When will small cells be deployed


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This case study was designed to help answer important questions related to small cell deployments. It is based on a traffic forecast and capacity planning tool developed to aid operator strategic planning activities. The tool can also be used by vendors and other ecosystem players to map their product offering and plan for small cell deployments.

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When will small cells be deployed

  1. 1. When Will Small Cells Be Deployed:A Case Study of Critical StrategicPlanning Options for MobileNetwork Operators.This case study was designed to help answerimportant questions related to small celldeployments. Demand for mobile data servicesis expanding at a rate ranging between 30-60%per year. Subscribers have a choice betweenmany different plans and mobile devices.Networks feature multiple technologies (e.g.2G/GSM, 3G/HSPA, 4G/LTE) operating indifferent frequency bands. All this hascombined to increase the complexity oftechnology planning. Outdoor compact basestations operating at low elevation aboveground using licensed frequency spectrum formsmall cells that work to fill the projected gapbetween the supply and demand of mobile datacapacity. This case study serves to illustratesome strategic options to consider whenmaking small cell buildout decisions. It builds onnumerical models to answer a fundamentalquestion: when are outdoor small cells needed?It also illustrates the factors that impact thenumber of required small cells, the effects ofWi-Fi offload and other strategic technologyoptions such as spectrum.Scenario Description: The analysis focuses onthe downtown core of Toronto, Canadas mostpopulous city. The area measures 7 km2andhouses over 77 thousand residents in additionto tens of thousands of commuters who flock tothis area on a daily basis to work in manycorporate offices, particularly in the financialsector, government, hospitality, retail, andother service industries. The area is selectedbecause the subscriber density is highest. Oneexpects small cells to be required in this areabefore other, less dense areas (although this isnot necessarily true because density improvesthe economies of competing techniques such asDAS, cloud-RAN and WiFi).The area is covered by a total of 59 three-sectored macrocells for a total of 177 sectors,as shown in Figure 1, and five microcells atheight lower than 15 m. All macrocells canoperate both LTE and 3G HSPA technologies.Today, a total of 95 MHz full duplex spectrum isheld by the wireless operator in 800, 1700, and1900 MHz bands. There is potential to acquireadditional spectrum in 700 MHz following theplanned auction in November 2013. Thefrequency allocation also raises the importantCanada – Key Wireless Facts: Wireless coverage reaches 99% of pop. 13,000 wireless antenna sites 60% of all sites are shared 40% of sites are located on buildings otherthan towers Up to 40% – 50% of mobile data isconsumed at homeSource: CWTAToronto – Basic Facts:Populations (2011): 2,615,060Area: 630 km2(240 sq mi)Density: 4,149/km2(10,750/sq mi)Source: Statistics Canada, City of TorontoCanadian Operators – Subscriber Base:Rogers 9,437,000 Wind 590,438Bell 7,681,032 MTS 497,367TELUS 7,670,000 Videotron 402,600SaskTel 607,659 Total 26,886,096Penetration 83%Smartphone penetration (% of postpaid) 62%Source: CWTA, 2012
  2. 2. XONA PartnersWhen will small cells be deployed? 2issue of using 2.5 MHz allocations for HSPAservices in bands such as 800 MHz which has2x12.5 MHz allocation resulting in inefficientuse of spectrum with the 5 MHz HSPA+ channelallocation. We have not considered the addedcapacity resulting from such a feature should itbecome available. The importance of thisfeature will come to play in future spectrumrefarming plans.Subscriber Profile: The analysis considers a mixof subscribers (postpaid, prepaid), types ofmobile devices (smartphones, feature phones,tablets, laptops, and M2M devices), andtechnologies (HSPA, LTE) as shown in Figure 2.Operator market differentiation strategies havea great impact on the type of subscribers andthe carried traffic. Hence, they are incorporatedinto the model.Traffic consumption: Demand for capacityfollows defined patterns characteristic of thetype of subscriber and device type. An exampleis shown in Table 1 which shows significant datausage in smartphones over feature phones.Tablets consume 2.4 times the traffic ofsmartphones while laptop average just over 7times the amount used by a smartphone. Thetraffic volume per device type as percentage ofaggregate network traffic varies betweenoperators and regions. For example, laptoptraffic in Europe accounts for 50-80% of thetotal traffic while in North America, can be afew percent1. In our scenario, smartphoneFigure 1 Total of 59 three-sectored macrocellsites and 5 microcells serve downtown coreoutlined by red boundary line.Figure 2 Subscriber profile hierarchy for handsets.HandsetsubsPost-paidSmart-phoneLTE HSPAFeaturephoneHSPAPre-paidSmart-phoneLTE HSPAFeaturephoneHSPA
  3. 3. XONA PartnersWhen will small cells be deployed? 3traffic remains the predominant type of trafficfor the duration of the analysis period as shownin Figure 3.Table 1 Cumulative average traffic growth rate(2012-2017) and traffic multiples normalized tothat of a smartphone2.CAGR (12-17) TrafficNon-Smartphones 35% 0.02Smartphones 81% 1Laptops 31% 7.36Tablets 113% 2.4M2M 89% 0.18Technology Migration & Offload Strategies:LTE provides about twice the spectral efficiencythan HSPA. This advantage is expected toincrease with the deployment of LTE-Advancedwhere a host of features (for example, eICIC,high-order MIMO, and receiver interferencecancellation) would increase the spectralefficiency of LTE systems beyond the currentdownlink average of 1.8 b/s/Hz. From thisisolated perspective, it is in the interest of thenetwork operator to expand LTE coverage. Inthis case study, we assume the operator willturn off data services on the HSPA network in2019 as shown in Figure 4. Furthermore, Wi-Fioffload and the deployment of in-buildingsystems such as DAS and cloud-RAN solutionswork to reduce mobile network traffic. Marketanalyst estimate that as much as 85% of mobiledata consumption occurs indoors. Theproliferation of these techniques will have alarge impact on the strategies implemented byMNOs to address shortage of network capacityand consequently the deployment timelines ofsmall cells.Figure 4 Subscriber distribution between HSPAand LTE.Capacity Supply and Demand: Figure 5 showsthe aggregate network capacity supply anddemand. The HSPA network is managedappropriately to maintain sufficient offeredcapacity to meet demand. However, in the LTEnetwork, demand for capacity will outstripsupply in 2017. This is when small cells will needto be introduced.Figure 5 Network capacity supply and demand.Number of Small Cells: The deployment ofoutdoor small cells is achieved through amethodical approach. By identifying thelocation of traffic concentration, the operatordeploys small cells incrementally to relieveFigure 3 Total network traffic per device type.
  4. 4. XONA PartnersWhen will small cells be deployed? 4congested macrocells. Figure 6 shows thecumulative number of small cells which includesa ramped-up factor for in-building trafficoffload. Two scenarios are considered: smallcells with 10 MHz and 20 MHz channelbandwidth. While 20 MHz channelizationprovides higher capacity, the limited coveragearea of small cells may not allow the operatorto derive the full benefits of the largerchannelization.Figure 6 Busy hour demand for capacity andcumulative number of small cells required toequalize capacity supply with demand.Summary: Outdoor small cells are one solutionto address capacity deficit in wireless networksamong a host of solutions at the disposal of thenetwork operator. The deployment timelinesfor outdoor small cell base stations, if they areto happen on large scale, have to be consideredin a manner that is line with operator greaterbusiness objectives and market differentiation.Capacity control levers at the disposal ofoperators include the acquisition of spectrumfor LTE services, and spectrum refarming;migration to LTE from older less efficienttechnologies and implementation of roadmapto support LTE-Advanced features; deploymentof Wi-Fi, DAS, and Cloud RAN offload;implementation of data plans and fair-usepolicies to cap demand for data services; anddeployment of caching techniques to reducethe carried traffic. As a result, predicting whensmall cells will be deployed will vary from oneregion to another, and within a region from oneoperator to another.AcronymsDAS Distributed antenna systemeICIC Enhanced intercell interferencecoordinationGSM Global systems for mobilesHSPA High speed packet accessLTE Long term evolutionM2M Machine to machineMIMO Multiple input multiple outputMNO Mobile network operatorRAN Radio access network1Akamai, The State of the Internet, Vol. 5, No. 4, 4thQuarter, 2012 report.2Cisco Visual Networking Index: Global Mobile DataTraffic Forecast Update, 2012–2017. February 2013.Xona Partners is a boutique advisory services firm specialized in TMT. Founded by a team of renownedtechnologists and investment advisors, Xona draws on its founders cross-functional expertise to offer a uniquemulti-disciplinary technology and investment advisory services to private equity and venture funds, technologycompanies and other ecosystem players.Engage with Xona Partners: advisors@xonapartners.com • www.xonapartners.com©2013 Xona Partners Pte. All rights reserved.