Economics of Small Cells      and Backhaul  Stream: Future Communications       Infrastructure FocusBroadband World Forum ...
Outline• Why Operators should Deploy Small cells:        Traffic        Capacity        3G Life Extension• How will Sma...
Why Operators should Deploy Small Cells:Mobile Data Traffic Explosion                   Asia Pacific will be by far the la...
Why Operators should Deploy Small Cells:Solving the Capacity Crunch Small Cells Solve the Capacity Crunch…..              ...
Why Operators should Deploy Small Cells:3G Life Extension – Tri-Mode will Dominate + WiFi                      Global Pene...
How will Small Cells Roll Out?Small Cell Shipments By Region                                                          Asia...
How will Small Cells Roll Out?Public Femto, Pico, Metro..Small Cell Shipments                                Public Femto ...
Seven Core Use Cases for Small Cells    Location/Area Characteristics                            Functions Required for Sm...
How will Small Cells change Backhaul?New Topology Part 1     New Topologies Require more connections Per Cell Site        ...
How will Small Cells change Backhaul?New Topology Part 2         New Topologies Require More Connections for Redundant Cel...
How do we Resolve other Challenges createdfor Backhaul by Small Cells?…’Smart Backhaul’, QoS, Synch., C-RAN, OAM, SON & SD...
How much Investment in Backhaul is Required?Forecast by Region based on Traffic Demand & Estimated $/GB of Backhaul       ...
Summary: Small Cells offer a Significant MarketOpportunity ….but create Backhaul Challenges        • Small cells will help...
Small Cell and WiFi Reports from Strategy Analytics     Below are selected Reports that you may find useful.     Complimen...
Contact Information                                     www.strategyanalytics.com                              Sue Rudd Di...
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BBWF Economics of Small Cells and Backhaul Oct1812

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BBWF Economics of Small Cells and Backhaul Oct1812

  1. 1. Economics of Small Cells and Backhaul Stream: Future Communications Infrastructure FocusBroadband World Forum - Content Hub 2October 18th. 2012Presented by:Sue Rudd Director Service Provider Strategiesemail: srudd@strategyanalytics.comCopyright© Strategy Analytics 2012
  2. 2. Outline• Why Operators should Deploy Small cells:  Traffic  Capacity  3G Life Extension• How will Small cells Roll Out? Public Femto, Pico, Metro..• How will Small Cells change Backhaul?• How do we Resolve other Challenges created for Backhaul by Small Cells?• How much Backhaul is Required?• Summary: Small Cells offer a Significant Market Opportunity ….but create Backhaul ChallengesOctober 2012 2srudd@strategyanalytics.com
  3. 3. Why Operators should Deploy Small Cells:Mobile Data Traffic Explosion Asia Pacific will be by far the largest Mobile Broadband Data Market with North America & Western Europe virtually tied in 2017 Mobile Data Traffic Explosion 60,000 PetaBytes Traffic Throughput M East/Africa 50,000 Asia-Pacific C/L America 40,000 N America 30,000 C/E Europe W Europe 20,000 10,000 0 2010 2011 2012 2013 2014 2015 2016 2017 Source: Strategy Analytics Wireless Operator StrategiesOctober 2012 3srudd@strategyanalytics.com Copyright© Strategy Analytics 2012
  4. 4. Why Operators should Deploy Small Cells:Solving the Capacity Crunch Small Cells Solve the Capacity Crunch….. Source Of Efficiency Times Capacity Grows New Spectrum ~2 Times Spectral Efficiency ~1.5 Times TOTAL ~3 times (2*1.5) Adding Small Cells & Spatial Re-Use = 9 - 15 Times (3 *3 – 5) = 3 to 5 times Capacity increase Sources: Alcatel Lucent, Farpoint Group and Strategy Analytics estimates Source: Strategy Analytics Wireless Operator StrategiesOctober 2012 Copyright© Strategy Analytics 2012 4srudd@strategyanalytics.com
  5. 5. Why Operators should Deploy Small Cells:3G Life Extension – Tri-Mode will Dominate + WiFi Global Penetration by Technology Generation – CDMA, 3G & LTE Legacy Technologies will co-exist for many years Global Penetration of CDMA, 3G (UMTS, HSPA & HSPA+ and LTE 45% Percent Penetration of Global Population 40% 35% 30% CDMA Penetration % 25% LTE Penetration % 20% UMTS/HSPA/ HSPA+ 15% Penetration % 10% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 October 2012 Source: Strategy Analytics Wireless Operator Strategies 5 srudd@strategyanalytics.com
  6. 6. How will Small Cells Roll Out?Small Cell Shipments By Region Asia Pacific will be by far the largest market for small Cells Small Cell Shipments By Region through 2017 9,000 8,000 M East/Africa Small Cell Shipments 000s Asia-Pacific 7,000 C/L America 6,000 N America 5,000 C/E Europe 4,000 W Europe 3,000 2,000 1,000 0 2010 2011 2012 2013 2014 2015 2016 2017 Source: Strategy Analytics Wireless Operator Strategies October 2012 6 srudd@strategyanalytics.com Copyright© Strategy Analytics 2012
  7. 7. How will Small Cells Roll Out?Public Femto, Pico, Metro..Small Cell Shipments Public Femto Cells dominate initially but are overtaken by Pico Cells (Right Axis) By 2014 Metro Cell Shipment Volume will overtake Macro Cells (Left Axis) Macro, Metro, Pico and Public Femto Cellls 000s 1,600 6,000 Pico and Public Femto Cells Macro Cells Macro & Metro Cells 1,400 Metro Cells 5,000 1,200 Pico Cells 4,000 1,000 Public Femto Cells 800 3,000 600 2,000 400 1,000 200 0 0 2010 2011 2012 2013 2014 2015 2016 2017 Source: Strategy Analytics Wireless Operator Strategies September 2012 7 Copyright© Strategy Analytics 2012
  8. 8. Seven Core Use Cases for Small Cells Location/Area Characteristics Functions Required for Small cell Add Capacity Complete Ensure Quality Integrate WiFi Seven Use Cases w. Thru’put Coverage of Service(QoS) Load Mgt. 1. Urban Low Speed Hot Zone 2. High Mobility Hot Zone 3. Suburban Neighborhood 4. Outdoor Sporadic Use Locations 5. Indoor Public Spaces 6. Range Extension for Macro Cells 7. Offload to Fixed/WiFi Note: Degree of Shading indicates Relative Importance Source: Strategy Analytics Wireless Operator Strategies ‘Small Cell Market Outlook 2012 - 2017 - Seven Market Opportunities Quantified’ September 2012 8 Copyright© Strategy Analytics 2012
  9. 9. How will Small Cells change Backhaul?New Topology Part 1 New Topologies Require more connections Per Cell Site Evolution from Hub ….. to Hub and Spoke ……to Tree and Branch…..October 2012 Copyright© Strategy Analytics 2012 9srudd@strategyanalytics.com
  10. 10. How will Small Cells change Backhaul?New Topology Part 2 New Topologies Require More Connections for Redundant Cell Site Connectivity and Real Time Redirect/ Offload Evolution to Ring and Partial MeshOctober 2012 10srudd@strategyanalytics.com
  11. 11. How do we Resolve other Challenges createdfor Backhaul by Small Cells?…’Smart Backhaul’, QoS, Synch., C-RAN, OAM, SON & SDN • Small cells need more than new Partial Mesh Architecture for Backhaul Connectivity.. • Small Cells Require:  High Performance Resilient Multi-path Links  QoS for very high Signaling & Network Performance (S1 Links , Diameter etc.)  Synchronization for Packet Ethernet connected sites  Intelligent Pro-active Network Management with Tools for Network Operations Support  Self-Organizing Networks (SON) to handle increasing ComplexityOctober 2012 Copyright© Strategy Analytics 2012 11srudd@strategyanalytics.com
  12. 12. How much Investment in Backhaul is Required?Forecast by Region based on Traffic Demand & Estimated $/GB of Backhaul By 2017 Traffic Growth Requires over $35 Billion in Backhaul Required Backhaul Expenditures to meet Traffic Demand M East/Africa Asia-Pacific Annual $000s for Backhaul C/L America N America C/E Europe W Europe 2010 2011 2012 2013 2014 2015 2016 2017 Source: Strategy Analytics Wireless Operator Strategies October 2012 12 srudd@strategyanalytics.com Copyright© Strategy Analytics 2012
  13. 13. Summary: Small Cells offer a Significant MarketOpportunity ….but create Backhaul Challenges • Small cells will help solve the Capacity Crunch and will add capacity to legacy 2.5G/3G Macro Cells  Public Femto cells will play a key role for a few years  Pico cells with more ‘intelligence’ and remote configurability take off  Metro Cells will complement Macro Cells in Integrated Heterogeneous Networks (HetNets) • BUT …Small cells are not necessarily cheaper • AND create Backhaul Challenges that Require:  High Performance Signaling  Network QoS  Network Management  Partial Mesh Architectures ….  Separate Report shows it is worthwhile to increase Expenditures for Backhaul Source: Strategy Analytics Wireless Operator StrategiesSeptember 2012 Copyright© Strategy Analytics 2012 13
  14. 14. Small Cell and WiFi Reports from Strategy Analytics Below are selected Reports that you may find useful. Complimentary Executive Summaries Executive Summary: Too Good to be True? Small Cells Solve the Capacity Crunch and Improve Service WiFi Hotspots will be Small Cells in Mobile Broadband Networks by 2015 Full Small Cells Reports and Forecasts Small Cell Economics - Key to 3G Profitability and Small Cell Market Outlook 2012 - 2017 - Seven Market Opportunities Quantified and Small Cell Market Outlook 2012 - 2017 - Forecasts By Region and Cell Type Source: Strategy Analytics Wireless Operator StrategiesSeptember 2012 Copyright© Strategy Analytics 2012 14
  15. 15. Contact Information www.strategyanalytics.com Sue Rudd Director Service Provider Analysis srudd@strategyanalytics.comOctober 2012 15srudd@strategyanalytics.com

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