Size Matters – and Small is Exciting

The advent of small cell architectures for mobile networks will be driven by the demand for more capacity that cannot be met simply by deploying more equipment operating at additional frequencies in existing macrocell networks. Small cells are critical for enabling the substantial offload of mobile data traffic onto broadband fixed facilities as close as possible to its point of origin and destination, to avoid congestion in radio access networks (RAN). Otherwise congestion will inevitably arise as traffic volumes continue to grow more rapidly than the capacity of shared RANs, even with deployments of next generation mobile broadband systems in existing and new spectrum.

The proliferation of small cells will create opportunities for new forms of localized and personalized services. They will also fuel the establishment of creative business models. Regulators and competition authorities will be called upon to adjudicate which of these models and relationships are acceptable. Policy makers will have to decide whether new or modified policies, rules, and procedures from the very local to the national level are needed to maximize the value that small cell architectures can deliver to foster a nation’s overall economic and social objectives.

The two major paths to implementing small cells are Wi-Fi and femtocells. Wi-Fi is already widely established in public “hot spots” and private residential and business areas. It has strengths in terms of low cost, ubiquity and independence from operators. For example traffic sent over a Wi-Fi connection does not counttoward any data caps that the customer’s mobile operator may impose. On the other hand Wi-Fi capability in a mobile handset requires a second radio and typically shortens battery life.
Over time Wi-Fi is becoming more widely available, flexible and useful in multiple respects:

1. Higher capacities with new generations of equipment (802.11n)
2. Completely open access for anyone in a building, with no password or other identification required.
3. Closed access requiring a password that is issued on request, sometimes for a fee and sometimes in exchange for the user’s validated email address.
4. Commercial access through a service provider, either using an online credit card or voucher
5. Commercial access through a roaming agreement with a Wi-Fi access aggregator (such as Boingo, iPass etc.) Some of these systems are seamless and automatically register and authenticate the user’s mobile device.

The real breakthrough in getting mobile subscribers and offloading traffic onto Wi-Fi networks wherever possible may lie in connecting them to Wi-Fi networks automatically, eliminating discovery and login processes that in some cases have been quite complicated, and implementing roaming mechanisms to enable seamless handovers between Wi-Fi and cellular networks. 

In contrast in their first incarnations femtocells have typically been confined to application as residential gateways to provide coverage to customers in their homes if macrocell coverage there is poor or non-existent. So far their higher costs compared to Wi-Fi have been a significant disadvantage, despite somerelative advantages that include:

1. They work with all handsets
2. They do not require the customer to configure the device or use special settings such as may be necessary for the use of Wi-Fi connections
3. They operate in licensed spectrum, allowing the operator to provide seamless continuity and handoff with the macrocell network and to maintain QoS (quality of service)
4. They do not increase battery drain.

The future of femtocells is now being looked at in a different context, i.e. the deployment by operators of small cell architectures to meet rising traffic demands in “hot spots” within traditional macrocell networks such as arise for example in airports, train stations, convention halls, sports stadiums etc. The need for such small cells is expected to become increasingly acute during this decade as the penetration of smartphones and use of video-intensive applications and services continue to grow. It is expected that as femtocells begin to shipin greater volumes, their wholesale and retail prices will decline.

The locations in which small cells will become increasingly important fall into several categories. Trust is very important because it allows security to be setup for commonly used locations rather than relying on ad-hoc, often unencrypted and insecure arrangements. Locations ripe for small cell solutions include:

1. Trusted indoor locations
2. Untrusted indoor locations
3. Outdoor stationary locations
4. Outdoor slow moving locations
5. Transportation systems

In contrast to these locations or usage environmentsthere are two other environments in which the use of small cells does not make sense.

1. Outdoor fast moving locations
2. Outdoor rural sparsely populated locations

The prospect of the deployment of many femtocellsand/or next generation operator-managed Wi-Fi (with handover to cellular networks) in large buildings and enclosures raises the question of whether it makes sense for every operator, for example in a four operator market, to have its own small cell in each location, with separate infrastructures within and connecting to the location. It might be much more sensible to have one shared small cell in each location.

Furthermore this approach may create opportunities for very local operators who lease capacity to major regional or national operators and may themselves offer very localized and personalized services.

Future small cells are likely to involve a mix of femtocells and Wi-Fi, whose strengths and limitations as described above are in many respects complementary. The development and deployment of small cell architectures, which will become an imperative as traffic volumes continue to grow, pose tremendous challenges to operators and their traditional macrocell architectures. These operators already face major demands on their resources to deploy new LTE systems while continuing to expand their HSPA networks and manage spectrum refarming so they can continue to serve 2G-only customers.

At the same time operators’ traditional business models are being called into question as revenues per Mbyte fall and OTT (over-the-top) players present themselves as competitors and/or partners. “Interesting times” for the mobile sector is a mild description for the far reaching “climate change” which will affect its landscape over the next decade.

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