Enterprise small cells: Market Status predicts strong growth, if barriers to deployment can be overcome

The forecast for growth in enterprise small cells is strong and the potential is high, if barriers are removed quickly.

In our latest Market Status Report, forecasts show there is opportunity for the industry to deploy 25% per cent more enterprise small cells in the period 2019 – 2026 if best case predictions prove true, but in the report we delve deeper into the factors that will affect the strength of that growth.

Many industry sectors are highly interested in cellular connectivity that is optimized for their particular requirements, whether those relate to enhanced reliability, security or responsiveness. That has the potential to drive a rapid increase in deployment of small cells in many industries.

But many organizations are also keen to reduce their perceived risk by relying on integration and support from a trusted partner or specialist vertical industry service provider. And even more are keen to ensure that cellular networks are fully under their control, in the same way as their other connectivity. Those demands will change the shape of the value chain, and if the maximum number of small cell networks are to be deployed, it will be essential that barriers are removed to non-traditional operators, including enterprise specialists.

In the base forecast, enterprise small cell deployments will grow at a CAGR of 9% to reach almost 4 million in 2026, and a cumulative total of 26.2 million. However, the best-case scenario would see a CAGR of 13%, to reach 5.3 million radio unit deployments in 2026 and a cumulative total of 32.8 million. In the worst case, the CAGR would be 7%, and the cumulative total 23.7 million units. That equates to a difference of over 9 million installations, depending on how effectively enterprise requirements are satisfied and barriers removed.

The survey respondents were asked about their drivers and barriers to deploy enterprise small cell networks. As Figure 7 indicates, the main factors that will either accelerate or hold back enterprise small cell deployment – depending on how these demands and risks are addressed – are led by considerations of cost and ease of operations. A total of 42% of service providers say that lower opex costs than current systems will be essential to their enterprise success.

While capex only just features as a top concern, operators say they need to be able to reassure enterprises that the opex will be low and predictable, whether by offering the small cell networks on an as-a-service basis with a fixed fee for all management and analytics; by engaging in cost/risk sharing with the enterprise (a top 10 issue in its own right); or by driving down the overall total cost of ownership for a system that the enterprise buys outright.

Figure 7: Key factors that will accelerate or hold back enterprise small cell deployment before 2023

Most of the other factors relate to simplicity to deploy and run the systems:

• plug-and-play roll-out, which reduces cost and risk whether it is being handled by the enterprise or the service provider;
• automated operations, or alternatively the ability to outsource this to the service provider on an aaS basis;
• a simple migration path to 5G when that becomes desirable.

Many of our up-coming work items address the barriers in enterprise small cells, for example our Indoor Cellular Working Group will begin a work item on technology requirements for neutral hosts, addressing the needs of this growing sector of the industry.

You can download the full SCF Market Status Report 2020 here.