Small cells

Verizon Scales Up Small Cells, AT&T Cuts Back

It appears the US's two largest carriers have done a flip-flop on small cells as long-time small cells proponent AT&T is scaling back its focus on the technology, while once-reluctant Verizon is ramping it up.

Verizon Communications Inc. (NYSE: VZ) Executive Vice President and CFO Fran Shammo said on Tuesday that the carrier would use small cells to bolster network capacity in markets such as Chicago where it didn't win AWS spectrum. He echoed comments he made last month that Verizon would invest $500 million of its $17.5 billion to $18 billion capital outlook in network densification, including with small cells. The CFO said that investment in macrocells will go down over time, as the carrier puts most of its resources into small cells and in-building coverage. (See Verizon Allocating $500M to Small Cells.)

His comments, made today at a Deutsche Bank conference, come a few days after AT&T Inc. (NYSE: T) confirmed it is backing off its plans to deploy 40,000 small cells on its network by the end of this year. The carrier told FierceWireless that its 2014 acquisition of Leap Wireless gave it enough additional spectrum and towers to adjust its original target. (See AT&T Gets 'Opportunistic' With 4G Small Cells.)

"While we originally gave a target for our small cell deployment, with our Leap acquisition in 2014, we withdrew this guidance," AT&T confirmed in a statement to Light Reading. "The Leap deal gave us additional spectrum and towers that allowed us to pull back on our original target because we added more macro sites, providing us additional capacity to meet the rising traffic demands."

The decision is surprising as AT&T was a first mover in both indoor and outdoor small cells and also one of the most vocal advocates for multi-standard devices, which it says are now planned for "later this year." It even started including small cell mentions in its commercials last year to explain it network improvements to its customers. (See AT&T Talks Small Cells, DAS in New Ads.)

For more on small cells, head to the small cells content channel here on Light Reading.

That said, the flip-flop is not hard to understand for either AT&T or Verizon. Market dynamics are always changing based on spectrum acquisition, mergers and advances in technologies. At Mobile World Congress, for example, innovative startups such as Artemis, Kumu Networks and Badu Networks were also showing operators how to get more out of their existing networks. (See Artemis's pCell Network Coming Soon Via Dish and Juniper Veteran Is New Kumu Networks CEO.)

Small cells are quick and easy to deploy, which is what is attracting Verizon to them, but they also require backhaul to every single device, which is likely a challenge that AT&T faced in the outdoor market. They are one technology that's truly evaluated on a market-by-market, even enterprise-by-enterprise, basis. (See AT&T Readies LTE-Only Small Cells, Eyes Multimode by 2015 and AT&T Turns to DOCSIS for Small Cell Backhaul.)

I don't think we'll see a slowdown in the small cell momentum that we've already seen picking up this year -- primarily in the enterprise -- especially as new technologies such as LTE-Unlicensed bring new uses to the mini-basestations. But I also wouldn't be surprised if operator plans and projections change again as the market continues to change as well. (See LTE Small Cells Set to Be Big in 2015.)

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

sarahthomas1011 3/10/2015 | 1:23:46 PM
Re: AT&T statement Ostensibly, it's still small cells. I'd love to know how many small cells AT&T currently has deployed, as well as by how much it's scaling back. I don't think we're going to get those numbers anytime soon, but I'd think it's still planning big small cell deployments in major uban markets. In December, a spokesperson said MSMs were coming first half of 2015, but looks like that could be a bit later too.
milan03 3/10/2015 | 1:20:07 PM
Re: AT&T statement Wow. While I agree that it's smart to leverage Leap existing macro infrastructure where available, what's their densification strategy for mega markets like New York City, LA, SFO where they don't have any Leap assets? AT&T's LTE network hasn't necessarily been the leader in speeds or capacity in Top 25 Markets for a while now. 

This could get really ugly for their urban subcribers.

sarahthomas1011 3/10/2015 | 11:15:05 AM
AT&T statement I asked AT&T about how many small cells it will deploy this year and when it would launch MSMs, and it provided us with the statement it gave Fierce. Here's the full statement: 

While we originally gave a target for our small cell deployment, with our Leap acquisition in 2014, we withdrew this guidance. The Leap deal gave us additional spectrum and towers that allowed us to pull back on our original target because we added more macro sites, providing us additional capacity to meet the rising traffic demands.

 We continue to be a leader in the research and deployment of small cell solutions with thousands of 3G and LTE small cells deployed in high-rise, outdoor, and indoor locations. Small cells remain a key part of our advanced network toolset but we're also finding that other technology advancements are helping us reach our goals in reliability and performance so we may not need to deploy as many small cells in our current deployment cycles as our initial plans from more than two years ago before the Leap acquisition indicate. That's part of the technology business. AT&T was one of the first carriers globally to deploy its metrocell solution in both indoor and outdoor environments and we are deploying small cells where and when they are the best network solution available to improve our customers' network experience.

Through investment in small cells, AT&T is supporting its customers' growing desire for high-quality, fast wireless services. Our small cell strategy has increased reliability and speeds for our customers in previously difficult to serve areas. AT&T has a proven track record of pushing the industry forward through its leadership and vision in this space. This began with the HetNet Analysis and Resource Planning, or HARP, tool developed by AT&T Labs. Created by our scientists and network engineers, the HARP tool uses state-of-the-art radio propagation and mathematical programming models to determine optimal locations to place small cells, allowing us to more quickly and efficiently deploy them. Later this year we also plan to introduce a multi-standard metrocell solution that we are currently testing in our labs. This solution will bring Wi-Fi, 3G and 4G LTE coverage to our customers all in one device.

sarahthomas1011 3/10/2015 | 11:09:09 AM
Sprint small cells Sprint is the one carrier we haven't heard a lot about small cells from, at least not since Iyad Tarazi left a year ago. He was working hard on public access LTE picocells before he left. I've asked the company for an update now.

T-Mobile has also told us it only sees small cells as a niche play, which surprised Small Cell Forum CEO Sue Monahan, who said it's been very involved with the Forum. Maybe it will be changing its tune as well.
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