Introduction to the distributed network market
Cellular networks continue to evolve around the world and the distributed network market is on the rise unilaterally, with macrocells, distributed antenna systems (DAS), small cells in various form factors - picocells, microcells, metrocells, plus Wi-Fi making up the bulk of the technologies being utilised to solve capacity and / or specific coverage challenges for mobile network operators (MNOs). While these technologies are not new, there have been innovations in business models and deployment strategies which are making the application of these solutions more widespread, and their role in the network densification for 4G, and particularly 5G, cannot be ignored. The Future Network tracks distributed network projects around the world to create a comprehensive picture of who is deploying what, where.
The majority of network densification projects are undertaken by MNOs in outdoor environments and large, high profile venues, to solve coverage and capacity constraints. In previous years, Wi-Fi was the go-to technology to help offload traffic from the cellular network, but concerns about security arising from the unlicensed nature of the spectrum Wi-Fi operates in has led to a rise in the creation of heterogenous networks, utilising a number of different technologies. There has also been a market shift towards enterprises and building owners taking responsibility for providing connectivity solutions in indoor environments.
As the total cost of ownership falls, and business models are adapted to make the deployment of ultra dense and heterogeneous networks more economical, ubiquitous cellular coverage is no longer viewed as a luxury, but as a basic human right (see figure 1).
Network densification projects have tended to focus on very densely populated areas, such as city centres, and areas where large amounts of people congregate at a given time, such as stadiums, because the business case is clear: MNOs want to deliver the optimum customer experience to their subscribers, and when there are large volumes of people, a clear case for investment in network architecture exists. This top down approach to cellular network infrastructure investment will always be the domain of the carriers because of their control over the macro network, but there has been a noticeable shift towards a more bottom up approach originating closer to the end user. Investment in networks is increasingly being made by landlords and building owners of industrial and commercial spaces of less than 500,000 square feet, which is often deemed uneconomical for the MNOs (see figure 2).
Office owners, real estate developers and manufacturing plant managers are recognising the commercial imperative of improving cellular connectivity in their venues, and indeed in-building cellular coverage has become a point of competitive differentiation in the enterprise and hospitality markets. Entrepreneurial business models are emerging whereby connectivity is being offered as-a-service, and infrastructure investment is being made by neutral hosts and other third parties.
As the Internet-of-Things ecosystem expands, numerous private networks will become commonplace, but the overall macro network still needs to be robust enough to handle the exponentially increasing data demand we have begun to witness.
The Cisco Visual Networking Index (VNI) states that global mobile data traffic increased nearly 18x between 2011 - 2016, and that this will grow at a compound annual growth rate (CAGR) of 47% from 2016 to 2021, reaching 49.0 exabytes per month by 2021.
To meet subscriber needs, macrocell coverage is inadequate. Even with carrier aggregation and smart antenna, macrocell coverage remains inadequate to deliver the true LTE experience in many areas, especially indoors, and it is becoming increasingly difficult for MNOs to meet subscriber requirements through traditional cell tower builds and rooftops. The attraction of distributed networks is that they can be deployed in several ways: MNOs can self-deploy; they can contract out to an OEM or Managed Service Provider (MSP); or they can be deployed and managed by towercos or other neutral hosts. The Future Network sees the next generation of cellular networks uniting traditional macrocells with distributed network technologies offered under a number of different business models by a growing range of different suppliers (see figure 3).