Small cells: shaping the future of wireless infrastructure networks

5G, digital infrastructure and smart cities are set to reshape demand for telecom infrastructure networks. TowerXchange speaks with Simon Fletcher, Chief Strategy Officer at the Small Cell Forum, about how small cells may be the big solution for neutral hosts, MNOs and enterprises. Rollout continues to accelerate, and with it a reorganisation of the towerco ecosystem.

There are two camps in the small cell space; in-building solutions (IBS) for indoor deployment scenarios and a parallel outdoor small cell, a shrunk-down macro base-station with all the functionality of a macro site but much less capacity. These can be deployed on buildings or lampposts to offer a cellular-based solution to provide flexible coverage and improved capacity.

Each generation of new cellular technology brings investment to roll out macro towers and operators have been deploying small cells since 2G to help increase network capacity or coverage. However, few operators have gone through with small cell deployment as the basis of their network; rather, small cells have been selectively deployed on a case-by-case basis. Because of how 5G has been specified it is more amenable to using small cells in a more integrated way. New high-capacity demand locations require small cells to fill gaps in a more cost-effective way than a macro tower solution. 

There are many small cell solutions currently on the market from different vendors and the industry has a long tail of developers. We at the Small Cell Forum are heavily focused on looking at cost-optimal solutions. With the price point equation roughly at 8-10 small cells per typical macro site with a similar capex/opex profile the economics of a small cell network becomes possible, although this is very market specific. But a single small cell offers a lower price proposition compared to a macro site.

On private networks and enterprises one of the key drivers is the refresh cycle on private IT infrastructure and wi-fi. Once every 5-7 years there is a fresh cycle of investment, encouraging the IT industry to revisit their connectivity strategy and small cells are becoming a core part of the infrastructure network. We see this cycle coming now and it always brings discussion for more cellular connectivity and demand in IBS to make up for this.

In Europe we are seeing the neutral host companies come out of the drive towards sharing passive infrastructure and considering sharing active equipment networks. Some European towercos now have neutral host assets and are becoming more adventurous in terms of how they share these assets to provide infrastructure-as-a-service. This is a trend we are seeing emerge from like-minded companies who are dancing between being a towerco and a neutral host. These companies receive substantial revenues from in-building deployment as well as the capability to deploy outdoor networks as well.

If towercos are going to be deploying small cells they will need to share this mentality. Small cell deployments require careful planning and identifying where they fit within a broader network in order to see real returns in network enhancement. Power and fibre backhaul are major elements to consider; if you can’t get power or backhaul you don’t have a small cell. Part of a company’s ability to deliver small cells with be their competency to provide these.

This becomes a particular challenge deploying small cells on street-level where considerations towards streetscape and the build environment which could cause signal blockage. What makes life easier, and something we are seeing in Asia, is having a maturing and capable fibre-to-the-premise mentality. Readily accessible deep fibre makes small cell deployment much easier.

Private cellular networks have been around for a while in different forms and are one of the main drivers for small cells. The genesis of the Small Cell Forum delt with the challenge around in-building coverage for enterprise and home coverage, known as the Femto Forum, and small cells came as a concept from this. There has been an increasing interest as the product evolved over time, not only for 5G but in private 4G cellular networks.

Some environments have latched on to private networks, particularly ports which have found they can take advantage of the private network ecosystem quite quickly. Enterprises in general will see a large uptake in private networks, primarily for service connectivity in multi-tenant office spaces. Some may be outsourced to MNOs but once the infrastructure is in place and becomes integrated into enterprise IT backend, the conversation shifts towards having their own private solution. This helps to improve cybercity and data protection.

These networks can certainly be owned by the enterprises themselves if they are of a sensible size to integrate the infrastructure into their own networks. Ericsson and Nokia now both have a private network division and are able, with their own equipment and engineering, to build and operate private networks. The neutral hosts primary business is to be a neutral platform for the MNOs but those who have enough tower, power and IT backhaul could offer private network-as-a-service to local enterprises or business parks directly.

Moving towards 5G networks we can start talking about edge computing. Edge is likely to be a commoditised mini data centre which is located near a tower, hosting a number of connectivity solutions for various private network requirements. This is an ownable asset that provides cloud connectivity for edge and private networks.

This could be owned by the enterprise who would buy them direct and install the network, but there could be additional functionality that allows for bridging to the MNOs domain which neutral hosts would be well placed to do, especially given they have access to the backhaul. A hybrid model where neutral hosts bridge individual enterprises and operator networks could certainly be negotiated.

Ultimately, it’s going to be a balancing act for the towercos. If their core revenue comes from the MNOs they will need to be cautious in building their services up to the point where they start to look more like an infraco. The danger of moving from a service provider to a competitor would complicate the relationship as well as the business model.

There are ways to charge at a fixed fee the number of small cells which are visible on an MNOs infrastructure. MNOs can select locations where they want to improve localised network coverage without putting more capex into their infrastructure. Small cell players can give MNOs and towercos what they want and improve outcomes for the connected user. This will depend largely on the scenario as there doesn’t seem to be one model for all small cell deployment and be particularly relevant in areas with dense populations, capacity demands and digital infrastructure needs.

The Small Cell Forum has explored several models out there including a feasibility study on a neutral host model looking at providing a solution for road and rail transport corridors. The difficulty here is the nature and type of capacity demand; as each train passes you have massive spikes in capacity. This could be a challenge for an MNO using tower architecture to get the capacity they need at an economically sensible price point. A specialist neutral host company would be preferrable in providing capacity at specific areas over trying to engineer a workable network themselves.

One element to consider here is the environment; local planning authorities will be sensitive to where small cells can go. At the national level there are things governments can do to help MNOs acquire sites at a more reasonable price point making it more economically viable for small cell deployment. Lamp posts are a great option and the towerco model has been used to base a lamppost model for small cells.

However, governments have been restrictive on this so interest has waned as it’s less advantageous and there are other  ways to think about improving connectivity from a public-sector perspective. Regulation which makes operators pay for locations or put restrictions on leasing times creates uncertainty and ultimately delays small cell deployment.

Things can be done at the national and regional level to make deployments easier and faster such as allowing overhead wires instead of having them run underground to reduce deployment cost, particularly overhead fibre. This is something for building regulators to consider; telecom regulators can help by creating dedicated spectrum for private network use. Some markets make spectrum exclusive for MNOs but in other countries such as the UK, Norway, France and Germany we see regulators designate spectrum to enterprises for private network use. This has created a new wave of demand for small cells.

Japan and Korea have good examples of supportive regulation. It’s about giving small cell deployers the flexibility and freedom to reduce their cost margins and gain access to locations which maximise the benefits of small cells. Part of the advanced 5G deployments in these markets has been the loosening of regulation on small cell deployments.

The key here is flexibility for deployment. To make the economics of a tower work you need the infrastructure present. In a smart city you have issues with deploying macro sites and getting capacity down on the street-level; rooftop sites aren’t enough to create the required 5G networks for smart city technology. Small cells are needed to deliver ground-level capacity and bring capacity to localised areas such as inside shopping centres.

Developers might bring in expertise, but many do not put the required planning into locating telecoms infrastructure networks while designing cities. We have seen some consulting from telecom experts to assist developers, but this isn’t common. Real Wireless supported several developers on building stadium and by bringing telecom infrastructure expertise during the planning stage. This helped save significant capex on new builds by ensuring power and fibre provision was sufficient to sites, as well as maximising spectrum coverage effectiveness.

The spectrum being made available for 5G is not very good at penetrating through buildings and will require more in-building coverage to make up for this. This is particularly relevant for cities where buildings are covered in large amounts of insulated glass as outdoor coverage sites will struggle to penetrate this; cities in the Middle East will need a lot more IBS deployments. Saudi Arabia is a known leader in this space due to its geography of large rural spaces and densely populated cities. A factor many countries in the Gulf share as well, making the region ideal for small cell solutions.

Ultimately enterprises will use neutral host companies to do the challenging ‘heavy lifting’ of the network architecture. Developers don’t have the experience in network planning, procurement or integration that neutral hosts have. We usually find venues prefer to outsource these services to specialist companies who can build, design, maintain and operate such networks. IBS systems should ideally be connected to broader networks which puts companies that manage the macro-network in a better position to manage IBS. Some hospitals have tried to do it themselves but struggled with the technicalities of cellular network management.

If we look at highly integrated networks or high-demand hotspots there is enough investment in the infrastructure and interest in controlling the operational environment that MNOs would deploy the networks themselves and leave the towercos out. In the manufacturing sector enterprises are rolling out their own private networks which doesn’t leave much room for towercos either.

However, there is a murky distinction between private and public networks where a hybrid model exists for towercos to fit into. Towercos such as Cellnex and TAWAL are both showing interest here where new capabilities are emerging from an ability to be able to deal with small cells and the supporting infrastructure around it. Once you get the proper macro network operating the MNOs will start to look at small cells to fill these gaps and this is where small cells will really kick off. This will be particularly relevant with IBS how the network architecture needs to localise for 5G spectrum.

Want to learn more about small cells, private networks and in-building solutions? Join Simon Fletcher in our small cell working group at TowerXchange Meetup MENA 2023 on 13-14 March in Dubai alongside towercos, MNOs, small cell developers and other suppliers from the MENA tower industry.