Roll-out of urban small cells is hampered by access to sites and approvals, operator survey shows, but automation could be key in reducing costs

In our latest Market Status Report 2020, it is clear to see that indoor/enterprise small cells will be a far larger market than urban small cells in the short term.

However, there is still strong predicted growth in urban small cells, particularly if barriers can be addressed.

Urban small cell networks will be slower to get to large scale, largely because of the need to involve many stakeholders and convince them of a common benefit; the complexity of siting and approval regulations; and the fact that the macro networks often deliver ‘good enough’ performance outdoors, in a way they often do not inside buildings.

The roll-out of a small cell layer to complement the macro network will be driven partly by the need to fill gaps in coverage and urban canyons; or to address hotspots of data demand; but also by emerging new applications and services that will require excellent coverage and quality of service, from smart city and public safety use cases to 5G-era transportation, augmented reality services and immersive communication.

In our market status forecasts for urban small cells, in the base case urban densification will drive a CAGR of 24% to reach deployment of 2.1 million radio units in 2026, and a cumulative total in 2019-2026 of 11.1 million. The difference between best and worse case scenario forecasts is 6.8 million units, so there is much to gain from reducing barriers to deployment.

According to the service providers surveyed, the number one factor influencing speed and scale of adoption is access to appropriate sites at an affordable price. Just over half of respondents named this a top-three consideration, and several other top 10 factors also relate to sites and approvals.

Figure 9: Key factors that will accelerate or hold back deployment of urban small cells before 2023

A standard process for equipment and site approvals is the third most important factor. These regulatory issues also relate heavily to the second-placed accelerator/ barrier, the reduction of total cost of ownership (TCO), cited by 46%.

Despite progress in some markets – in some US states, for instance, and in EU-wide policy – there is still too much complexity, bureaucracy and fragmentation in city siting and deployment processes. This increases cost and operators often have to follow different rules in each region or even each city, making scalability very difficult.

However, operators recognize that reducing TCO is not all about regulation. They are also prioritizing the adoption of changes that will help reduce cost in other ways.
Automation across all domains from radio units to backhaul and core is seen as a critical enabler by almost one-third of service providers, and affordable backhaul and spectrum also figure in the top 10, though the need for shared spectrum is less prominent than in the enterprise sector, where there will be a more rapid diversification of the kind of companies deploying and running the networks.

There is also an intensifying focus, compared to previous surveys, on new ways of rolling out and running networks, so that costs and risks are reduced for all stakeholders. Sharing costs and networks with other operators or with the city itself is seen as a key enabler by 30%, while 18% want to be able to outsource some operations, or the network itself, to a neutral host or as-a-service provider.

Small Cell Forum has for many years worked to reduce administrative and regulatory barriers; much has been achieved, but there is still a lot to do in this area. Our work in the area of automation and planning addresses the need to reduce costs and achieve a better return on investment from small cell deployments (read our release document co-authored with 5G Americas: Precision Planning for 5G Era Networks with Small Cells).
You can download the full Market Status Report 2020 here.