At a time when ubiquitous indoor connectivity has become an essential requirement, small cells have emerged as the preferred infrastructure solution. These cells provide telecom connectivity in weak network connectivity areas, typically enclosed premises such as residential buildings, offices, shopping malls, restaurants, hotels, hospitals, airports and railway stations. The deployment of these cells enables network densification, particularly in urban areas, and enhances network capacity without additional spectrum.
For telcos, small cells offer advantages like enhanced penetration and improved indoor service provisioning and, thus, incremental revenues. For towercos, the small cell opportunity comes as a shot in the arm at a time when they are battling with tenancy losses owing to consolidation among telcos. Going forward, as the telecom sector leapfrogs into the 5G era, small cell deployments are expected to gather more steam as they are essential for delivering a reliable and consistent 5G experience.
A look at the small cell market and the burgeoning opportunities in this space…
Market size and growth
According to industry experts, the global small cell market is expected to reach a valuation of around $3,495 million by 2025, recording a compound annual growth rate (CAGR) of over 37.2 per cent between 2019 and 2025. Further, a study by the Small Cell Forum (SCF) reveals that the number of indoor small cell deployments is expected to reach 5.6 million globally by 2025, significantly higher than outdoor small cell deployments, which are expected to reach 2.76 million during the same period.
Role in 5G roll-out
Small cells are emerging as an essential component in the 5G roll-out strategies of telcos. 5G deployment requires radio equipment to be closer to the consumer than it is in 3G or 4G networks, which makes small cells a natural fit for 5G roll-out. At present, telcos are focusing on deploying small cells in low frequency bands for delivering improved bandwidth to customers. However, post-2021, the small cell network is expected to expand on the back of increased adoption of IoT and M2M technologies.
In fact, a report by SCF predicts that small cell deployment is expected to witness a CAGR of 80 per cent between 2019 and 2025. With the launch of 5G, indoor small cell deployments will reach 3.5 million by 2025. Meanwhile, the size of the global small cell 5G network market is expected to increase from $528 million in 2019 to $3,509 million by 2025.
Telcos scale up deployments
Since the deployment of small cells offers numerous advantages, telcos in India have been scaling up their deployments during the past few years. Reliance Jio has been at the forefront of small cell deployments with its exclusive partners Samsung and Airspan. The operator has been rolling out the technology early to modernise its network.
Vodafone Idea Limited too has been focusing on indoor coverage and has started deploying small cells on a large scale. As part of its modernisation and network upgradation exercise, Vodafone Idea has deployed more than 5,000 massive multiple input multiple output (MIMO), small cell and time division duplexing (TDD) sites across Mumbai, covering Churchgate, Prabhadevi, Pali Hill, Lokhandwala, Versova, Andheri, Jogeshwari, Bandra and Dadar, among other regions. Apart from this, Vodafone Idea has set up over 6,600 massive MIMO, small cell and TDD sites in the Madhya Pradesh and Chhattisgarh circle. The operator has also set up 8,400 massive MIMO, small cells and TDD sites to enhance coverage and network capacity in Delhi NCR. Recently, Vodafone Idea deployed over 2,100 small cells in Delhi NCR for improving the experience in congested areas such as Govindpuri, Gandhi Nagar and Lakshmi Nagar. By and large, Nokia has been undertaking the deployment of small cells, and single radio access network (RAN) and massive MIMO technologies for the operator.
Bharti Airtel too has been active in the small cell space and has been scaling up deployments to build a future-ready network. Apart from deployments, Airtel has been actively involved in developing innovative small cell solutions. Recently, Airtel, in partnership with Sercomm, a leading Chinese manufacturer and supplier of telecom equipment, has launched the world’s first virtual RAN-based TDD small cell. The small cell offers a plug-and-play approach for the cloud radio network connection. The small cell will deliver enhanced efficiencies, improve operational reliability and facilitate a heterogeneous network.
An attractive opportunity for towercos
For towercos, offering small cell solutions to telcos presents a revenue generating opportunity and a new growth avenue. Towercos’ know-how in securing contracts from municipalities for small cell sites can enable them to strengthen their value proposition. Further, they can explore fiberised small cells, which would position them as integrated players.
Globally, towercos are already adding small cells to their inventory of site typologies, mostly functioning as site acquirers while small cells are owned by telcos. According to T.R. Dua, director general, Tower and Infrastructure Providers Association, “A bigger opportunity lies where towercos acquire and own their small cells, and offer fiberised small cell sites to telcos.”
In India, Indus Towers and Bharti Infratel have stated that their combined entity will explore new growth areas such as fibre sharing, small cells, data centres and Wi-Fi offloading. Further, Indus is planning to deploy around 30,000 smart small cells in India in the near term. As per the tower infrastructure provider, India’s Smart Cities Mission has provided towercos an opportunity to add a layer of smart connectivity to urban landscapes. Indus Towers has been actively involved in developing scalable models for smart cities. The deployment of small cells is a key strategy in this regard.
Challenges and the way ahead
Although small cell deployment is slowly gaining momentum, a few challenges need to be addressed for ensuring smooth roll-out. For one, undertaking small cell deployments on a large scale requires the development of suitable solutions for their backhaul. There is no one-size-fits-all solution for small cell backhaul and a trade-off among capacity, coverage and cost is often inevitable. While backhaul technologies such as bonded copper, fibre and wireless microwave are being adapted to serve as backhaul networks for small cells, each of these has its advantages and disadvantages. Fibre connections may provide the highest throughputs, but they can be expensive in the absence of an established infrastructure. Meanwhile, wireless requires navigation through varying line-of-sight conditions.
In this scenario, the most promising solutions for meeting backhaul requirements for small cell deployment are mmWave technologies including E-band (70-80 GHz) and V-band (60 GHz). E-band is suitable for small cell links of 300-500 metres. It offers a wide spectrum range (10 GHz) and very high capacities similar to fibre. E-band also solves the spectrum congestion problem in urban and suburban areas. Meanwhile, V-band is suitable for links in the 300-500 metre range and reduces intersystem interference. However, the government will have to make this spectrum available for operators in order to leverage its potential to improve backhaul networks. Besides backhaul-related issues, small cells create complexities in network design and operational processes. Moreover, telecom operators need to identify new locations to deploy small cells, acquire permits for these locations, and bear operational costs to lease, deploy and maintain these sites. In many countries, the time taken by local authorities to approve planning applications for small cell implementations is 18-24 months.
Challenges notwithstanding, the small cell space is projected to grow by leaps and bounds in the coming years. A key factor driving the surge in small cell roll-outs will be the launch of 5G services. It is important for stakeholders to develop a viable business model for setting up independent small infrastructure companies to deploy small cells, which could be shared among communication service providers in the future. Besides expediting 5G roll-out and enhancing coverage, such a model could lower the capex for telcos that are already from severe debt and investment commitments. On the government’s part, small cell roll-out will have to be supported by enabling policies and a proper framework for identifying the best sites for small cell deployment, speeding up the approval process, and keeping deployment costs in check. These measures could go a long way in expediting small cell deployments and ensuring ubiquitous network connectivity.