AT&T, T-Mobile and Verizon are all working to put their new midband spectrum licenses to use in 5G. And much of that work appears to involve upgrades to their existing 5G radios on top of their existing macro cell towers, and not necessarily adding more small cells to their network footprints, at least at first.

However, those in the network construction industry still believe that wireless network operators will ultimately rely on hundreds of thousands of small cells around the country to densify their networks. They just might have to wait a couple more years.

"We believe the timing of an inflection point in third-party supplied outdoor small cell leasing is uncertain, and the industry reaching ~1 million outdoor nodes on air in the US is unlikely by 2024," wrote the financial analysts at Raymond James in a note to investors following the release of Crown Castle's first quarter results earlier this month.

Crown Castle's 10,000 plan

Crown Castle has a relatively rosy outlook for small cells and it is widely considered the biggest third-party small cell operator in the country. Crown Castle installs small cells atop light poles and rooftops in downtown areas across the US, and rents them to network operators like Verizon.

Crown Castle's Jay Brown said earlier this month that the company operates around 50,000 commercially available small cells today, with another 30,000 on order. And he said the company expects to continue to activate around 10,000 new, commercially available small cells per year.

"I think that is a pretty good forecast for the time going forward," Brown said of that 10,000-per-year forecast. "As we look out over a longer period of time, I think that the demand for small cells is going to be well in excess of what we have seen thus far. So I think our view would be, over a longer period of time, that activity will increase beyond those levels. But in the near-term, I think that is a pretty good gauge."

Nonetheless, there remain indications that 5G network operators are primarily focusing on upgrading their standard macro towers with midband spectrum, whether that's C-band spectrum or 2.5GHz spectrum. Small cells, in the meantime, will be used occasionally to plug holes in coverage or expand signals indoors.

An emphasis on macros

For example, T-Mobile recently decided to cancel almost 6,000 small cells ordered by Sprint prior to T-Mobile's acquisition of the company. Instead, T-Mobile is working to build out its midband spectrum holdings across roughly 85,000 macro cell towers.

Verizon, on the other hand, recently announced it will deploy 15,000 additional Crown Castle small cells over the next four years in locations that have yet to be specified. Overall, Verizon currently operates around 14,000 small cell sites – mainly ones it has built itself – and expects to grow that number to around 30,000 by the end of 2021.

But Verizon has committed $10 billion to its midband 5G buildout over the next three years, an effort that will include putting its midband spectrum atop up to 8,000 macro cell towers within the next 12 months. The operator made no mention of small cells as part of its midband buildout efforts.

Some small cell providers are bracing for a bit of a slowdown in the near term as big wireless network operators focus on getting their midband networks up and running on macro cell towers first, in order to provide coverage across large geographic areas. Small cells might come into play later.

"A logical starting point is to use existing macro sites due to the broader coverage they offer over small cells," John Stacks, senior RF implementation manager at MD7, a mobile infrastructure company, wrote in response to questions from Light Reading. The company said it has participated in the deployment of a few thousand small cells across dozens of US markets, though it declined to provide specifics. "Small cells will be used in dense urban areas, where carriers will deploy C-band [spectrum] for increased capacity. They'll also rely on small calls as more high band spectrum is auctioned and they continue deployments."

The growth horizon

Some companies are seeing a slowdown already. CommScope, for example, said sales of its outdoor small cells and macro towers slowed last year due to "permitting and other events." But the company's CTO Morgan Kurk said earlier this month that sales will pick up "as the years go on."

Other small cell providers continue to expect growth in the sector in the coming months and years.

"Let's not consider macros and small cells as an either-or proposition," ExteNet Systems CEO Jim Hyde wrote in response to questions from Light Reading. The company operates 32,000 small cells across the country. "New small cell builds will also occur for C-band, and the complementary nature of macros and small cells applies to C-band like all other spectrums. Indoor system builds for C-band is imperative, and will occur concurrently, to deliver a seamless user experience. Huge benefits for building owners and businesses in terms of employee productivity, in-building network performance and aesthetics. All in all, we are looking at C-band for small cells starting out in the next 12-18 month horizon."

Ericsson this week announced new small cell products for indoor 5G networks in midband spectrum. Ericsson is one of the biggest network equipment suppliers in the US.

Hyde, of ExteNet, predicted that Verizon would focus on expanding its midband 5G coverage initially through macro tower upgrades. Then, he said, the company will pivot to network densification efforts with existing and new small cells.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano