Are small cells important?

By Dimitris Mavrakis

The Femto Forum has rebranded as the Small Cell Forum, signaling its coming of age and evolving from its established home environment to enterprise, public, metro and even rural locations. But are small cells going to be bigger than femtocells?

Small cells were a big thing during last year’s MWC but obviously there are several technical and business challenges to overcome before they become mainstream. Nevertheless, small cells are particularly useful in many situations where operators need low-mobility and/or high capacity coverage and these are the areas now targeted by the Small Cell Forum.

Home of the femtocell

Femtocells have been established in the home environment, albeit not as widely as the industry or analysts expected, primarily due to high costs for Femtocell Access Points (FAP) and cultural issues at operators’ planning departments. Femtocell shipments are estimated to have reached the 2 million mark sometime during half-2011 largely driven by residential applications and Vodafone, AT&T, Verizon Wireless and Sprint are examples of large scale femtocell deployments which use the technology for coverage blackspots.

Coverage was expected to be only the first step in a femtocell deployment. The next steps were capacity offload followed by femtocell specific services (primarily location driven) which did not materialize in time, perhaps due to the success of wifi for traffic offload and the uncertainty in the business success of femtocell services.

In a way, residential femtocells have become a commodity which are indirectly associated with the operator business case through churn reduction and improved user experience, but this may not be enough for many operators, thus limiting economies of scale which would bring down femtocell costs considerably. Since femtocells have found their “home” market – which is smaller than expected – what’s the logical next step for the evolution of the technology, the Femto Forum and relevant vendors?

The “bigger” picture

The Small Cell Forum will now cover residential, urban, enterprise and rural small cells which present a much bigger market and elevate the addressable cell size from femto to pico, metro and even micro. Each of these key markets present interesting challenges but also provide considerable growth opportunities for femtocell and larger infrastructure vendors. Indeed, rural small cells and metrocells address two key areas that were largely driven by bigger macro cells while small cells can create the necessary economies to promote faster and more aggressive deployment.

The challenges facing the Small Cell Forum have now increased in breadth:

These practical challenges are formidable, albeit necessary to be addressed for the successful and quick rollout of small cells in the market. The role of the Small Cell Forum is now closer to the mobile operator business case through these practical issues and also closer to traditional deployment mechanisms rather than user-installed, auto-provisioned Customer Premises Equipment (CPE).

So in a way, the Small Cell Forum graduates from infancy and enters a more challenging world that comes with many problems to solve. Small Cells – through operator interest, vendor activities and now the Small Cell Forum – will be much more important than femtocells and will be a key component of LTE and subsequent radio networks. Small cells are not a new concept; cell splitting has been widely used to tackle capacity-constrained areas and small cells capitalize on the need for capacity or coverage infill to complete the technology and practical issues as outlined above by the Small Cell Forum.