So here at Maravedis-Rethink, we’ve based our top five predictions for 2014 on what the world’s top 100 4G operators have been telling us in our most recent surveys, as well as a year of intense analysis and forecasting of the mobile infrastructure market.
Yes, as many people are predicting, mobile network capex will recover in 2014 after a stagnant period when the LTE boost was neutralized by recession and delayed deployments. However, the OEMs shouldn’t listen to their own wishful thinking too hard – 2014 will be tough on the equipment side. A shift by LTE frontrunners from coverage to capacity will boost investment, but there will be factors keeping actual capex growth in check – falling prices, increased use of Wi-Fi, rising interest in RAN sharing and, for small cells, neutral host. The overall capex spend on the access network will grow by 10% compared to 2013, but the bulk of that will be in network software.
The main elements of the HetNet which will move from slideware to reality in 2014 will be Carrier Wi-Fi and new-look indoor networks. Standards like Passpoint and Next Generation Hotspot will drive integration of Wi-Fi and some carriers will start to deploy multimode cellular/Wi-Fi access points. These will account for 10% of small cells rolled out in 2014, rising to 75% by 2018. Metrocell growth will be driven by indoor and enterprise coverage in most cases, as carriers continue to battle with site and backhaul issues, but by the end of the year, there will be significant urban projects underway.
It’s usually a kiss of death to proclaim ‘the year of’ anything, but we really do have that confidence about LTE-Advanced, or at least a few elements of the long menu of 4G enhancements in Releases 10 and 11. Carriers have rolled out LTE more quickly than was forecast a few years ago, but – as with UMTS and HSPA – most know basic LTE is a conventional capacity/coverage/data rate upgrade, while LTE-A will be needed to deliver radical new services and support a new network architecture. Carrier aggregation is the first feature to be widely supported, as operators chase far more spectrum capacity than auctions will ever deliver. Maravedis-Rethink’s RAN Service forecasts find that 13% of new LTE sites will support interband CA in 2014, rising to 82% by 2018. Other LTE-A features which will start to roll out next year will be HetNet-related – eICIC to facilitate small cells, CoMP to expand macrocell performance, and advanced MIMO for sheer performance.
One of the biggest challenges for MNOs in 2014 is figuring out how to make money from the internet of things. That will not be a revolution in itself, but a continuation of existing M2M trends – most IoT activity in 2014 will be in traditional M2M sectors like automotive and industrial. However, as these applications start to require broadband rates, and then the intelligent home market grows, operators will have the chance to play a big role in the value chain via their SIM cards. The company which will be assured a starring role in the IoT will be Qualcomm, which is masterfully positioning its AllJoyn protocol as an industry standard while much of the ecosystem dithers.
Carriers are extremely interested in virtualization in many areas of their networks, for the efficiency, cost reduction and flexibility it can support. The packet core will be the area to be virtualized first on a wide scale, while the RAN will follow quickly in the big Asian markets, but slowly everywhere else. Full-blown SDN will not be a mainstream choice for five years or more, but one key element of the broad ‘software network’ picture will be NFV (Network Functions Virtualization). Because this is specifically geared to carrier networks and already has concrete specifications, it will take off rapidly, even though it does not solve all the issues operators are facing. According to Maravedis-Rethink’s latest report, ‘The Network is Software Now: adapting to the new mobile economics 2013-2018’, over 60% of operators adopting some form of SDN in 2014 will rely on NFV alone, while a further 12% will support NFV and other technologies such as C-RAN.