Huawei introduced LampSite, a local C-RAN small cell system for indoor applications, in early 2013.  Since then Ericsson, ZTE, Airvana, and Kathrein have announced scalable indoor C-RAN small cell systems.

Huawei and SpiderCloud announced multi-mode standalone small cells in 2013. Since then Ericsson, Alcatel-Lucent, and Cisco have announced indoor multi-mode products targeting small to medium sized buildings.

Ericsson and Nokia started emphasizing macro parity when moving from macro to small cell in 2013.  Now other vendors are working on beefing up the performance/features of their small cells.

With macro base station gross margins hovering around 20% for the initial H/W deployments and a combined mix of 35% to 40% when accounting for additional RF carriers and S/W, the question is if vendors will be able to differentiate the products to maintain these margins as BTS deployments shift from macro to small cells outdoors and larger indoor buildings and eventually to medium sized buildings?

Vendors seem to focus on the following features/benefits to stand out:

  • Coordination
  • Scale
  • Capacity
  • Macro Parity
  • WiFi Footprint
  • Time-to-Install
  • Upgrade path
  • Services
  • Aesthetics
  • Breadth of portfolio.

Coordination

The objectives of radio coordination and coordination between cell layers are to improve the performance and reduce the number of BTSs required to cover a certain area.

Ericsson has the largest macro installed base (Dell’Oro Group estimates) and is also a big proponent of introducing coordinated small cells.  The message seems to be resonating with operators as Ericsson is recording a lot of small cell wins.   We have received feedback from larger Tier1 operators suggesting they want to deploy coordinated small cells, but they also want more vendor options and in some cases (if signal is weak indoors) the level of coordination is not as important, and it could make sense to mix the macro and small cell vendors.

If the government allocates specific bands such as the 3.55 to 3.7 GHz band to small cells, the concept of coordinating macro and small cells will not be as important.  Though longer term it is safe to assume that carriers will need to optimize all available spectrum assets.

 

Scale

Building sizes vary significantly.  Ericsson, Huawei, Nokia, and SpiderCloud have focused some of their marketing messages on the scalability of their products which play an important role for larger buildings. Ericsson and Huawei targets buildings greater than 50 K sq. ft. with their distributed or local C-RAN small cell radio systems.  Ericsson’s Radio Dot can support up to 96 APs while Huawei’s LampSite system can connect up to 32 picos.  SpiderCloud’s indoor system targets buildings ranging from 100 K to 1 M sq. ft.  ZTE and Airvana have also announced local C-RAN scalable small cell solutions targeting larger buildings. Alcatel-Lucent announced that its new enterprise small cell can be grouped to offer seamless handover for large scale deployments.  And Nokia’s picos and micros can be turned into a FlexiZone for large scale deployments.

 

Macro Parity

Ericsson, Nokia, and Huawei have highlighted macro parity with their small cell portfolios resulting in comparable performance when moving between macro and small cell and cost/time advantages using same platform on macro and small cells when rolling out new features/enhancements.  Alcatel-Lucent, through its partnership with Qualcomm, has plans to include LTE-CA features in its new indoor small cell.

 

WiFi Footprint

Surprise or not, small cell vendors with superior WiFi technology have not used this to a greater extent in their overall marketing message.  But what we have seen is that vendors with larger WiFi footprints are trying to leverage the existing installed base to complement with 3G/4G.

 

Time-to-Install

Vendors are starting to advertise how quickly the small cell can be installed.  Ericsson claims its latest RBS6402 product can be up and running in less than 10 minutes while SpiderCloud can address the installation in a couple of days for a larger enterprise.

 

Upgrade path

Carriers want to leverage new features/options as they become available with minimal disruption.  Ericsson announced that its RBS6402 will come configured (and tested) with 10 bands ensuring some future proofing in the event of spectrum re-farming down the road.

 

Services

At the end of the day, a product that can deliver 300 or 450 Mbit/s using LTE-A (CA) is only so valuable if it can’t be installed in the right location.  And given the changes the shift from macro to small cell introduces when it comes to site identification/permitting/design/analysis/installation/maintenance/optimization, it makes sense that vendors are placing more emphasis on improving their services and partnership portfolios.

 

Aesthetics

Some operators have openly expressed their dissatisfaction with the appearance of the small cell products available on the market.  Vendors are listening and this will be an increasingly important aspect of the products as the distance to the end user shrinks.

 

Breadth of portfolio

Some vendors such as Alcatel-Lucent cover the residential, non-residential indoor, and non-residential outdoor small cell markets with products ranging from a few mW in output power to up to 5 W.  Ericsson and Huawei have stayed away from addressing the home small cell market and instead have introduced a wide range of products to address all the possible deployment scenarios for carrier small cell deployments in enterprises and urban settings.

 

In other words, it might be logical to assume that feature/spec differentiation will become increasingly challenging as the RF output power shrinks and feature/benefits converge.  But given the wide range of small cell deployment scenarios, there will be plenty of ways for the vendors to differentiate their overall solution.  Now if this will translate into a better or worse margin profile than the macro base station, it remains to be seen…

 


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Posted by Stefan Pongratz on October 17, 2014

About Stefan

Stefan Pongratz joined Dell’Oro Group in 2010 and is responsible for the firm’s Carrier Economics, and Mobile RAN market research programs. While at the firm, Stefan has expanded the Mobile RAN research adding significant detail on LTE and as authored several Advanced Research Reports on the wireless market.