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How small cells are becoming an integral part of futuristic mobile networks?

8 May

LTE as a technology and air interface has been hogging the bulk of limelight in the world of wireless communications. But another strategically crucial technology that many major mobile operators globally are going after is the small cell. In simple terms, small cell is a miniature version of the traditional macrocell. It compresses the attributes of a cell tower like radios and antennas into a low power, portable and easy to deploy radio device. Small cells typically have a range varying from 10 meters to a few hundred meters and are used by operators to either offload traffic from the macro network in a high density short range environment or to strengthen the range and efficiency of a mobile network. Before going into further details about small cells, have a look at the following diagram that illustrates how they fit into an operator’s network and strategy.

Small Cell Network

As seen in the image above, small cells provide enhanced coverage and capacity both indoors and outdoors. Umbrella coverage is provided by the macrocell. Microcells and picocells are designed to support hundreds of users and can be used in smaller networks that are not necessarily inside the range of a macrocell. Residential areas that are located outside the range of a cell network can deploy femtocells for better signal and bandwidth indoors. WiFi can be utilized for traffic offload or can serve as a standalone high speed short range network. Following are some of the advantages that small cells bring to the table –

  • Augmented coverage and capacity – The quality of signal on a device and whether that signal is good enough for multimedia data browsing are two factors that decide a customer’s experience in the mobile world nowadays. Small cells bring ubiquity to this idea, along with the added advantage of low latency. So whether you are in a packed stadium or office basement, you will be covered.
  • Superior in-building and cell edge performance – Contemporary wireless networks regularly face issues of poor coverage inside buildings and in areas far away from the cell tower. Small cells significantly improve the overall experience in such circumstances.
  • Support for various environments – The main conclusion to be drawn from the diagram above is that these tiny base stations find utility in multiple scenarios. Femtocells inside a house not only provide 3G or higher level speeds, they also reduce strain on the user devices’ battery. And all this is achieved by using the Internet service provider’s backhaul. At an enterprise level, microcells enhance service quality in the highly dense office environment. Similarly, they can be equally effective in remote rural or dense urban spaces.
  • Easier technology integration – Small cells can be integrated with all flavors of 3G, LTE, LTE-Advanced and WiFi technologies. An operator’s small cell strategy could be influenced by the type of wireless technologies it has deployed, the area of service and regional demand. Microcells, picocells and femtocells are fortunately compatible with all major types of wireless networks.
  • Higher spectrum bands are welcome – Recently, the mobile network providers have been fighting a battle for the lower band spectrum below 1 GHz. But since limited propagation characteristics are not an issue for these miniscule networks, and more bits/Hz are required, spectrum over 2 GHz is considered good. The FCC in US has been pushing for 3.5 GHz spectrum for small cell networks. Some stakeholders have asked for unlicensed spectrum for such networks. Europe is said to be discussing the 2.3 GHz TD-LTE spectrum this purpose.
  • Long term solution for the operator – Even though more base stations and state-of-the-art technologies can be deployed to temporarily resolve network congestion issues, the demand will generally exceed the supply. However, small cells are designed to offer adequate network resources to handle growing data demand for a few years within a specific environment.
  • Attractive business case – The reduced capital and operational expenditure (CAPEX/OPEX) involved in the small cell ecosystem has made them a tempting business proposition for the mobile service provider. Studies have shown that the cost of radio equipment for small cells could be just one-tenth of the corresponding costs for a macrocell. The ease, flexibility and swiftness of deployment make such networks even more appealing.

Many operators and vendors around the globe showcased their small cell strategy and progress at the Mobile World Congress (MWC) in Barcelona earlier this year. Vodafone emphasized that this technology is vital to their network portfolio. The telco plans to deploy about 70,000 small cells within the next 2 years. Korea Telecom announced that they have 18,000 such cells already active in urban areas of the country. Samsung Mobile was tapped by Verizon as a vendor for indoor LTE small cell solutions. Verizon already had similar partnerships with both Alcatel-Lucent and Ericsson for indoor enterprise and outdoor environments. TIM Brazil, the country’s second largest operator, shared details about a deal with Alcatel-Lucent at MWC that will integrate femtocells into the carrier’s 3G network. SingTel from Singapore has been investing in these tiny networks too and has contracted Ericsson for the deployment. Many other small cell related developments have been picking up in the last year or so. AT&T’s 3G small cells are available in 18 states across the US. The operator has committed to deploying 40,000 multimode little base stations by the end of 2015. Sprint has been testing indoor and outdoor small cells for many months and intends a commercial launch later this year. The telco has also been running trials with Qualcomm’s network equipment. World’s biggest wireless service provider by subscribers, China Mobile, recently showed off a self-organizing outdoor small cell backhaul system as part of its TD-LTE network. Japan’s NTT Docomo has been using multiband small cell base stations for more than a year in some of its major markets. Note that as of now, most small cell networks operate on service provider’s existing spectrum holdings. But in the near future, dedicated airwaves could be allocated for these networks.

Multiple recent studies and analyses have predicted a ramp up in the small cell market. Infonetics Research has reported that small cell revenue was a modest $771 million last year but will grow by 65% to $1.3 billion this year. According to their report, 642,000 small cell units were shipped last year and about half of them were 3G, although LTE is projected to take the lead this year. ABI Research forecasted $1.8 billion market for outdoor small cells in 2014. The Asia-Pacific region will represent half of the small cell market by 2019. Allied Market Research put the global femtocell market size at $305 million in 2013 and predicted that this could grow more than ten-fold to $3.7 billion by 2020.

Although the predictions are upbeat, challenges remain for the small cell ecosystem. The cost and availability of backhaul for such stations is an issue. Because of municipal regulations, outdoor site acquisition can be a problematic process. The coordination and synchronization of these cells with local WiFi and the macro network is not as easy as it sounds. In urban scenarios, achieving line-of-sight may be technically difficult for low height in-building base stations. Despite these challenges, the overall small cell industry outlook is favorable. All major telcos and equipment providers have been evolving a small cell strategy. With consumers becoming increasingly intolerable towards bad wireless service, these tiny towers and stations are set to establish a niche but substantial market for themselves.

Source: http://wirelesstelecom.wordpress.com/2014/05/05/how-small-cells-are-becoming-an-integral-part-of-futuristic-mobile-networks/

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Mobile Fourth Wave: The Evolution of the Next Trillion Dollars

2 Sep
2001
Smartphone image copyright Nik Merkulov 

We are entering the golden age of mobile. Mobile has become the most critical tool to enhance productivity and drive human ingenuity and technological growth. And the global mobile market will reach $1.65 trillion in revenue this year. Over the next decade, that revenue number will more than double. If we segment the sources of this revenue, there will be a drastic shift over the course of the next 10 years. During the last decade, voice accounted for over 55 percent of the total revenue, data access 17 percent, and the over-the-top and digital services a mere three percent. Over the next decade, we expect mobile digital services to be the leading revenue-generating category for the industry, with approximately 30 percent of the total revenue. Voice will represent less than 21 percent.

There is already a significant shift in revenue structures for many players. The traditional revenue curves of voice and messaging are declining in most markets. Mobile data access, while still in its infancy in many markets, is starting to face significant margin pressure. As such, the industry has to invest in building a healthy ecosystem on the back of the fourth wave — the OTT and digital services. The revenue generated on the fourth wave is going to be massive, but much more distributed than the previous curves. It will end up being a multi-trillion-dollar market in a matter of a decade — growing much faster and scaling to much greater heights than previous revenue curves.

Vodafone, one of the biggest mobile operators in the world, recently reported that in each of its 21 markets, voice and messaging declined (YOY). In some markets, like Italy, even the data access segment suffered negative growth. However, what was more disturbing was that the increase in access revenue didn’t negate the decline in voice and messaging revenue in any market. The net revenue declined in every single market, no matter which geography it belonged to. The net effect was that the overall revenue declined by nine percent, despite data access revenue growing by eight percent, because the overall voice and messaging revenue streams suffered double-digit losses. Once the access revenue started to decline (and it is already happening to some of the operators), these companies will have to take some drastic measures to attain growth. The investment and a clear strategy on the fourth wave will become even more urgent. They will have to find a way to become Digital Lifestyle Solution Providers.

revgrowthcurve

So, what is the mobile fourth wave, and who are the dominant players today? The fourth wave is not a single entity or a functional block like voice, messaging or data access, but is made up of dozens of new application areas, some of which have not even been dreamt up yet. As such, this portfolio of services requires a different skill set for both development and monetization. Another key difference in the competitive landscape is that the biggest competitors for these services (depending on the region) might not be another operator but the Internet players who are well funded, nimble and very ambitious. The services range from horizontal offerings such as mobile cloud; commerce and payments; security; analytics; and risk management to mobile being tightly integrated with the vertical industries such as retail, health, education, auto, home, energy and media. Mobile will change every vertical from the ground up, and that’s what will define the mobile fourth wave.

In the past, the Top 10 players by revenue were always mobile operators. If we take a look at the Top 10 players by revenue on the fourth wave, there are only five operators on the list. The Internet players like Apple, Google, Amazon, Starbucks and eBay are generating more revenue on this curve than some of the incumbent players. However, some of the operators like AT&T, KDDI, NTT DoCoMo, Telefonica and Verizon have been investing steadily on the fourth curve for some time. The two Japanese operators on the list have even started to report the digital revenue in their financials.

Just as data represents 50 percent or more of their overall revenue, we expect that, for some of these operators, digital will represent more than 50 percent of their data revenue within five years. Relatively smaller operators like Sprint, Turkcell, SingTel and Telstra are also investing in new service areas that will change how operators see their opportunities, competition and revenue streams.

topplayers

This shift to digital has larger implications, as well. Countries with archaic labor laws that don’t afford companies the flexibility needed to be digital players are going to be at a disadvantage. It is one thing to have figured out the strategy and the areas to invest in, and it is completely another to execute with the focus and tenacity of an upstart. If companies are not able to assemble the right talents to pursue the virgin markets, someone else will. Such players will see decline in their revenues and become targets for M&A. Some of this is already evident in the European markets, which are also plagued by economic woes. Regulators will have a tough task ahead of them in evaluating some unconventional M&As in the coming years.

The shift to digital will also have an impact on the rest of the ecosystem. The infrastructure providers will have to develop expertise in services that can be sold in partnership with the operators. Device OEMs without a credible digital-services portfolio will find it hard to compete just on product or on price. The Internet players will have to form alliances to find distribution and scale. The emergence of the fourth wave is good news for startups. Instead of just looking toward Google or Apple, the exit route now includes the operator landscape, as well. In fact, some of the operators have been making strategic acquisitions in specific segments over the last few years — Telefonica acquired AxisMed, Brazil’s largest chronic-care management company; Verizon acquired Hughes Telematics; and SingTel acquired Amobee.

For any telecom operator looking to enter the digital realm, the strategic options and road map are fairly clear. First, it has to solidify and protect its core business and assets. A great broadband network is the table stakes to be considered a player in the digital ecosystem. Depending on the financial condition of the operator, the non-core assets should be slowly spun off or sold to potential buyers so that the company can squarely focus on preserving the core and on launching the digital business with full force. The digital business requires a portfolio management approach that requires a completely different mindset and skillset to navigate the competitive landscape.

The first three revenue growth curves have served the industry well, but now it is time for the industry to refocus its energies on the fourth curve that will completely redefine the mobile industry, its players and the revenue opportunities. Several new players will start to emerge that will create new revenue from applications and services that transform every industry vertical that contributes significantly to the global GDP. As players like Apple and Google continue to lead, mobile operators will have to regroup, collaborate and refocus to become digital players.

There will be hardly any vertical that is not transformed by the confluence of mobile broadband, cloud services and applications. In fact, the very notion of computing has changed drastically. The use of tablets and smartphones instead of PCs has altered the computing ecosystem. Players and enterprises who aren’t gearing up for this enormous opportunity will get assimilated.

The future of mobile is not just about the platform, but about what’s built on the platform. It is very clear that the winners will be defined by how they react to the fourth wave that will shape mobile industry’s next trillion dollars.

Source: http://allthingsd.com/20130826/mobile-fourth-wave-the-evolution-of-the-next-trillion-dollars/?mod=atd_homepage_carousel&utm_source=Triggermail&utm_medium=email&utm_term=Mobile+Insights&utm_campaign=Post+Blast+%28sai%29%3A+Where+Will+The+Next+%241+Trillion+In+Mobile+Come+From%3F

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