The wide variety of contributions in this edition of our member newsletter highlights Small Cell Forum’s mission to support business model diversity. Our technical, commercial and regulatory work all combine to make it viable and attractive for many types of organization to deploy 4G and 5G networks.
With more and more enterprises requiring top quality mobile connectivity to support critical processes, there will be a growing number of different service providers addressing the huge range of locations, use cases and connectivity types that will be needed. Neutral hosts have a key role to support large numbers of service providers, enterprises, cities and venues.
They avoid fragmentation of the market by investing once in platforms that can enable many stakeholders, and they achieve scale economics by saving every organization from having to deploy networks individually. They have varying business models, from site procurement and management only, to full active network-as-a-service. Some will focus on specific verticals or locations while others will look to operate on a wide scale, as the towercos have done in the macro network.
There are, then, many benefits from having a neutral host model to complement direct deployment by MNOs or others. But as the towercos know well, these benefits will only be attainable if the regulatory regime is favorable.
There are several ways in which regulators can facilitate and even encourage neutral host models in small cells. There is also a role for government policy makers, since small cell networks typically involve a larger number of stakeholders – and more areas of regulation – than a macro network, so a coordinating framework is required to ensure that regulations made by different departments are joined-up.
The key regulatory activities relate to spectrum, site access (especially outdoors), regulations for new or refurbished buildings, and competition.
In spectrum, a rising number of telecoms regulators round the world have been opening up new spectrum for 4G and/or 5G on a flexible basis that can support new business models such as neutral host. In higher frequency bands such as 3.4-4.2 GHz or the 26/28 GHz millimetre wave band, there is sufficient capacity to auction some long term licences in the traditional way (mainly to MNOs), while also setting aside spectrum for shared use. There may be portions of a band that are dedicated to shared usage, such as the general access portion of the USA’s CBRS spectrum; or there may be mechanisms to allow new players to use parts of licensed bands that are under-utilized by incumbents. The UK is one country that has introduced the latter scheme.
Such schemes reduce the cost of entry to the market for neutral hosts that want to offer active networks on a wholesale basis, because there are few or no spectrum fees. Even if they are only supporting passive infrastructure, shared spectrum will enable a larger number of small cell operators, and so increase their pool of potential tenants. In turn, neutral hosts are the most efficient users of shared spectrum because they support many enterprises and service providers and so they avoid the risk of spectrum fragmentation and potential interference.
The biggest challenge of deploying small cells, as opposed to macro networks, is the large number of sites required. Countries with progressive regulatory regimes regarding affordable and open access to sites show very strong levels of densification. For instance, when Japan removed the need to obtain individual, and complex, paperwork for every mobile site, and replaced it with a generic, streamlined permission, the build-out of smart city networks accelerated threefold in some municipalities.
The regulatory regimes that encourage rapid, affordable and repeatable build-out processes are those that will benefit most from dense networks, and for the past few years, SCF has been influential in influencing regulatory reform that has been seen in markets such as the USA and European Union. This is not just about city sites. Regulations regarding access to, and facilities for, new commercial buildings are important – China has been a leader in coordinating building and telecoms regulations to make it easier for all deployers. Neutral hosts are in a strong position to take maximum advantage of these coherent frameworks to accelerate build-out in an efficient way, working with landlords and property developers.
Finally, competition regulators may be involved in approving neutral host models. This has been significant in the macro tower market, and more and more regulators have recognised that shared infrastructure increases, rather than reduces competition because more service providers can afford to enter the market. They are likely to take a similar view in small cells, but as indoor and city networks often fall under the same set of regulations as macro networks, SCF will continue to influence telecom regulators in countries where any kind of network sharing is still restricted or banned.
The best way to influence policy is to demonstrate the benefits – for consumers and the economy – of a scaled-up infrastructure that can support diverse services and use cases. This is what SCF’s many activities aim to enable, and our newsletter is one way to highlight the successes of this work, and to continue to show policy makers the advantages of a progressive regulatory regime for small cells.