Editor’s Note: RCR Wireless News asked wireless industry analysts and executives to provide their predictions for what they expect to see in 2012 across their areas of expertise.
Recently, a lot of people have been asking me: “Will small cells be the end of the macro network?” No way. Small cell growth will be explosive, to match the need for higher data capacity in mobile networks … but the macro layer is still the best way to handle about half of the anticipated traffic on future networks. Despite the short-term issues in the global market, the macrocell business is alive and well.
Across the global market, the demand for mobile data is increasing roughly 75% per year on average (a little higher in the United States and some Asian countries; slower in Europe). To address this tremendous growth, a few mobile operators are deploying LTE aggressively and keeping up with demand, while some others are upgrading capacity too slowly to maintain their share of the mobile market. Already, in some dense traffic zones, mobile operators are pegged at peak capacity for a period of every day.
Let’s focus on network operators that cannot (for regulatory or financial reasons) increase their spectrum holdings.
Options to address the capacity crunch are progressing too slowly for any one idea to solve the problem:
–Upgrades to macro networks (with LTE, active antenna systems, MIMO, higher order modulation, or re-farming 2G services to 3G services) are taking place and will continue to add roughly 20% more global capacity each year (on today’s existing spectrum), during 2012 and 2013.
–Addition of small cells (focusing on carrier-grade versions of femtocells and picocells, and possibly Wi-Fi) can add another 20% to 50% improvement in overall capacity, depending on the density of the network underlay.
Overall, it’s clear that both macro overlay and small-cell underlay networks will be necessary in order to meet the real-world combination of mobility requirements and dense traffic demand. Keep in mind that traffic demand is growing at 75% every year, while upgrading networks with a specific solution generally provides a one-time boost in capacity. Mobile operators will be forced to continuously upgrade for capacity through 2016, in order to stay ahead of the curve.
The result will be growth with a changing mix of solutions. Overall macrocell base station transceiver shipments will grow by roughly 4% annually over the next five years, with some base station types declining steadily and new techniques such as LTE, MIMO and AAS systems growing much more quickly. Carrier-grade small cells will grow by 140% annually over the same period, with a focus on key frequency bands and applications.
