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Ericsson's Small-Cell Crystal Ball

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
11/21/2012
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As Ericsson AB (Nasdaq: ERIC) unveiled its expectations for global mobile traffic growth on Wednesday, the Swedish vendor also outlined the small-cell base station deployment strategies it expects to see as carriers figure out how to deal with the forthcoming data deluge.

In its latest Mobility Report, the vendor notes that mobile data traffic volumes have doubled during the past year (comparing the third quarter of 2012 with a year earlier) and were up 16 percent compared to the second quarter of 2012, driven by the rapid uptake of smartphones and LTE subscriptions.

It also expects data traffic volumes to grow at an average annual rate of 50 percent between 2012 and 2018, with video streams driving that growth.

(The traffic statistics, collected from about 100 networks that use Ericsson equipment and extrapolated to generate the global statistics, do not include Wi-Fi, mobile WiMax or DVB-H traffic, it should be noted.)

In order to keep up with that data traffic growth, Ericsson believes operators will need to deploy small cells to supplement the capacity and coverage of their macro base station networks in some places. That's in keeping with the vendor's Heterogeneous Network (HetNet) vision and in line with the expectations of other major vendors. (See Ericsson Preps New Small Cells , Vodafone CTO Opens Up on Small Cells, 4G World 2012: Cisco Talks 'Multi-Mode' on Small Cells and AT&T: How Small Cells Fit the Big Picture.)

What's new, though, is Ericsson's view on the number of small cells that may, on average, be required.

By 2017, Ericsson expects each macro base station in urban areas will be supplemented by about three small cells. Today, there are about 5 million macro base stations deployed worldwide and those in metro areas account for about 15 percent of the total -- so, about 750,000.

Therefore (and this is just to satisfy our own statistical curiosity), if Ericsson's prediction was accurate and each of those had three supplementary small cells, that would amount to 2.25 million tiny base stations by 2017 (if the number of macro base stations remained constant, of course...).

Heavy Reading has forecast that there will be 500,000 public access small cells in live service worldwide by 2015. (See Small Cell Backhaul: What, Why and How - by Heavy Reading.)

"You have to start with improving the macro network -- that's your best return on investment," says Heavy Reading Senior Analyst Gabriel Brown. "You'll need small cells for capacity in urban areas, particularly for cell edge performance."

Brown explains that cell edge performance is important because operators are starting to differentiate on coverage again. But it's different now from how operators built their networks for good voice coverage. Rather, operators are looking to ensure decent data coverage so that users' applications will work well.

People are starting to talk about 'app coverage' or 'app-centric coverage'," says Brown. "Small cells help with the cell edge performance as well as capacity."

Ericsson agrees that small cells aren't the only answer to the challenge of improving mobile network performance and that the macro cells are still vital. The vendor's senior vice president for networks, Johan Wibergh, believes operators should have a three-stage approach to dealing with mobile data capacity issues: Improve existing macro base station networks by adding capacity or 'carriers', or by upgrading the technology; then, add more macro base stations -- that is, "densify" the network; and, finally, complement certain macro base stations with small cells.

Whether operators could afford such a capex-intensive strategy is another matter.

For more



— Michelle Donegan, European Editor, Light Reading Mobile

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Michelle Donegan
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Michelle Donegan,
User Rank: Light Beer
12/5/2012 | 5:17:15 PM
re: Ericsson's Small-Cell Crystal Ball


So that's Ericsson's view on small cell volumes. I'd be interested to know what others think -- does their projection sound low? Or about right?

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