The small cell market has seen its share of ups and downs in the past few years, with initial hype for the technology not panning out as quickly as many had hoped. But 2015 seems to have been a turning point for small cells, and a number of industry analysts are predicting small cells are finally gaining steam.
Here are half a dozen recent predictions for the small cell market going forward. Keep in mind many of these are not precisely apples-to-apples comparisons, as they may or may not include various pieces of the market that can be considered “small cells” depending on how they are defined. Small cells can include everything from standalone mini base stations such as pico and femto cells, distributed antenna systems, carrier Wi-Fi and increasingly cloud radio access network architectures. In general, all types of small cell networks are expected to see growth as part of a more heterogeneous, distributed and dense mobile network – as seen in the following predictions:
-ABI Research’s most recent look at the small cell market estimated a 43% compound annual growth rate for the technology as more operators seek to significantly densify their networks.
“Meaningful small cell deployments are coming,” said Nick Marshall, research director at ABI Research. Small cells ramped up in 2015, according to ABI, and Marshall added that a number of vendor services such as the former Alcatel-Lucent’s small cell site certification program and Metro Cell Express, Nokia’s HetNet Engine Room, Ericsson’s Small Cells-as-a-Service and Huawei’s Crowd-Sourcing Small Cell solution are helping operators to solve small cell challenges that had previously stymied deployments.
ABI said LTE small cells doubled last year and will continue to grow at a comparable rate in the coming years, to the point that “in 2020, the value of LTE small cells will represent more than 85% of the small cell equipment market.” The Asia-Pacific region, which has been a leading area for small cell deployments, will represent nearly 50% of the worldwide small cell equipment market by 2017, ABI said.
-In a small cell market statistics report for Small Cell Forum released this month, Mobile Experts reported urban small cell shipments grew 280% in 2015, and nonresidential small cell shipments accounted for 66% of small cell market revenues last year. Mobile Experts estimates enterprise small cells will grow by 270% in 2016, and urban small cell shipments will increase 150% – and the overall small cell market will have revenues of $6.7 billion by 2020.
-Looking specifically at backhaul for small cells, IHS Infonetics Research recently predicted that $6.5 billion, cumulatively, will be spent on outdoor small cell backhaul equipment between 2015-2019. IHS said from about 75,000 outdoor small cell backhaul connections in 2015, the market is expected to grow to 960,000 connections in 2019.
-Signals & Systems Telecom put out a recent report predicting operators will spend nearly $13 billion on small cell, C-RAN, carrier Wi-Fi and DAS by the end of this year. SNS Research expects the market will grow at a 15% CAGR over the next four years. SNS has also looked specifically at the C-RAN portion of the small cell market, and estimates C-RAN alone will reach more than $7 billion in 2016, with a near 20% CAGR between 2016 and 2020, including spending on remote radio heads, baseband units and fronthaul.
-Giving some more specific context on indoor capacity needs and the outlook for DAS, ABI said the increasing use of both Wi-Fi and “4G” cellular connectivity indoors will cause indoor wireless data traffic to leap more than 600% by 2020. As operators try to deal with that growth, ABI predicts the in-building wireless market will more than double in the same timeframe, to reach around $6 billion. In that research, Marshall of ABI said North America will continue to be the biggest market for DAS spending, with the top verticals for DAS being sports venues, transportation facilities and health care facilities, with shopping malls and the hospitality vertical coming in just behind.
-Dell’Oro Group anticipates small cells will be the primary driver of growth in the overall RAN market in 2016, and noted the nonresidential small cell market approached $1 billion in 2015. Huawei, Ericsson and Alcatel-Lucent (now part of Nokia Networks) were revenue share leaders last year. Dell’Oro predicts that although small cell growth will be robust this year, “growth will not be sufficient to offset declining macro business and the total RAN market will undoubtedly decline in 2016.”
“China and the Asia-Pacific region were major drivers of the surge in small cells in 2015, but what was interesting was the demand for small cell equipment was greater than we had expected outside of China as well,” said Stefan Pongratz, analyst at Dell’Oro Group, in a statement on the research. “This reflects a change in the general attitude toward small cell and the role this technology will play, as the carriers have exhausted all viable options on the macro network.”
For more information on the momentum of the small cell market, check out RCR’s in-depth special report Getting Small Cell Networks Right.
