The HetNet Bible (Small Cells and Carrier WiFi) - Opportunities, Challenges, Strategies and Forecasts: With an Evaluation of DAS & Cloud

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1 The HetNet Bible (Small Cells and Carrier WiFi) - Opportunities, Challenges, Strategies and Forecasts: Revision Date: 10 May 2013

2 2.1.3 HetNets: An Evolution of Network Topology Driven by both technical and economic incentives, the next performance leap in mobile networks is coming from an evolution of network topology whereby wireless carriers will utilize a mix of macrocells, Distributed Antenna Systems (DAS) 1, small cells as well as WiFi access points in both licensed and unlicensed part of the wireless spectrum.. User Deployed Indoor Small Cells Overlay Macrocell Network Carrier Deployed Indoor/Outdoor Small Cells and WiFi Access Points Wireless Broadband Router Macrocell Backhaul Network Small Cell Backhaul Network Internet Mobile Network Core Figure 2: HetNet Architecture 1 Typically used with macrocells, small cells and WiFi deployments may also encompass Distributed Antenna Systems (DAS) to improve coverage 59

3 2.4 The Business Case: What is Driving the Small Cells and Carrier WiFi Market? Small cells and carrier WiFi deployments bring a unique set of advantages to both mobile network carriers and their subscribers alike Mobile Data Traffic: The Tsunami of 335 Exabytes The annual throughput of mobile data traffic is expected to increase from 58 Exabytes in 2013 to nearly 335 Exabytes in 2020, representing a 28% CAGR over the 7 year old period between 2013 and Western Europe North America Middle East & Africa Latin & Central America Eastern Europe Asia Pacific 0 Figure 6: Annual Global Throughput of Mobile Network Data Traffic by Region: (Exabytes) 67

4 This sixfold rise in annual traffic volume will undoubtedly be a major driver of investments for both small cell and carrier WiFi solutions, as macrocell deployments on their own will not have the capacity to support this traffic volume DAS (Distributed Antenna System) Carrier WiFi Small Cells Macrocell Network 50 0 Figure 7: Annual Global Throughput of Mobile Network Data Traffic by Access Network Type (Macrocell, Small Cells, Carrier WiFi, DAS): (Exabytes) Consequently we estimate that small cells and carrier WiFi networks will route much as 208 Exabytes or 62% of all mobile network traffic annually by the end of

5 Cloud Datacenter Base Station Pool for Centralized Processing Transport Network: Fiber Link Distributed Remote Radio Heads (RRHs) User Devices Figure 9: Cloud RAN Architecture A Cloud RAN setup can potentially provide greater data capacity than a traditional RAN setup, as the radio units can be densely populated. Furthermore, large data centers share the processing load across the whole network which can significantly reduce the total processing capacity required and simplifying maintenance and upgrade for new features and functionality. However, this approach does require extensive high capacity fiber connections to every radio head which may not be cost-effective or feasible in many territories. A major proponent of the technology, China Mobile has been working on Cloud RAN technology as early as It is expected that the new 75

6 3.1.2 S1: Integration into LTE Networks In a LTE network wireless carriers can use the 3GPP enodeb (enb) or Home Enhanced NodeB (HeNB) architectures to integrate small cells enb Small Cell Architecture With the enodeb architecture, small cells are integrated into the network in the same way as macrocells. In this implementation they use the S1 interface to communicate with the core network and the X2 interface to communicate with nearby macrocells and small cells. X2 enb S1 Mobile Network Core Small Cell (enb) S1 Small Cell (HeNB) Small Cell Gateway Figure 12: S1 Interface based Small Cell Integration in an LTE Network 81

7 4.2 Small Cell & Carrier WiFi Value Chain The small cells and carrier WiFi value chain is complex with many significant players across different segments of the market. SON Solution Chipset Developers Pure-Play Small Cell OEMs Core Network Embedded Component/ Software WiFi Access Point OEMs Core Network Infrastructure Embedded Technology Macrocell RAN OEMs DAS & Repeater Solutions Cloud RAN Solutions Other Technology 2G/3G/4G Wireless Carriers WiFi Connectivity Small Cells as a Service (SCaaS) Connectivity End Users Consumer and Enterprise Markets HetNet RAN Backhaul Solution Backhaul Figure 15: The Small Cells & Carrier WiFi Value Chain Discussed below are all sub-segments of the small cells and carrier WiFi value chain. 97

8 5.1.3 Small Cells as a Service (SCaaS) In the Small Cells as a Service (SCaaS) deployment approach, service providers 2 take full responsibility for some of the most complex aspects of a small cell deployment for the wireless carriers which may encompass (but not limited to) site acquisition, providing power supplies, and backhauling traffic. SCaaS providers would then allow wireless carriers to host small cells running in their own allocated spectrum. Small Cell RAN Infrastructure Backhaul Antennas Sites Housing Power Services likely to be provided by the Wireless Carrier Services likely to be provided by the SCaaS Provider Figure 16: SCaaS Provider and Wireless Carrier Responsibilities in a SCaaS Offering 2 Most SCaaS service providers are expected to be fixed line ISPs with a backhaul infrastructure in place 108

9 7.3 Key Issues Some of the key issues and challenges in the small cell backhaul market segment are discussed below Backhaul Sharing: Can Small Cells and Macrocells Share Resources? While it is a preferred opinion among wireless carriers, aggregating outdoor small cells with macrocell backhaul may prove to be a well challenging task. Consequently the opportunity for small cell backhauling has opened a new opportunity for investment, which will be a market worth nearly $6 Billion by Coverage Challenges Wired backhaul solutions are required to have to reach the small cell sites along or below ground or within buildings. Coverage will be closely tied to the presence of existing infrastructure, since the costs of installing new wired connectivity is high. Similarly, wireless solutions require consideration of the propagation environment between backhaul transceivers at the small cell and the other end point Capacity/Peak Throughput Challenges Compared to macrocells, small cells have fewer users with a high likelihood to cluster around macrocell sites. This increases opportunity to achieve peak throughputs. Peak user throughput may therefore be backhaul rather than air interface limited Will Millimeter Wave be the Preferred Outdoor Small Cell Backhaul Solution? Small cells are often mounted on street poles, building walls and traffic/streetlight poles among other ad-hoc locations. Driven by the relative ease of licensing and the short distance characteristics of millimeter waves, wireless carriers are expected to adopt the technology for their future small 118

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