Operator survey finds that denser 5G networks will drive significant growth in the roll out of small cells

One of the few aspects of 5G on which there is broad agreement is that it will be deployed completely differently from previous mobile networks. It will need to be far denser, in order to support the broad range of use cases envisaged, and to take advantage of new spectrum bands.

That level of density will drive a significant growth in roll-out of small cells, and will be enabled by profound changes to the architecture and economics of those networks. SCF forecasts that between 2015 and 2025, new non-residential small cell deployments will grow at a compound annual rate of 36%, and by 2025 deployments will be 22 times higher than in 2015.

But operators and vendors need to drill down below these broad predictions and understand the detail of how densification will happen in different markets, so that they can formulate their plans now, and lay the foundations in their current networks.

To support this, Small Cell Forum commissioned an in-depth survey of over 50 tier 1 and 2 mobile and converged operators, to understand more about their deployment plans and business drivers for a dense HetNet, and the barriers they need to overcome.   

Operators are planning for dense HetNets

It is clear from the results that most mobile network operators (MNOs) are starting to plan for dense HetNets even if they do not intend to deploy the 5G radio network at scale until well into the 2020s. The biggest uptick in new deployments of small cells will be seen in the 2018-2020 period, with a 50% increase, with a second sharp increase in 2023-2024 as 5G densification gets into full swing.

 The 2018-2020 result indicates that many operators are densifying their networks long before they upgrade to 5G – the start of 5G small cell deployment will come in 2020, with 68% of respondents planning to embark on this upgrade before the end of 2022 and the rest later than that. By 2020, according to the survey, 40% of operators expect to deploy between 100 and 350 small cells per square kilometer in the areas they densify (such as urban downtowns).

 In other words, densification is not just a 5G issue, though it is essential to most MNOs that the technologies they deploy in 4G should be readily migrated to the next generation radio at the right moment. Operators want to address the key issues surrounding small cell deployment now, in the slightly less dense and demanding environment of LTE, so that the foundations are in place for 5G.

 When asked to rank their critical requirements for small cells, the criteria which came out top were all related to the here-and-now as well as 5G futures – low total cost of ownership (TCO), multivendor interoperability, ease of deployment and good macro network interworking were the most commonly cited (all placed in the top five by at least 60% of respondents).

 SCF work program supports operator requirements

All these are central to SCF’s work program for 2017 and beyond, based on inputs from operators and other members. It is vital for the industry to support the key requirements as soon as possible, since the survey shows that many operators would be keen to accelerate their deployment timeline, if their concerns were addressed. For instance, 19% would ideally like to start at-scale deployment within one year, but only 7% believe that will be practical and affordable. The key factors which would enable them to bring their deadlines forward would be new sources of affordable fiber for backhaul and fronthaul (53% cited this), followed by lower overall TCO (50%) and easier access to sites (46%).

The desire to deploy more urgently is a new trend in a market where small cells have often, until recently, been seen as a ‘nice to have’ rather than essential. The survey results make it clear that the drivers to deploy are becoming more diverse and business-critical. Small cells are no longer just to fill coverage or capacity gaps. Instead they are essential to improve quality of experience – the main determinant of customer satisfaction – and to support new services and revenue streams.

These two factors, along with lower TCO, emerged as the top three drivers to deploy small cells at scale. And there is increasing diversity of business cases – on top of mobile broadband, 40% plan to introduce new enterprise services enabled by small cells before 2020, and two-thirds after that; while for IoT services, the figures are 29% and 39%.  

Business case diversity goes hand in hand with architectural diversity

To support business case diversity, there is a need for architectural diversity too. The small cell network of 2018 will look very different from that of 2015 – not just standalone access points, but virtualized clusters of cells and distributed radio systems. Many of the architectural changes on which SCF has worked in recent years are being actively adopted to make densification easier and support additional use cases. For instance, by the end of 2019, 75% of operators will have implemented small cell SON (self-optimizing networks), 33% will have implemented virtualized controllers; and 25% will have started to deploy end-to-end orchestration of physical and virtual cells.

Other architectural changes which will help to enable additional services or QoS, and so improve the small cell business case, include edge computing, which 79% expect to be supporting by the end of 2022; and LTE in unlicensed spectrum, which two-thirds will be using by 2022. These two technologies will be particularly valuable to enhance the enterprise business case, according to the survey.

Enterprises are the primary commercial driver for densification

Indeed, enterprise services are the primary commercial driver for densification in general. The respondents said the areas where they would see the greatest business case for density would be transport hubs, business parks and corporate buildings or campuses, while significant opportunities are also seen in medium-sized enterprises and the hospitality and property development sectors.

Such findings are the reason why SCF has set up a comprehensive enterprise program in the past couple of years with initiatives like its Enterprise Advisory Council. By forging links and understanding between different business sectors and the mobile industry, the Forum will help to open the floodgates to dense small cell networks and the business models they can support on the road to 5G.

Download the operator survey here