Assessments of the small-cell market opportunity for infrastructure vendors are overlooking key factors when determining the market's actual potential.
That's a new warning from Ovum analysts, who say that defining the small-cell market opportunity is more complex than originally thought; for example, deployments using real-estate assets that operators aren't accustomed to, and whether or not the market can support the many vendors pursuing small-cell deployment.
Ovum says that although no single definition of the small cell market fits all vendors, it should be defined based on small-cell applications rather than technology. Wi-Fi should be considered a small cell as infrastructure vendors incorporate Wi-Fi support into their overall heterogeneous network strategies.
This interest will see carrier Wi-Fi gear shipments grow by 84 percent in 2012, the company predicted, and it will continue double-digit growth to 2017.
“The majority of interest in the small-cell market today is surrounding the capacity gains of small cells being deployed in a heterogeneous network (HetNet)," said Daryl Schoolar, principal analyst in Ovum’s Network Infrastructure Telecoms team. “The reasons for this are very clear: As mobile traffic continues to grow, the economics of deploying more macrocells to meet this traffic growth do not add up long term," he added. "Small cells promise to provide much-needed capacity injections at a lower cost."
Ovum advocates network sharing for mobile operators when physically deploying small cells. Schooler said that it would be difficult for multiple operators to deploy more than 100 small cells in a city, and governments could legislate sharing to "avoid excessive cluttering."
Another factor that can limit vendor's opportunities includes operators’ willingness to have different macrocell and metro cell vendors in a single market, Ovum said. Using multiple vendors could make integrating metro cells into the macro network difficult, especially if the macrocell vendor has no reason to cooperate.
“While Alcatel-Lucent, among several vendors, may see small cells as a way to gain ground in markets where it isn’t the macro vendor, it is far from certain that mobile operators are interested in this type of arrangement," said Schoolar.