On Wednesday, market research firm Infonetics Research forecasted that the global small cell market will be worth $2.1 billion in 2016, with about 3 million small cells shipped.
In the report Infonetics (Campbell, Calif., USA) tracks small cells made by five major RAN vendors—Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks, and ZTE—as well as small specialists such as ip.access, Contela, Juni and others.
According to the report, small cell market growth is being driven by operators seeking to enhance saturated macrocellular networks that are currently struggling to maintain a decent mobile broadband experience for subscribers. As a result, for the next 3 years or so, most operators are planning small cells only in the urban core.
“While small cells, including microcells and picocells, have been used for the past two decades to improve voice coverage, now mobile broadband is shifting the game to capacity upgrades,” says Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. “Therefore, the chief objective is to complement and enhance the macrocell layer from a capacity standpoint with a new breed of low-power nodes like public space femtocells and WiFi. But dividing the macro layers into smaller cells remains challenging due to inter-cell interference and backhaul issues.”
According to Téral, the size of a typical small cell is what will dictate the size of the market. A smaller cell means a higher number of units will be required to cover an area, and that will determine the real size of the overall market and its deplotments.
Infonetics expects public space femtocells to make up more than 50% of all small cells shipped in 2012. In 2013, 3G small cells are expected to make up 63% of global small cell shipments, with 4G small cells kicking off and ramping up rapidly to make up 37%. Infonetics predicts 4G small cells will overtake 3G small cells by 2015.
From a geographic perspective, early femtocell adopters such as AT&T (Dallas, Texas, USA), Softbank (Tokyo, Japan), and Vodafone (London), as well as macro network density, dictate which regions represent the largest small cell opportunities. Based on this, Asia Pacific is expected to lead with 44% of all units shipped in 2012, followed by EMEA with 32%
“Our small cell forecast is not a pie-in-the-sky, new-technology-honeymoon forecast based on futuristic 2020 technology visions of small cells on every city block. We developed our forecasts after a solid year of work,” says Michael Howard, principal analyst and co-founder of Infonetics. “We examined, discussed, challenged, and listened--often on multiple occasions--to the major footprint operators to learn about their thinking, planning, testing, and trialing across their realities of today's operations, budgets, target small cell pricing, sizing and form-factor requirements, emerging technology issues, location-sensitive pico-to-macrocell ratios, and small cell layer automation and coordination with the macro layer. And in all of this, we explored with them what they think is realistic over the next few years.”