According to a new report, growth in the small cell industry isn't currently focused on the kinds of dense, urban areas where such devices could deliver wireless services to a large number of customers.
Instead, that small cell growth is happening in the suburbs.
"While the majority of small cells still exist in dense urban and urban regions, according to Altman Solon analysis, morphologically suburban areas are seeing almost equal small cell deployments to dense urban areas," the technology consulting firm wrote in a new post on its website. "In fact, 2019 and 2020 saw the highest small cell deployment to date in suburban areas."
Altman Solon defined "morphological suburban" areas as those including "suburban areas in dense urban or urban regions."
Specifically, the firm said that big, crowded cities such as New York, Boston and Chicago already have wide networks of small cells. Further, it reported that mid-sized cities like Boulder, Colorado, and Fort Worth, Texas, are also established locations for the devices. But the firm identified "early-stage areas of suburbia," such as Montgomery County, Maryland, as locations where small cells are growing at a quick clip.
The issue is important considering small cells are widely viewed as a critical element to 5G. The gadgets – often the size and shape of a pizza box – are designed to sit atop light poles, rooftops, traffic lights and other such structures, transmitting 4G and 5G signals into lightly covered or hard-to-reach places. Small cells are viewed as a way to augment wireless networks in ways that traditional, macro cell towers can't.
Altman Solon said it derived its findings from a database it constructed of small cells across more than 70 US markets. "Leveraging analysis of this database and augmenting with other primary and secondary research and our deep experience and knowledge base in the space for all small cell ecosystem players, Altman Solon has developed preliminary critical insights about the competitive landscape in the US small cell market," the firm boasted.
Among its findings:
- "Small cell growth has been much slower historically than what industry reports have projected due to the regulatory climate, lack of neutral hosts, and limited backhaul," the firm wrote
- Roughly 70% of the small cells it identified are located in dense urban and urban areas.
- Crown Castle operates about 50% of all small cells identified, while mobile network operators like Verizon account for around 35%. Crown Castle operates about 50,000 commercially available small cells today, with another 30,000 on order. ExteNet Systems operates roughly 32,000 small cells across the country, while Mobilitie – recently acquired by Canada's BAI Communications – counts around 10,000 small cells.
- Altman Solon identified very few neutral host small cells, which are small cells that transmit signals for more than one network operator. Such devices are considered critical to the growth of the industry considering neutral host small cells can generate significant revenues for the companies that operate them.
Although small cells have been a hot topic of discussion in the industry for years, interest in them may be cooling. After all, 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 macro cell towers and not necessarily adding more small cells to their network footprints. As 5G matures, though, small cells might come into play later.
Importantly, regulatory blocks to small cells continue to fall. For example, lawmakers in more than one-third of the US states have enacted legislation aimed at making small cells easier to build.
Moreover, the FCC in 2018 developed rules intended to limit the amount of money cities could charge wireless network operators for the installation of small cells. The rules also require cities to move quickly on small cell installation requests.
However, those rules – geared to speed up the installation of small cells nationwide – sparked a lawsuit by cities around the country that viewed them as federal overreach.
Just last month, the US Supreme Court decided not to look into the issue, effectively dealing a death blow to local efforts to overturn the FCC's small cell rules.
But Altman Solon wrote that vagaries of local regulations continue to slow the installation of small cells around the country. "From the aesthetics and design standards to application processes, and tenancy and free structures to 'shot clock' timelines, almost all of these aspects affect the ease of small cell deployment and vary significantly by city," the firm explained. "For carriers and providers, this means a 'Goldilocks' market strategy doesn't exist."
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