The business case for small cells can be challenging, especially for 3G. Adding Wi-Fi to small cells strengthens the business case.
Seatte, WA (PRWEB) November 05, 2012
Small cells and Wi-Fi are the most powerful tools that mobile operators have to increase data capacity in their networks. These technologies enable them to meet the demand from a growing number of subscribers who have enthusiastically embraced smartphones, tablets and other data devices, and who generate rapidly increasing traffic loads, due largely to video content. A new report from Senza Fili demonstrates that mobile operators that deploy small cells and Wi-Fi concurrently can cut their wireless data per-bit costs up to two-thirds, compared with macro-cell costs.
Most mobile operators don’t get to choose whether to use small cells or Wi-Fi. To meet their capacity density targets in the high-traffic locations where subscribers gather, operators need to deploy both small cells and Wi-Fi, side by side. And subscribers demand both: Wi-Fi for fast and inexpensive wireless access, and cellular for mobility and coverage. Senza Fili’s latest report, “The economics of small cells and Wi-Fi offload,” explores the business model for the coexistence of small cells and Wi-Fi within the same network and identifies strategies that enable mobile operators to optimize the utilization of network and spectrum resources and to minimize per-bit costs.
Operators not only stand to benefit from using both Wi-Fi and small cells to boost capacity, they also can reap additional gains by deploying both in the same small-cell enclosure, increasing the capacity of each small cell and integrating Wi-Fi traffic more tightly within the cellular network.
“By deploying LTE, 3G and Wi-Fi jointly as part of an integrated sublayer of small cells, operators can meet their capacity targets faster, leverage their existing Wi-Fi footprint, and significantly reduce their per-bit costs,” says Monica Paolini, the report’s author. “The business case for small cells can be challenging, especially for 3G. Adding Wi-Fi to small cells strengthens the business case.”
Findings from the total-cost-of-ownership (TCO) model presented in the report include:
- TCO for small cells and Wi-Fi ranges from 10% to 25% of the TCO for a macro cell, depending on the configuration of the small cell.
- Because opex plays a much larger role than capex in the small-cell business case, configurations that reduce opex – such as multi-sector and multi-interface small cells – lead to a more robust business case.
- The low marginal cost makes adding Wi-Fi, 3G or additional sectors to an LTE small cell an attractive proposition that reduces the number of sites a network operator must manage and increases capacity more rapidly.
- Even at low densities, LTE small cells and Wi-Fi quickly take on a dominant role, relative to macro cells, in transporting mobile traffic.
- Small cells and Wi-Fi enable operators to slash per-bit TCO by at least half. By combining cellular and Wi-Fi, operators can cut the per-bit TCO to a third of the TCO of macro cells.
The report is available at http://www.senzafiliconsulting.com and complements Senza Fili’s recent report “Backhaul for small cells: Finding the right cost/performance tradeoffs to meet the backhaul challenge,” also available from the company’s website.
About Senza Fili. Senza Fili provides advisory support on wireless data technologies and services. At Senza Fili we have in-depth expertise in financial modeling, market forecasts and research, white paper preparation, business plan support, RFP preparation and management, due diligence, and training. Our client base is international and spans the entire value chain: clients include wireline, fixed wireless, and mobile operators, enterprises and other vertical players, vendors, system integrators, investors, regulators, and industry associations.
We provide a bridge between technologies and services, helping our clients assess established and emerging technologies, leverage these technologies to support new or existing services, and build solid, profitable business models. Independent advice, a strong quantitative orientation, and an international perspective are the hallmarks of our work. For additional information, visit http://www.senzafiliconsulting.com.
+1 425 657 4991
monica (dot) paolini (at) senzafiliconsulting (dot) com