Mobile operators need to cost effectively expand their network
coverage for voice and data services to remote and rural areas
where wireless or terrestrial technologies can’t reach
The combination of Small Cell technology plus a variety of
backhaul techniques can make connecting rural customers
All operators have service areas where they can’t cost effectively
provide coverage. Based on different business drivers operators are
increasingly looking to expand coverage using satellite
• Offer service to gain more
• Meet government mandates
• Avoid customer churn
• Expand data services to
• The Internet of things
e.g. Ericsson’s view of the connected world
50 Billion devices by 2020
Where are the Opportunities?
Everywhere – Developing world and Developed world
Why Not Use Macro Cells?
Not In My Back Yard!
Economics of macro cells don’t work
well for small communities
More profitable to install one public
access small cell than many
residential small cells
Community ‘ownership’ leads to
What is a Rural Small Cell?
Residential small cell typically support 4 calls
and limited range (e.g. 30m)
Mobile operators have built the infrastructure
to support small cells (gateway, security,
Leverage that infrastructure to support larger
small cells in outdoor housing for rural
coverage (16 – 32 calls, HSPA, 1 – 2 km
What’s Needed to Install a Small Cell?
Just need a building owner to agree to locate a couple of small
boxes on their premises – store, post office…
Perhaps100 watts total possibly with battery backup
Solar / wind / fuel cells very feasible if off-grid location
The big issue – typically no DSL, or too slow if available
Maybe too far from microwave hub
Fiber or leased line too expensive… So what to do…?
How to Backhaul Rural Small Cells?
Not as easily connected through traditional means, a lot more
small sites, a lot lower cost per site
For rural cells more difficult to use microwave or line of site
technologies as we’re not using large towers
Rural Small cells will probably use a variety of technologies for
DSL – if available and not too slow
Point to Multipoint microwave
Satellite – Reaches Everywhere
What Do Operators Think?
Which of the following do you think
represents the greatest challenge in providing
Lack of demand/user base
Cost of base station/Node B
Cost of building backhaul
Availability of affordable handsets and
Challenging business model due to
We are educating mobile operators:
Small cells drastically reduce capex
Backhaul opex no longer a barrier, including satellite
Source: Informa UK Ltd.
Business Case – Assumptions
Radius of the cell is 1km,
the total number of properties is 266.
There are two subscribers per household = 532.
Business Case – Traffic
Total busy hour 7.98 erlangs.
A blocking of 1% will require 15 channels.
15 voice channels at 40 kbit/s per call = 600
For data the busy hour load will be within the
scope of an HSPA small cell with up to 11 Mbit/s
The uplink requires 1/3rd the capacity and would
also fit into the possible capacity of a typical
HSPA 5 Mbit/s uplink speed.
Total capacity required 11.24 Mbit/s
Business Case – How Much Revenue?
Typical developed world monthly ARPU at $33 the 532 subscribers
would deliver revenues of $17,556 / month.
Typical total costs of $6000 for a fully installed outdoor small cell
site. Amortized over 3 years the cost per month would be $167.
Site rental, power and maintenance add up to $157 / month.
Taking the 3-year amortized capital cost plus the operating costs
gives a total cost to run a small cell site of $324 / month
Over $17,000/ month per site to pay for backhaul b/w and
the core network etc…
Business Case – The Satellite Case
Taking satellite as the most extreme backhaul example:
The satellite h/w cost - typically $3k - $6k per site linked in
capex, i.e. $100 / month
Satellite bandwidth: e.g. HTS satellite capacity selling at around
$1000 / MHz / Month a typical rural site needing 11.24 Mbit/s
would require less than 7.5 MHz of satellite capacity using A-TDMA
Thus the monthly cost in this scenario would be $7,500 – leaving
>$9,000 per site gross margin
Bottom line – even after paying for the core network,
customer acquisition, interconnect costs etc. it is highly