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Three million small cells to drive $2.1 billion market by 2016


Infonetics Research has put a value on the medium-term market for "small cells": it thinks there will be three million low power femto, pico and microcells sold in 2016, making a market worth $2.1 billion. The chief driver of small cell growth will be the need to derive extra capacity from existing spectrum, Infonetics said.

"Mobile broadband is shifting the game to capacity upgrades," said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. "Therefore, the chief objective is to complement and enhance the macrocell layer from a capacity standpoint with a new breed of low-power nodes like public space femtocells and WiFi."

Téral said that dividing the macro layers into smaller cells remains challenging due to inter-cell interference and backhaul issues. "The question is: how small can the cell be? Because the smaller the cell, the higher the number of units required to cover an area, and that will determine the true size of the small cell market," he added.

Principal analyst and Infonetics co-founder Michael Howard said, "Our small cell forecast is not a pie-in-the-sky, new-technology-honeymoon forecast based on futuristic 2020 technology visions of small cells on every city block. We developed our forecasts after a solid year of work by several Infonetics analysts and our research team with mobile operators, manufacturers, and chip suppliers. We examined, discussed, challenged, and listened — often on multiple occasions — to the major footprint operators to learn about their thinking, planning, testing, and trialing across their realities of today's operations, budgets, target small cell pricing, sizing and form-factor requirements, emerging technology issues, location-sensitive pico-to-macrocell ratios, and small cell layer automation and coordination with the macro layer. And in all of this, we explored with them what they think is realistic over the next few years."

Some highlights from the report include:

  • For the next 3 years or so, most operators are planning small cells only in the urban core
  • Infonetics expects public space femtocells to make up more than 50% of all small cells shipped in 2012
  • In 2013, Infonetics expects 3G small cells to make up 63% of global small cell shipments, with 4G small cells kicking off and ramping up rapidly to make up 37%
  • 4G small cell shipments will overtake 3G small cells by 2015
  • From a geographic perspective, early femtocell adopters such as AT&T, Softbank, and Vodafone and macro network density dictate which regions represent the largest small cell opportunities, with Asia Pacific expected to lead with 44% of all units shipped in 2012, followed by EMEA with 32%.