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Report: There's money in them thar small cell networks

Wed, 03/12/2014 - 12:50pm
Brian Santo

Mobile network operators (MNOs) have been working with rival communications service providers for years to deal with rising amounts of wireless broadband traffic, yet MNO adoption of small cell technology will create a substantial new revenue opportunity available to cable MSOs and satellite providers to provide even more cellular backhaul support.  

While the first deployments of small cell networks and Wi-Fi networks for backhaul might start this year, the rollout is likely to be gradual and to extend through the next three to four years or more. According to a survey conducted in January by Real Wireless and sponsored by Amdocs, 70 percent of MNOs surveyed plan to have significant small cell deployments by 2018, but the majority predict slow rollout.

MNOs are open to partnering on cell backhaul. In the U.S., many of the largest wireless operators are already partnering on cable operators to provide tower-based backhaul. According to the survey, 70 percent of MNOs globally are prepared to also use small cell networks rolled out by or owned by a third-party, such as an MSO.

In order to succeed, MSOs still have to recognize and capitalize on their small cell expertise. The survey reveals that 85 percent of MSOs believe that technical aspects of small cell rollout are different from their normal deployments, and as a result only 40 percent of MSOs have plans to support small cell deployments this year.

This is surprising, the Amdocs report says, given that 70 percent have either already launched or plan to launch public Wi-Fi, which has very similar requirements to small cells in terms of backhaul, power and installation.

The report also notes that automation tools will be critical. The vast majority of respondents (85 percent) believe that automation is critical or important for small cell deployment; 80 percent believe their existing processes and tools are inadequate.

“With mobile data traffic predicted to increase 11-fold from 2013-2018 small cells represent a critical element of an MNO’s strategy to expand mobile network capacity and improve the overall user experience, yet rollout challenges are causing small cell deployment delay,” said Charles Chambers, managing consultant with Real Wireless. “The research has identified that there is a clear business case for MSOs to partner with MNOs. MSOs have valuable skills and experience that can be applied to small cell deployments and MNOs are looking for these skills. However, for small cell rollout to be successful it’s widely recognized that appropriate workflow and planning tools are required.”

Amdocs’ interest in sponsoring the research is tied to its Small Cell solution. That product line can help reduce network design and deployment time and costs, according to Rebecca Prudhomme, Amdocs vice president of product and solutions marketing.

Furthermore, supporting small cell-based backhaul dovetails with MSOs’ own ambitions, she said. “While this research indicates that there are many reasons why MSOs should partner with mobile service providers to provide backhaul, automated small cell rollout is also important for MSOs as they expand their Wi-Fi footprint and upgrade their Wi-Fi networks.”

The survey conducted by Real Wireless included 40 national and large regional MNOs, MSOs and converged wireless/wireline operators from North America, Europe and APAC. The report is available for download here.

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