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Small cells

4G LTE Capex to Decline Through 2014

North American carriers are expected to taper off spending on 4G LTE as key initial deployments are wrapped up through 2014. "As a whole, operator industry capex spend continued to increase in 2H12, remaining higher than the previous two years; however, TBR believes that capex spend will slowly decline in dollars spent through 2014 as larger operators wrap up LTE investment," write analysts at Technology Business Research in a new report on 4G network spend at Tier 1 operators. As the main deployments are completed though, operators will be looking at other methods to boost coverage and capacity. "The completion of LTE networks will force operators to differentiate their networks around speed and efficiency, resulting in LTE-Advanced and small cell advancements to supplement coverage in highly trafficked areas," TBR suggests. T-Mobile USA is already deploying a network that can be said to be LTE-Advanced-ready. The operator is deploying 3GPP Release 10 of the LTE specification. (See Why You Should Care About LTE-Advanced (Eventually).) AT&T Inc. has been the most public about its small cell plans; saying that it will deploy 40,000 units by 2015. Verizon Wireless has merely said it is planning to deploy 4G small cells in 2013 as part of an incremental program of LTE-Advanced "improvements" to its network. (See Cisco: A Verizon 4G Small Cell Provider?) I think it's safe to say that considering the startup buys and fundings that are happening now, software will also play a big role in eking more capacity and performance out of existing networks. Consider Cisco Systems Inc.'s recent buyout of Intucell for its self-optimizing network technology. Intucell has been working with AT&T on SON since April 2011, and AT&T deployed the technology through the network in 2012. (See Cisco to Buy AT&T's Favorite SON Startup.) Or consider the $12 million in funding for cell congestion startup, Vasona Networks, this March. (See Vasona Grabs $12M to Tackle Cell Congestion.) LTE-Advanced and 4G small cells are likely only part of the picture when it comes to increasing capacity on the network. Mobile video compression, data compression and self-optimizing techniques are also bound to be in the mix. This could make things interesting for traditional infrastructure vendors as the spending mix shifts and possibly shrinks in the coming years. We can already see vendors like Cisco up their spending on mobile software technology, while non-traditional vendors like Oracle Corp. are trying to get their hooks deeper into the mobile market. — Dan Jones, Site Editor, Light Reading Mobile

chuckj 4/3/2013 | 6:50:58 PM
re: 4G LTE Capex to Decline Through 2014 Telcos blew hot air to their suppliers about their need for small cells and some dived into without actually realizing it was all hot air and what the real TAM will be. -áTelco's have no incentive to deploy small cells because their customers are locked into two year contracts and customer service is not Telco's top priority. -á Mindspeed just announced a major cut in-átheir small cell-árevenue and according to some they provide 63% of the chips into this supposedly nascent-ámarket, which evidently must have reached maturity already. -á
DanJones 4/3/2013 | 4:56:45 PM
re: 4G LTE Capex to Decline Through 2014 Come on Chuck,-á

As things stand, AT&T could maybe source 400 small cells a week. Of course that will ramp up. That's not the real problem is it?

It's making sure that they all work together, are cheap enough to deploy and backhaul, while not interfering with the macro network and providing some kind of reliable uptime.

They want to use multiple vendors too.

Sure they can buy 400 small cells a week. But can they deploy 400 and get a benefit right now?
DanJones 4/3/2013 | 4:51:41 PM
re: 4G LTE Capex to Decline Through 2014 Lots of people do upload lots of content though. So compression at the browser could make a lot of sense. There's not going to be one panacea but a variety of methods, including compression applied at different parts of the process, small cells, LTE-A etc.

In reality, the issue of signaling overloading a network element is as big as network congestion and -á-- AFAIK -- may actually cause more real outages than congestion alone.
myhui 4/3/2013 | 4:14:19 PM
re: 4G LTE Capex to Decline Through 2014 Why do you need to do compression on the mobile handset unless you're uploading a lot of content? All the bottlenecks I read about refer to downloads.
chuckj 4/3/2013 | 7:30:41 AM
re: 4G LTE Capex to Decline Through 2014 Do Telco's ever wonder why none of their suppliers take all of their zig zag claims for spending seriously? -áYou would have to be stupid to gear up and down per what they say. -á Show me the purchase order and we will jump as high as you want, otherwise-áeverything-áhas a lead time and you must live with it and if you want us to carry inventory that will also cost you. -áAnd lets get serious, 40,000 small cells for all of ATT's network in 2 years? Why even announce it? it is not like Cisco, Alcatel, etc. are going to have a real challenge pumping out 400 small cells a week for ATT's pleasure, the next two years.
DanJones 4/3/2013 | 4:31:36 AM
re: 4G LTE Capex to Decline Through 2014 Yeah, I definitely do think we'll see more LTE-Advanced and small cells too but software optimization offers one way to get more out of an existing network. Small cells need to effectively backhauled and managed at a low-cost. And LTE-Advanced need tens of MHzs of spectrum to work as fast as they could. Hence, maybe optimization first...
Jay Hinman 4/3/2013 | 12:48:26 AM
re: 4G LTE Capex to Decline Through 2014 Dan, very good article. There's definitely trepidation in the operator community about the varieties of OTT traffic that are already been unleashed by LTE and the large-screen, video-friendly devices that typically run on it. The operators we talk to at Skyfire are looking to cloud-based compression/optimization services as proof points for the much-talked about march to NFV, and mobile video optimization is a perfect initial solution to prove out the concept this year.-á

We think you'll also see a flourishing of consumer-downloadable software that move compression and optimization to the browser and across all network services consumed by the device; this is a key piece of what we're doing with Opera, who acquired Skyfire last month as one of the "startup buys" you referenced, with the main driver being our cloud-based optimization product set.
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