A wide variety of deployers will be critical to hit densification goals
One of the biggest themes which emerged from the recent Small Cells World Summit was the need for a far wider variety of organizations deploying small cells. Now we need to build on that high level of interest, to grasp the opportunity to accelerate densification dramatically by broadening the deployment base. We are calling on members to get involved with a whole range of work items that will create the right conditions for a diverse ecosystem of small cell operators to develop and thrive.
There is an industry-wide trend to apply mobile communications to many more environments and business cases than in the past, and small cells are an essential enabler of that, bringing high quality cellular connectivity to enterprise premises, public spaces, cities and remote areas.
But in many of these environments, the business case for MNOs is unappealing. Their economics are predicated on single-operator, wide area mobile broadband systems, supporting huge numbers of users and applications with generic capabilities.
By contrast, enterprise, industrial and smart city small cells require localized connectivity which is tailored for the specific requirements of the organization; and in most cases, they also require multi-operator support.
That may not be attractive for most MNOs, but it presents exciting opportunities for a variety of other deployers, which can build a profit model based on localized, self-contained and highly optimized small cell networks. Those deployers may be neutral hosts, whose roll-outs can support many service providers including MNOs; private operators with their own expertise and ecosystem in a particular vertical market; or large enterprises which decide to build their networks themselves.
In all cases, they can tick several critical boxes:
- Multi-operator support
- Capabilities customized for the needs of the organization (e.g. SLA-quality reliability or lower latency levels than would be obtained on the main MNO network)
- Added value services such as integration with other corporate systems or enhanced security
- Flexibility about architecture, depending on the environment – e.g. some will deploy a private packet core or an edge computing node to support additional use cases
The MNOs may be involved as tenants, and/or providing spectrum, though one of the key enablers of the secondary market in small cell networks will be a more flexible approach to spectrum. In the coming years, alternative deployers will be able to use their own or shared spectrum. Important examples include shared systems like the USA’s CBRS; spectrum earmarked for industry, as in Germany’s 3.7-3.8 GHz band; and proposals for very localized blocks of 5G spectrum (as in the UK, and the USA’s licensed CBRS scheme).
It is important to note that the rise of alternative deployers does not have to be a negative for MNOs. Some will recognize the potential of deploying networks deep indoors, or in challenging environments like hyperdense cities, critical comms or remote industrial IoT landscapes. These are likely to adapt their business model to share more assets with other operators or with enterprises, and even be neutral hosts themselves – in order to reduce cost and support multi-operator requirements. Others will focus their direct investment mainly on wide area networks but choose to be tenants on the neutral host and private sub-nets so that they can still deliver services to specialized environments without the cost of specialized build-out.
It is also important to note that the cells built out by these secondary deployers would not, in most cases, be rolled out by MNOs. At first glance, increased network sharing might appear to mean fewer cells, but one of the barriers that has slowed densification so far has been the poor economics of several MNOs each building a separate network. In other words, the new operators will greatly increase the total base of small cells by addressing environments that would otherwise be neglected altogether.
A calculation by Rethink Technology Research indicates the scale to which neutral host and private operators will accelerate densification and increase the world’s installed base of small cells by 2025. By that year, in the worst case for non-MNO deployments, the cumulative base of small cells could be over 6 million units smaller than in the best case (one in which there is extensive build-out by alternative deployers from 2019 onwards). In that best case, a compound annual growth rate of 23% would be seen between 2018 and 2025 (global, indoor and outdoor).
Installed base of non-residential indoor and outdoor small cells – base forecast, with best case and worst case scenarios according to speed and extent of build-out by alternative deployers.
This is a clear indication of why neutral host and private cellular models are at the heart of Small Cell Forum’s work programme for 2019-2020. It will impact on work that is being done on shared spectrum, including cooperation with CBRS Alliance; on edge computing projects; and on 4G and 5G use cases. The Forum will also be active in reaching out to alternative operators of all kinds to become members and help to drive the programme in directions which will help them achieve their goals.
Many of the calls to action which emerged from the discussions at SCWS relate to these issues and will help to shape the work of the Forum in the months ahead. These include:
- Encourage neutral host models and private networks to accelerate deployment, especially for specialized environments, and lower barriers between MNOs and alternative deployers.
- Encourage neutral host or enterprise-specific deployers to improve the business case for indoor connectivity while working alongside MNOs.
- Define frameworks for cooperation between the owners of different assets, such as fiber and sites, to ensure an end-to-end neutral host platform and a single relationship for tenants.
- Facilitate cooperation and understanding between MNOs, neutral hosts and enterprises to lower barriers to shared networks.
The chance to expand the number of organizations which can deploy small cells, and therefore the number of organizations which can make use of them to support new services, is an exciting and important one for the Forum. As members, you can make a real difference to creating the right environment for this new ecosystem to develop quickly, improving everyone’s commercial opportunities.