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Efficient Deployment - A Key Factor In The Success Of Small Cell Networks

|Includes:Nokia Corporation (NOK), T

Small cells, including pico, femto and microcellular networks are increasingly moving to the forefront of industry consciousness as the need to augment available bandwidth has become seen as an increasingly acute customer need. This is because, when successfully deployed, small cell networks can address many of the key challenges faced by operators, including by increasing cellular capacity, and improving user experience and coverage depth, particularly inside buildings

These sentiments are echoed in a recent post from Frank Rayal in, stating that small cell base stations offer a number of key advantages to traditional macrocellular networks, and, in particular, "provide higher capacity than macro cells because of the deployment scenario." Further, "[b]ecause these base stations are mounted low above ground, they are less susceptible to interference. This translates directly into higher capacity."

Additional benefits noted by Rayal include:

"1 Lower delay: users will experience lower latency for data services and will enjoy faster download and upload time. 2 In-building coverage: small cells provide better outdoor-to-indoor coverage. Considering that 40 per cent of mobile traffic originates from home and 25 per cent from work, this can represent a significant source of revenue for network operators. 3. Better cell-edge coverage: Macro base stations provide poor service at the cell edge which includes a large percentage of the cell area. Small cells provide better cell-edge performance, particularly for the uplink than large cells."

Rayal concludes that "[t]he fact that small cells provide almost double the capacity of a macro cell is why they are set to become an important part in addressing the capacity crunch in wireless networks.

Notwithstanding, if small cell deployments stand any significant chance of success, certain logistical and business-case hurdles need to be overcome. Several of these hurdles are aptly summarized in a recent Morgan Stanley report entitled "Towers: 2013 - Looks Good, But Don't Expect a Repeat of 2012; Raising Price Targets." Significantly, the report highlights a number of concerns facing the small cell industry including "(1) developing an attractive business model, (2) the role of the tower operators, and (3) technology risk." Among the more successful deployment types outlined by the report are "heterogeneous network designs, such as Hetnet by Ericsson(Nasdaq: ERIC), Flexi Zone by Nokia Siemens (NYSE: NOK), and SON (self-optimizing network) by Intucell, that follow the user throughout the network and make for a smooth transition from one cell to the next. In addition to DAS initiatives, AT&T (NYSE: T) is the first operator in North America to deploy Intucell's SON."

Overcoming the structural challenges facing small cell network construction will be a necessary factor in the successful deployment of small cell networks, and the isolation of viable solutions in this respect is likely to be a major factor in the successful deployment of small cell networks.

For more information on these and other developments in the small cells' industry, please visit

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Stocks: NOK, T