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Facing increasing resistance to building more cell sites along with new services that demand much higher network capacity, mobile operators are looking for alternative ways to build out their infrastructure. This is changing the relationship between mobile operators and equipment vendors.
In the old days, when mobile infrastructure consisted of macro towers, there were three major vendors who sold macro base stations and mobile operators could simply turn up new service by adding additional radios at the cell site. Now, however, mobile operators are looking at rolling out 4G services that demand more sites than the existing macro tower infrastructure can supply. This has opened up the market to new infrastructure approaches and new technology options for mobile operators. Breaking the dependency between the core network and radio access network offers mobile operators greater flexibility in design and financial expenditures while enabling the ability to offer best-in-class solutions not tied to a single equipment vendor.
Why macro towers alone aren’t enough
When service frequencies were relatively low and signal propagation was good, macro towers were the simplest and most economical way to provide service in a given area. But 3G and 4G services require greater signal strength for higher capacity services.
As a result of the demand for higher capacity, it has become necessary to move the cellular signal closer to the user than is possible with macro towers alone. New infrastructure solutions are needed that allow mobile operators to bring signals much closer to the user and to boost capacity by serving fewer subscribers per cell site.
In addition to not providing adequate capacity, macro towers are falling from favor in some areas because of increasing community resistance to adding more of them. Mobile operators must look for less obtrusive ways to deliver services.
Small cell options
Today, the market abounds with RAN alternatives to macro towers such as picocells, metro cells, remote radio heads, and distributed antenna systems. All of these compete as solutions for 4G network build outs. This explosion in small cell solutions has changed the nature of mobile operator-vendor relationships.
Now, the vendor community has become much broader to incorporate DAS vendors, radio head vendors and metro cell vendors. As a result, mobile operators now have the freedom to choose from a range of systems to meet the needs of any specific deployment, and they have the ability to change their business models to reduce capex.
New business models
Cost sharing is one model that is expanding with the use of small cell solutions. What began as mobile operators leasing space on towers rather than tying up capex in owning their own towers has now become a true infrastructure sharing arrangement. Neutral host operators are in many cases building their own small cell infrastructure and then leasing space on it to one or more operators. The multi-frequency capabilities of DAS systems in particular make such neutral hosting operations feasible. Sharing arrangements vary and may include the fiber or cable infrastructure, the street or pole fixture to house the DAS, the small cell or radio head, the amplifiers themselves or the antennas.
In fact, by turning to a neutral host operator or system integrator for design and build expertise in small cell systems, mobile operators can save further by not having to maintain the in-house expertise needed to build these systems.
And it isn’t just neutral host operators who are enabling cost sharing. End-users or private entities such as building construction and management or university campuses are sharing their own resources with mobile operators to divide the cost of deploying a system. For example, the university may provide in-ground fiber or space for equipment inside or outside of their buildings while the mobile operator provides the radios themselves.
Simply put, the vendor landscape has changed for mobile operators because of the need for small cell solutions. There are more vendors to choose from offering either or a combination of equipment and professional services, competition is impacting prices, business models are changing, and mobile operators have new options for delivering 4G services.
