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Enterprise Small Cell and Shared Spectrum: Forecast 2014 to 2022

Enterprise Small Cell and Shared Spectrum: Powerful Weapons Against the MNO Model

Shared spectrum will trigger new “challengers” to the MNOs…

RAN Research, the Wireless forecasting arm of Rethink Technology Research, is forecasting that the rise of shared spectrum and protocols like LAA and MulteFire, will lead to a whole raft of new threats to existing cellular operators.

The rising popularity of enterprise small cells will mean that by 2022, enterprise units will account for almost half of all small cell deployments, up from 7% in 2014. The installed base will reach 14.8m in 2022, up from 185,000 in 2014 and owners who invest in enterprise small cells will operate a financial grip on the market in the 2020 time frame.

There will be a rise in the importance of unlicensed spectrum driving enterprise and vertical small cells to scale with LTE-LAA roll-outs starting in 2018 and the more disruptive MulteFire running about 9-12 months behind.

By 2020 these two will account for 25% of all new deployments.

Caroline Gabriel, director of research at Rethink Technology Research, concludes that enterprise small cells, particularly those operating in unlicensed spectrum, could be the undoing of Mobile Network Operators, relegating them to “utility” commoditization, and falling revenues, as both license free spectrum and shared spectrum ideas, are taken up aggressively by newcomers.

This is one outcome foreseen in the latest report from Rethink in its RAN Research Service, which forecasts revenues in the Radio Access Network (RAN) space, the largest part of in cellular spending, extracts of which can be found here

In “Small Cells and Shared Spectrum: Powerful Weapons Against the MNO Model” there are clues that MNOs who have been so far averse to sharing resources, will become urgently driven by densification initiatives.

By 2018 the desire to keep costs down will show in MNO’s willingness to finally work with third parties. These third parties, as a result, will be able to build out their own networks.

Small cells were conceived as a way to improve the mobile operator business model, but they may now become weapons for challengers to MNOs, particularly broadband players with established backhaul such as Cable operators.

Established MNOs have so far been slow to embrace network sharing. Now they may lose the initiative in favour of neutral hosts, cable operators and private network operators. These can harness a combination of enterprise small cells and unlicensed spectrum, to build their own localized networks which will target much of the highest value usage.

Arenas, transport hubs, enterprises and municipalities will be the natural targets for densification, but a new kind of MVNO is likely to emerge, with their own small cell assets in one particular geography.

Vendors large and small are developing ‘network in a box’ offerings which can be deployed quickly for temporary requirements, or can support a self-contained network, with full mobile core and RAN functionality, on a localized piece of equipment. This might be a small cell or a local server. Quortus and Core Network Dynamics, two specialists in this field, have both demonstrated virtual packet cores on cheap processing boxes.

Larger players like Nokia are developing platforms to support private and enterprise service providers, and the large vendors increasingly look poised to cut out the MNO where they can monetize the industrial users directly.

Regionally, there will be different patterns of deployment, though the Asia-Pacific region will be the powerhouse throughout the period accounting for 55% of unit deployments in 2022, maintaining a similar share throughout the period. The highest CAGR rates will be seen in Africa, at just over 100%, and CALA, at 86%, but starting from a very low base.
This is the moment when the MNO risks being forced back to being simply a utility, as electricity generation or railway networks were before them.

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Introductory Note

  1. Enterprise small cell deployment patterns

– Figure 1 (Table 8). New deployments of enterprise and vertical small cells by form factor

The urgent need for neutral host platforms

Neutral host will drive significant growth after 2018

– Figure 2. New deployments of small cells (all types) and enterprise small cells 2014-2022

– Figure 3 (Table 4). New enterprise and vertical small cell deployments by region 2014-2022

  1. The disruptive potential of small cells +unlicensed spectrum

– Figure 4 (Table 5). New deployments of enterprise and vertical small cells by technology

  1. New business models enabled by small cells, neutral host and spectrum sharing

Rural and remote deployments point the way to a new market structure

Small cell subnets enable non-spectrum owners to challenge MNOs

– Figure 5 (Table 9) Enterprise/vertical small cell installed base, by operator type deploying or managing

– Figure 6 (Table 10). Enterprise and vertical small cell installed

– Figure 7 (Table 11). Enterprise and vertical small cell installed base by industry sector

  1. Small cells and WiFi move towards a converged 5G path

– Figure 8 (Table 6). New deployments of small cells, including their relationship to WiFi

– Figure 9. Comparison between 5G and 802.11ax requirements indicating close alignment of roadmaps.

  1. Methodology

 

Tables in an accompanying Excel file:

New deployments of enterprise and vertical small cells 2014-2022
New deployments of enterprise and vertical small cells by environment
Enterprise and vertical small cell installed base
New deployments of enterprise small cells by region
New deployments of enterprise and vertical small cells by network technology
New deployments of enterprise and vertical small cells, relationship with WiFi
New deployments of enterprise and vertical small cells, by location
Enterprise and vertical small cell deployments by architecture
Enterprise and vertical small cell installed base, by operator type
Enterprise and vertical small cell installed base by venue (exc home office)
Enterprise and vertical small cell installed base by industry sector

Rethink predicts;
• Small cells will emerge in unlicensed spectrum, based on technologies like LTE-Licensed Assisted Access (LTE-LAA) and MulteFire
• They will also emerge in shared spectrum such as the US CBRS band in 3.5 GHz
• These will provide non-MNOs with the ability to deploy their own networks without having to invest in spectrum or a wide area network by simply adding an MVNO deal
• New challengers will undermine the traditional MNO model, which relies on control of expensive licensed spectrum, and will prompt the established operators to hit back with their own densification initiatives.

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