
areas with the most red tape.
Emergence of SCaaS
This complexity is an opportunity for several
companies who now offer SCaaS from companies that
own infrastructure and street assets and can take care
of siting and power for the MNO wishing to deploy a
small cell network. Also, the equipment vendors
themselves offer professional services in the form of a
BOT services, which hands over a turnkey small cell
network to the MNO.
The larger vendors are taking this one stage further
and certifying sites for small cell use with industry
partners, system integrators, and building and
infrastructure owners. This site-certification service
promises to speed network deployment, improve
quality, and reduce costs for the MNO.
While SCaaS may not be attractive to the large Tier One
MNOs who have the skills and resources to overcome
deployment challenges, it is the Tier Two and Tier Three
operators who are likely to take advantage of SCaaS.
Growing Demand for Multimode
One of the emerging trends for small cells is the growing
demand for simultaneous multimode operation, which
can include either 3G/4G or 3G/4G/Wi-Fi functionality.
Different regions have differing demands, broadly
depending on how much LTE subscriber penetration
exists in the region. In North America, where LTE
penetration is relatively high compared to other regions,
the demand is for simultaneous multimode 3G/LTE
small cells where LTE is used for data traffic and 3G is
used for voice when the subscriber is out of range of the
macrocell. This will change in the future, as MNOs
rollout VoLTE and the need for 3G voice diminishes.
Contrast this with Europe, which has a large 3G installed
base of cellular networks, where the demand right now is
for 3G small cells for both voice and data. However, ABI
Research expects that to change, as LTE rolls out in the
region in the near future. In China, of course, strong
demand exists for TD-LTE small cells compatible with
the countrys rollout of 4G and that add support for
legacy TD-SCDMA. TD-LTE is seeing momentum in
China, as well as in Japan and the United States.
Since almost all smartphones and tablets today
include Wi-Fi, there is a strong requirement to include


2014 ABI Research www.abiresearch.com
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page 3
Wi-Fi in the small cell where the MNO can use Carrier
Wi-Fi as a viable alternative to LTE for data and to
relieve congestion on their networks. Initiatives like
the Wi-Fi Alliances Passpoint and the Wireless
Broadband Alliances Next Generation Hotspot
(NGH) will render the access to Wi-Fi secure,
seamless, and transparent to the subscriber, even
allowing for the choice of access network to be done
under MNO policy control. In fact, ABI Research
expects that MNOs will soon be able to treat Wi-Fi as
an extension of their existing cellular networks.
2014 and Beyond
In 2013, many in the industry started trialing small
cell networks and developing deployment techniques
to solve the challenges outlined in this white paper.
ABI Research believes that 2014 will usher in a
meaningful ramp up of small cell deployments.
Equipment market forecasts are shown below, which
includes combined DAS, small cell, and backhaul
equipment revenues. ABI Researchs DAS numbers
include both active and passive DAS, repeaters, and
installation costs, and the backhaul numbers include
revenue for wireless, fiber, and copper links.

Overall, ABI Research forecasts that the market will
grow by 3.5X by 2018, with DAS systems growing by
2X, metro cells by 4X, and femtocells by 7X. By 2018,
this market is in excess of US$20 billion, with
backhaul for small cells the fastest growing market
segment, growing by 10X. Also, during 2014 to 2015
timeframe, the metro cell and femto cell market
become the same size as the more mature and slower
growing DAS market. Overall, this is a very healthy
30% CAGR and very attractive market for many
vendors in the ecosystem.
Of course, technology evolution is not standing still
and LTE Release 11 and Release 12 HetNet features,
which have been proposed, provide an appreciation of
what this means for small cell networks. One of the
main themes running through these standards is an
ever increasing coordination between the macro cell
and the small cell, which transfers small cell control to
the macro cell and steers traffic either to the macro
cell or small cell. Some of the features under
consideration include Dual Connectivity where a
terminal can make use of radio resources from at least
two cells and Bearer Split, which allows the bearer to
be shared over multiple eNodeBs.
Spectrum is a resource that is evolving with evolution to
3 GHz bands in Asia, Japan, and Europe. In the United
States, 3.5 GHz has been proposed as a small cell access
band, using the concept of dynamic access or authorized
shared access to free up an additional 100 MHz of
spectrum. Another alternative under serious
consideration is unlicensed LTE in the 5 GHz band, a
proposal originally made by Qualcomm and under
consideration for LTE Release 13. This proposal would
use the techniques of carrier aggregation to combine
traffic from licensed and unlicensed LTE for a large
increase in data bandwidth, while ensuring coexistence
with Wi-Fi, which operates in the same band.
Conclusion
The promise of very large increases in network
capacity are being met with the adoption of multiple
types of small cells now including DAS and Wi-Fi
deployed in a HetNet, which is increasingly closely
coordinated with the MNOs macro network. The
HetNet of the future will combine small cells, DAS,
and Wi-Fi in a single coordinated network.
Small cells are not easy to deploy, with challenges and
opportunities emerging in the areas of power,
backhaul, and siting. Multiple companies are now
offering SCaaS and site certification to ease
deployment of small cell networks for MNOs.
0
5,000
10,000
15,000
20,000
25,000
2013 2014 2015 2016 2017 2018
(
U
S
$

B
i
l
l
i
o
n
s
)

Overall 2013-2018 CAGR of ~ 30%
Indoor Femtocell
"First Link" Backhaul
Outdoor Metrocells
DAS


2014 ABI Research www.abiresearch.com
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page 4
The advantage of DAS, which offers neutral host
capabilities, is being eroded by more traditional small
cells systems. Even small cells are being used to drive
DAS networks.
Looking into the future, ABI Research sees a
financially attractive market, which is rapidly evolving
with advanced techniques proposed to maximize
spectrum resources and the bandwidth of these
systems, while minimizing cost and interference, as the
industry evolves to meet the challenges of
exponentially increasing data demands.
References
ABI Researchs Small Cells and Carrier Wi-Fi, In-
Building Wireless, and Mobile Backhaul Research
Services contain details on these topics and many more.
Please follow the links below for more information:
Small Cells and Carrier Wi-Fi Research Service
Enterprise and Consumer Femtocells Research Service
In-Building Wireless Research Service
Mobile Backhaul Research Service
To contact ABI Research, please click
http://www.abiresearch.com/contact/ for more information.
Contributors
Nick Marshall, Principal Analyst
Stuart Carlaw, Chief Research Officer




2014 ABI Research www.abiresearch.com
The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee
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page 5





Published March 20, 2014
2014 ABI Research
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