Every year, Small Cell Forum publishes the industry’s definitive view of the status of deployments and its forecasts for the five years ahead. Every year, some of the findings reinforce the importance of consistent trends, such as the diversification of the deployer community. But every year, there are also some surprises. Of course, expectations have to be reset in the light of bigger events such as the pandemic and the global economic crisis. But they also have to be adjusted to reflect unexpected changes within the small cell industry itself.
In the 2022 edition of SCF’s market status report and forecast, which was published to members this month, there were two surprises. One was the willingness to adopt disaggregated architectures, which look set to be deployed at a deeper and faster rate than we predicted a year ago, particularly driven by enterprise and private network rollouts.
Another related issue, which achieved greater prominence than previously expected, was the importance that industry stakeholders are placing on open interfaces at every level – not just between radio and baseband, but right down to the system-on-chip. This has been sharply increased by the recent supply chain disruption worldwide, which has resulted in shortages of components and equipment.
A key input to the annual forecast is a survey of small cell deployers and other stakeholders such as vendors and regulators. In this survey, 59% said supply chain challenges would make them more likely to prioritize early adoption of open interfaces between now and 2024. When asked to define open interfaces, they focused on open fronthaul, deployment of baseband functions on COTS hardware, and swappable components on the system-on-chip.
Figure 1. Are you more or less likely to mandate open interfaces at component and fronthaul level as a result of supply chain disruption? (Survey of operators and suppliers, 135 respondents).
These findings were just a couple of highlights from this year’s survey, which covered a wide variety of issues related to business models, technology evolution and roll-out plans. The results from the deployers are a particularly important input to the assumptions that drive the annual forecast, and this year, 69 MNOs and 32 other small cell deployers responded (the latter included private network operators (PNOs), neutral hosts and enterprise integrators).
The results confirmed the importance of several trends that were already clearly visible in earlier studies, and that have shaped SCF’s work programme over recent years. The five most important in shaping deployment and commercialization strategies for the early- to mid-2020s were identified as:
- A growing diversity of use cases will require common foundations to avoid fragmentation
- The wide variety of enterprise 5G requirements will require many deployment models
- Migration to 5G is driving architecture evolution, often led by small cells
- Open RAN is taking a central role in the migration to new 5G architectures
- Spectrum bands and licences must diversify too, with support from progressive regulations
Each of these trends is examined in detail, with forecasts of how they will impact on roll-out patterns, in the report.
None of these trends is specific to small cells. Indeed, it is noticeable that, at major industry gatherings, the term ‘small cell’ is used less often than in the past. Compact, low power access points that can be deployed or embedded in all kinds of infrastructure are just part of the mobile network now.
This development will become increasingly important as emerging 5G use cases, especially in the industrial IoT and in vehicular applications, demand fully ubiquitous coverage, not just the hotspots of capacity for which small cells were often used in the past.
Full coverage will drive the growth in small cell roll-out as much as hotspots of traffic – particularly inside enterprise or public buildings, along roads and railways, and to reach remote industrial locations such as power stations or agricultural buildings. As cellular connectivity becomes business-critical for many sectors, this extended coverage is often where 4G/5G small cells will address requirements better than Wi-Fi.
As mobile connectivity becomes central to business-critical 5G-enabled use cases such as digital twin, robotics or immersive customer experiences will drive particular momentum behind private networks that allow the enterprise to control the network and its data in full, usually via a provider such as a private network operator or neutral host.
Such trends mean that, while CAGR will be higher (from a lower starting point) in urban public networks than in enterprise, the latter will continue to dominate volumes in deployment, as well as much of the innovation in use cases. The new forecast predicts CAGR of 15% for the whole global small cell market, which will result in cumulative deployments of almost 36 million radios by 2027. The sharpest growth is taking place in the early years of this decade, with the rate of increase slowing from 2024 as major rollouts are completed (at least until the 6G era).
Within that figure, almost 5.3 million enterprise small cell radio units will be deployed by 2027, 59% of the total, and this sector will see CAGR of 11% in the 2020-2027 period.
The five trends outlined above will drive this healthy rate of adoption as well as considerable innovation in technologies, form factors and business cases. The period from 2022 to 2027 will be one of rapid change and expansion in the small cell market, driven by this need to support diversity in use cases, deployment models and architectures. The flexibility of open networks, shared spectrum and new operating models have the potential to drive significant growth in small cell roll-out and in the social and economic value the networks deliver for operators, enterprises and citizens.
However, this growth is reliant on several key challenges being addressed as a matter of urgency.
There is a wide gap between the best and worst case scenarios modelled in the SCF forecast – with an upside that would be 45% better than the baseline, in terms of cumulative deployments to the end of 2027, and downside that would be 27% worse. The contrast in best and worst case installed bases is dramatic, with the former outcome resulting in twice the number of deployed small cells by 2027.
To grasp the opportunity and get close to the upper number, the industry has to work together to address the challenges. Some relate to ongoing issues around siting and regulation, others to consensus on technologies such as 5G in shared spectrum or disaggregated RAN splits. These will be important areas of focus for Small Cell Forum in this period, as it seeks to drive common platforms and deployment blueprints throughout the ecosystem.
In doing so, it will help to address the biggest risk of open, flexible markets – fragmentation. Common foundations on which vendors and operators can innovate in a unified and interoperable way will be the biggest single factor in ensuring that the small cell industry meets or exceeds the growth predicted in this year’s forecast.