LONDON -- Small Cells World Summit 2014 -- As the Small Cell Forum's new urban rollout guidelines were still steaming off the press on Tuesday, five European operator CTOs started the small cell industry's annual gathering by sounding off on the challenges that hold back public access deployments. (See Small Cell Forum Tackles Urban, Virtualization.)
"The ecosystem is complex -- from local councils, to street furniture owners, to transmission vendors, and the small cell vendors," said Bryn Jones, CTO at UK operator Three UK . "Trying to get all those suppliers to create one solution that's cheap and simple to operate in a cost-effective way is a challenge. The operational part is absolutely key."
Jones called on the industry to step up and work with other stakeholders to improve the situation. "Everyone in this room needs to work together on how we get that end-to-end operational experience," he said.
3 UK has rolled out more than 100,000 residential femtocells and is currently working on enterprise femtocells. Once the operator has rolled out its LTE network, Jones said 4G small cells could be used to fill in capacity and add coverage. But the big challenge with LTE small cells is getting enough backhaul capacity to each site. "How to get 60 Mbit/s to 100 Mbit/s cost-effectively to each small cell is the challenge."
Dave Salam, director for network strategy and core network infrastructure at the UK's largest mobile operator, EE , said that small cells were the right solution to provide capacity in dense urban areas in the operator's 4G network. The operator already uses LTE femtocells in some of its retail stores to demonstrate the 4G experience.
But, like 3 UK's Jones, he warned that "the fragmentation of the ecosystem, especially in the outdoor case, is working against it and will make it very difficult. The cooperation needed to come through that isn't there yet."
Telefónica UK Ltd. CTO Adrian Di Meo was more concerned about the cost of renting sites in an outdoor environment, and noted that form factors are being addressed but still need work. "The size and weight of the technology is getting there," he said.
For Norwegian operator Telenor Group (Nasdaq: TELN), the problem with small cells is not so much the operational issues, but the business case itself: "If there's money in small cells, we'll invest, but if there's not, we won't invest," said Frode Støldal, the operator's CTO.
Portugal Telecom SGPS SA (NYSE: PT) CTIO Manuel Rosa da Silva added to the financial debate, noting that that the fundamental challenges go deeper than just outdoor deployment issues. "Anything that's HetNet naturally means cost," he said.
Ideally, da Silva wants the small cell business model to be more like the WiFi model, whereby the customer pays for the equipment. "With our managed WiFi and revenue model, we have indoor coverage. It works and our customers finance that," he said. "Monetizing data is very difficult. Our 4G network is running at 20% capacity. Until we see a model that is close to managed WiFi, then we won't get there."
The concerns raised by these European operators won't necessarily be fatal for the outdoor, urban small cell business case. According to Gordon Mansfield, Small Cell Forum chairman and AVP of small cell solutions at AT&T Inc. (NYSE: T), public access LTE small cell trials are well underway at several operators in more advanced LTE markets, namely Japan, South Korea and the US. While Mansfield did not reveal any details about specific trials, he said that AT&T was one of those operators.
But the candid comments from the CTOs echo the Small Cell Forum's own findings about the drivers and barriers for urban small cell deployments. The biggest drivers, according to a Maravedis-Rethink survey of 40 operators commissioned by the Forum, are: improving overall capacity; generating revenue from new applications; filling in capacity holes; reducing the cost of delivering data; and improving coverage.
On the flipside, operators surveyed said the biggest barriers were: backhaul availability and cost; securing optimal sites; monetization; and network provisioning and management.
With such challenges remaining, it seems that small cells aren't quite ready to survive and thrive on a mass scale in the urban jungle.
And for all the latest on the key small cell sector developments, check out Light Reading's Small Cells content track.
— Michelle Donegan, contributing editor, special to Light Reading