Distributed networks around the world: Asia focus
Network densification in developed and developing markets: Japan and India case studies
Small cells offer the densification needed to address capacity constraints in densely populated urban environments and economical coverage solutions in sparsely populated rural locations. The Asian market is currently home to over 75% of the world’s deployed small cells. The Future Network, in partnership with the Small Cell Forum and Rethink Research, have produced an outline of the key trends and observations in the region, with a particular focus on the developed market of Japan and the developing market of India, ahead of The Future Network Meetup Asia in Singapore, 12-13 December 2017. The companies featured in this article will all be participating in the Meetup. Contact us today to book your ticket.
Around the world cellular networks exist at various stages of development, from legacy 2G through trials of 5G. Two of the biggest telecom infrastructure projects for the next decade will be to supplement existing 4G / LTE networks with 5G, and to address the digital divide and bring connectivity to the 50% of the world’s population who still remain unconnected. In both cases, the capital investment and infrastructure needed is enormous, and new business models and routes to market are being designed to cope with the unique demands of the Asian market.
In developed markets, with 5G rapidly approaching, mobile network operators and infrastructure partners are ramping up their evaluation of the latest technologies for network densification, and looking to make network planning and purchasing decisions. In developing markets, mobile network operators, infrastructure companies, solution providers and governments are working together to provide internet and cellular service to over 4 billion hitherto unconnected citizens. Very often the solutions that are implemented in these developing markets do not follow the traditional network evolution path, with many nations jumping straight to mobile broadband connectivity.
The Asian continent contains both developed and developing markets, and it provides a microcosm for the world at large when we consider network evolution. If we look at the nations of Japan and India we can see the varying approaches to network densification taken in both developed and developing markets. In India we saw the highly disruptive approach of new market entrant Reliance Jio when they launched their 4G network in 2016, with no legacy 2G / 3G network support, adding 4.78 million new subscribers in one month (April to May 2017). With subscriber bases shifting at such a rapid pace, and data demand rising exponentially, an effective coverage and capacity solution was sought, and the winner, in this case, was deemed to be small cells, with Jio deploying over 100,000 in the last few months, and planning another 100,000 in 2018.
Japan has no discernible independent tower market - all telecom towers are still MNO captive - and so network densification projects tend to be self-deployed top-down by MNOs - SoftBank and NTT DoCoMo are particularly progressive, or increasingly deployed bottom-up by new companies like JTOWER (who, despite their name, provide in-building coverage solutions for enterprise buildings). SoftBank have recently conducted a trial of the world’s first self-organising microwave backhaul in downtown Tokyo, as well as a programme of rural and remote small cells across the country, and are truly looking to implement a country-wide solution which addresses the whole spectrum of customer needs. The cellular network densification strategy is well and truly underway in Japan - join us at The Future Network Meetup in Singapore, 12-13 December 2017 to hear from SoftBank and NTT DoCoMo on their plans for rolling out distributed networks in advance of 5G in Japan.
Japan is one of the most advanced nations in the world when it comes to cellular network densification. Brendan O’Reilly, CTO of Telefonica’s O2 UK arm, attributes this to the fact that MNOs in Japan, where some flagship dense HetNets are seen, can access four times more spectrum than their UK counterparts, as well as far more dark fibre, at an affordable cost. He said Japan has also devised a more flexible regulatory environment that allows a new site to be acquired and a cell deployed in under three months. (source: Rethink Research).
New deployments of small cells in Asia-Pac by environment
As evidenced by the graph above, the single largest target market for small cell deployment in the APAC region is in urban (outdoor) environments, with nearly 80% of the market. The race is on for who will win the contracts with MNOs, towercos and other third party neutral hosts to deploy these new networks.
Where are small cells being deployed in Asia?
When we look into how Asia compares to the rest of the world in terms of small cell deployments per market, we can see that forecasts are still for the region to have the largest addressable market by a significant margin compared to the U.S, Europe, the Middle East, Central and Latin America, the CIS, and Africa across enterprise, rural and urban.
New deployments of enterprise small cells by region
New deployments of urban small cells by region
New deployments of rural small cells by region
Developing market special focus: India
Indian communications are very mobile-centric and, by 2022, mobile data is forecast to hit 11GB per smartphone. Already, 95% of mobile data traffic comes from smartphones. To meet demand, operators expect to increase capex spending by 6% a year between 2015 and 2020, at a time when they are paying large sums for spectrum, and have low ARPU to support their investments: $3.8 per month in 2016, compared to $25.3 in Europe or $29 in USA (source: Small Cell Forum).
According to the Small Cell Forum, a new approach is needed, which can deliver dense capacity and ubiquitous coverage with a radically lower cost of ownership, plus the ability to support new services and move to 5G.
They have outlined this new approach as follows:
- innovative architectures with high levels of virtualisation and automation
- greater use of unlicensed and shared spectrum
- new operating models such as neutral host
- streamlined, standardised deployment and management processes.
Taken together, these measures will revolutionise the cost of supporting abundant, affordable data, which is a key goal for India.
The expected growth in small cell deployment in India is expected to outpace the global figure significantly. In India, compound annual growth rate (CAGR) of new small cell deployments, between 2016 and 2022, will be 33% in enterprise environments and 90% in outdoor urban (though the former is a far larger base). These figures compare to global CAGR forecasts of 26% and 79% respectively, according to SCF/Rethink Technology Research predictions.
Indian small cells deployment by technology in 2022 and 2025
As in other regions, Indian operators are starting to think about 5G, which will bring new levels of density. 5G trials are underway at Reliance Jio, Airtel, Vodafone and others. The Indian Telecoms Minister recently unveiled a 5G Committee, and there are likely to be auctions of 5G-suitable mid-band spectrum in early 2018. 4G will remain the dominant technology for densification in the early 2020s in India, but will be overtaken by 5G, in terms of new roll-outs, from around 2023. 5G will account for almost 80% of new small cells deployed in 2025 (source: Small Cell Forum).
Small cells are not just for operators in developed mobile broadband markets whose customers’ data usage growth is outstripping their macro layer build-out, but also for those markets which lack legacy network architecture. Some MNOs in developing markets are taking a small cell-first approach to urban and enterprise deployments, but there are barriers here too. In India, for example, it doesn’t seem to be getting any easier to acquire sites for urban densification, despite rapidly growing demand. The Municipal Corporation of Delhi (MCD) recently stopped granting permission for new towers in residential areas, and this may affect some small cell sites too. So it seems, whether we are considering developed or developing markets, MNOs are likely to require some assistance in securing small cell locations.
Who is best placed to assist the MNOs is in realising their network densification strategies? Towercos could provide one possible partner, and there is evidence across Asia, and especially in India, of towercos increasingly taking a significant role in the roll out of distributed network architecture, with many combining their involvement in macro and distributed cellular networks with a strategic approach to realising the country’s smart city vision. As the arbiters of relationships with municipal authorities in many cases, towercos are ideally placed to be the coordinators of densified network projects and may well be crucial to Asia’s overall cellular network evolution.
The Future Network Meetup Asia will unite the deployers of densified networks with the solution providers making them possible. Do not miss this unique opportunity to meet with the leading stakeholders from across the APAC region. To reserve your place contact us today. Only a few tickets remain.