Crossing the chasm: Small cell industry 2016

Sue Monahan, CEO, Small Cell Forum

January 2016

Crossing the Chasm:

Important new report includes data from: •  Market Status Report, Mobile

Experts, November 2015 – available exclusively to SCF members

•  Potential for small cells infrastructure-as-a-service in the US, iGR, Q3 2015

•  Small cell operator survey Q3 2015, Rethink Technology Research

Download the full report at scf.io

Crossing the Chasm: new report published

November 2015

Softbank's rural and remote small cells exploit seasonal variations to reduce their satellite backhaul bandwidth http://goo.gl/lBPLBf

http://scf.io/case/005

Secluded Station Peaks on public holidays

Ski Resort used in winter

Mountain Trail Most used in summer

Rural & Remote Small Cells in Japan

More examples

Alcatel Lucent small cells integrate with street furniture leveraging existing site services organisation http://goo.gl/TKFjz5

http://scf.io/case/011

Cisco upgrade existing Wi-Fi access points to add a great 3G voice service with low incremental CapEx & OpEx http://goo.gl/lsbA0W

University Case Study Deployed 3G indoor small cells over 1700sqm university campus Leveraging existing Wi-Fi sites and infrastructure to add great 3G voice

EcNo ≤ - 7dB 98% of walk route EcNo ≥ - 9dB 97% of walk route

Before: 3G Macro After: Macro + small cells KPIs

Call setup success Call drop ratio

Open Source small cells from Lime Microsystems enable Mexican operator to serve remote village with very low ARPU http://goo.gl/MKXO8p

Bringing cellular to disadvantaged rural communities

Solution Leverage open source: •  Base station with a built-in PBX from Fairwaves •  Uses Lime field-programmable RF devices •  Flexible RF platform, covers all cellular bands •  Allows villagers to make free calls to one another •  Enhanced medical coverage •  14 concurrent voice connections •  Long distance calls via satellite internet •  Simple “do-it-yourself” installation •  Programmability mitigates interference

More info: www.eetimes.com/author.asp?section_id=36&doc_id=1320012

http://scf.io/case/004

Challenge: bringing coverage to the remote village of Santa Maria Yaviche in Mexico with very low ARPU

•  Shipments rise from 4.05m to 10.37m units 2014-20

•  Enterprise important engine for growth – 110% upswing in 2015

•  Large urban rollouts started in 2015, shipments up fourfold in 2015

•  2014 – market matured; 2015 – growth accelerated

The big question is: ‘How do I monetize & deploy at scale?’

Argument for small cells has been won

January 2016

By 2020 small cells can achieve significant critical mass – installed base 7x macrocells. This means: •  Small cells will drive the RAN architectural

agenda •  Small cells at the heart of 5G and IoT •  Attractive volumes for whole ecosystem,

driving innovation This is a real turning point: Small Cells now own the debate

42,500,000

6,400,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

Small cell Macrocell

units

Seizing the opportunity

January 2016

7x more Small Cell

than Macrocell by 2020

January 2016

•  SCF achievement so far built on a single successful architecture and the main engine for immediate and continued growth

•  However, today no single architecture will suit huge range of future wireless use cases. A flexible approach is required to: •  address range of operator scenarios and services •  provide choice of architectures in line with spectrum, fiber, other considerations, while

maintaining underlying common standards

Meeting future network needs – broadening the remit

Base Station Densification Broader set of use cases NFV and SDN

Future generation deployments very different: Dense, automated, multiband, neutral host, separate layer, some virtualized Requires new approaches: •  Emergence of low-power radio heads, now

adopted within SCF definition •  First step in evolution towards virtualized

small cells with many split options •  Transition to virtualized RAN blurs

boundaries between conventional neutral-host DAS systems and new virtualized RAN architecture.

Today’s generation   Future generation  

Ad hoc, opportunistic   A well-planned second layer  

Small numbers   Dense  

Manually organized   SON  

Homogeneous cells   Move to Virtualization  

3G or LTE   Multimode including Wi-Fi  

Same spectrum as macro  

Many bands – including licence-exempt  

Single operator   Neutral host or shared ownership  

Meeting future network needs – optimized network architectures

January 2016

Key drivers to deploy small cells 2015-20: •  Cost capacity and

coverage still key •  Support new

revenue streams – eg. M2M

•  Harness new spectrum bands eg. 3.5GHz and above

•  First step to Virtualization

We will deliver workable architectures to address global drivers

Source: Rethink Technology Research January 2016

Particular acceleration in non-residential market, esp in countries where public WiFi less established North Africa slower to take off but overtakes in new deployments in 2019 CAGR 145% in N Africa, 95% in ME –higher than global CAGR of 66% for non-residential Region was generally slow to adopt 3G, but has leapfrogged in 4G. Some operators interested in dense 4G-first approach

Small cell adoption MENA

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2014 2015 2016 2017 2018 2019 2020

,000

North Africa Middle East

Deployments of new non-residential small cells Source: Rethink Technology Research

Patterns are different from those of other regions Emphasis on rural coverage, indoor quality and IoT higher than global average Capacity and cost are less serious constraints than in many regions (though still important) High interest in new architectures such as IoT and virtualisation, esp in Middle East Strong emphasis on smart cities Lower installed base of public Wi-Fi, raising profile of small cells

Small cell drivers MENA

50 48 48

30 25 25 23 23

16 11

29

41

29

41

12 18

59

35

24

12

0

10

20

30

40

50

60

70

% o

f op

erat

ors

Global MENA

% placing each driver in the top 3 Source: Rethink Technology Research

TCO and ROI, rather than capex, dominate the risks. Backhaul and site issues – less confidence than in some regions that these can be addressed. High bureaucracy in some countries. Less concern than global average about spectrum (heavy use of TDD) Relatively early stage market, so large scale automation and WiFi integration figure less highly than elsewhere, for now

Small cell barriers MENA

50

42 37 35 33

26 25 22

18

12

29

18

35

41

53

47

35

12

18

12

0

10

20

30

40

50

60

% o

f op

erat

ors

Global MENA % placing each barrier in the top 3 Source: Rethink Technology Research

Over 40% of MENA operators surveyed would bring forward roll-out by 12 months or more if their top concerns were addressed Deployment timescales are not fixed, but most need more practical help and confidence to cross the chasm High regional interest in some key Forum work items eg virtualisation, IoT, enterprise

Accelerating the timescales

0

5

10

15

20

25

30

35

40

No difference 6 months 12 months 24 months

% o

f M

NO

s

M East N Africa Global

Source: Rethink Technology Research

Building for the future

Small Cell Forum work program 2015/16

•  Our work is about supporting: •  new architectures •  new spectrum options •  new business cases •  new service models •  a broadening ecosystem •  real world use cases

Delivering needed industry knowledge through our new work program

Enterprise small cells

License-exempt spectrum

HetNet and SON

Virtualization

Multi-operator support

Delivering 5G and IoT

Our new work program: answering the question HOW?

January 2016

January 2016

Small Cell Forum – work program roadmap

Multi-operator

2013 2014 2015 2016 2017 2012

WI SI

LAA SC Wi-Fi with WBA

Home Enterprise

Urban Rural and Remote

Virtualization

License-exempt

HetNet & SON

R1 R2

R3 R4 R5

R5.1

R5.2 R6

definition of nFAPI China Mobile

Cisco, ip.access

Vodafone, Qualcomm

5G, IoT

Truphone, ip.access

AT&T, Ericsson, Airhop

Reliance Jio, Huawei

Kick-off

Deliverables Defined

Release

Enterprise Orange

Spidercloud, Huawei

R2

•  Installed base more than doubled 2015 (Source: Mobile Experts)

•  Wide target market – ie. from venues to factories to SoHo

•  62% of large US companies interested in small cells (Source: iGR)

•  Enterprise has higher than average interest in small cells for indoor coverage/voice, new services, IoT, Virtualization (Source: Rethink)

•  Drives new value chains – by 2020 only 20% of Enterprise small cells MNO-managed

286,350

639,327

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Q314 Q315 un

its

Enterprise: small cells enable a more effective Enterprise workforce

January 2016

+110% growth

during 2015

Many vRAN deployments will start in small cell layer •  43% of small cell deployers will also be

adopting Virtualization by 2018

Critical for SCF members to drive this work: •  nFAPI work will define best splits and

create unified platform; and •  Enable new deployment models which

lower barriers – eg. ‘as a service’, per-AP licensing

Small Cell Virtualization – enabling new deployment models

Conventional small cell Virtualized small cell

MAC

FAPI P5 & P7

PHY

Vendor Ext nFAPI

P5 & P7

nFAPI P5 & P7

PHY

Vendor Ext

MAC

RF

Vendor Ext

nFAPI Interworking

January 2016

January 2016

SCF drives interoperability and unity while supporting flexible use cases

Small cell Virtualization – answering the big questions

Topic Findings

What are the real business benefits of Virtualization in the RAN?

Identified centralization benefits, transport costs and MANO/automation elastic scaling capabilities

Are current small cell architectures well suited to Virtualization?

Yes – FAPI MAC/PHY decomposition well suited to provide Virtualization baseline

Can Virtualization deliver a phased roadmap – eg. aligned with longer-term 5G directions?

Yes – Flexible Virtualization over non-ideal transport now emerging as a core 5G requirement

How do we ensure Virtualization supports innovation across a multi-vendor ecosystem?

SCF’s nFAPI workstream set to accelerate multi-vendor PNF/VNF interoperability

January 2016

Small cell Virtualization – deliverables and timelines

nFAPI Definition

nFAPI Demonstration

PDCP/RLC Recom’tions

(ETSI ISG NFV) PoC

nFAPI Std Ownership

VNF SVC API/MEC

Multi-operator Scoping

2017

Placeholder for SVC engagement

Placeholder for Multi-Op engagement

Kick-off

Deliverables Complete

2015 2016

PNF Management

ETSI-MANO Recom’tions NET

Board

IOP

RPH

R5.1 R6

•  SON becomes essential as networks densify

•  By 2020, 40% of small cells deployed in hyper-dense environments (150 per km2)

•  SON must be interoperable and able to work with all technologies and with Virtualization

•  Absolute priority is to avoid fatal fragmentation – eg. Release 6 solutions and requirements, Plugfests, services API

HetNet and SON – enabling mass-market scale

January 2016

SCF is well placed to drive unlicensed as it is small cell-specific in higher band – LTE in 5GHz only applies to small cells. Work items include: •  Joint SCF/WBA taskforce delivering specification of the architecture & interfaces

of trusted WLAN networks - in particular, those aspects that were not considered by 3GPP

•  Delivering FAPI and nFAPI support for LTE-LAA/Wi-Fi coexistence •  Systematic assessment of Wi-Fi Calling, small cell VoLTE and over-the-top VoIP

against seven core criteria for carrier voice services – capacity, quality, security, coverage, mobility, deployment and cost

Architectural & performance implications of unlicensed usage

LTE unlicensed small cell

Unlicensed

Licensed anchor

Carrier aggregation LTE/LTE-U

© Small Cell Forum Ltd 2016

Work stream mission: “To make licensed radio small cells the preferred solution for vertical market, multi-operator solutions”

Work items include: •  Business case •  Existing and upcoming technology •  Regulatory •  Spectrum licensing – existing and new licensing regimes •  Existing deployments – Why they work and why aren’t there more of them?

Multi-operator/neutral host – delivering new opportunities

January 2016

•  SCF playing a leadership role in 5G debate

•  IoT and 5G networks – many areas unclear but will certainly be small cell driven

•  Allow operators to differentiate on a standard platform

•  Two key areas of SCF activity – ultra-density and fully service-oriented networks with open APIs

•  Forum submitted vision to 3GPP •  Work with NGMN, ETSI, GSMA,

4G Americas

Maximizing future potential in IoT and 5G

Service oriented networks •  Enterprise use cases

•  Open API •  Edge services

Ultra dense networks •  Deployment •  Backhaul/fronthaul

arch •  HetNet & SON

NGMN, MEC (ETSI, GSMA), 5GPPP

January 2016

January 2016

SCF is driving solutions for HetNet2020 that are: • Massively scalable, driving affordable economics and future growth • Directly responsible for new revenues, via applications and services that could not otherwise exist • Future-proofed, to take the risk out of deployment and allow for future use cases, even those which are currently unclear

Join us! Shape the future of small cells and the integrated HetNet

Join us – seize the opportunity

Crossing the Chasm: report published in November

scf.io January 2016