Small Cells Technology Fuels New Consumer Market Opportunities

Next Generation Communications Blog

Small Cells Technology Fuels New Consumer Market Opportunities

By Erin Harrison

By now, you have probably heard about and read the hype about small cells technology – tiny indoor cellular base stations installed in a household that connect the fixed broadband network to mobile devices within the residence. By increasing service quality and connection speeds indoors, small cells can improve voice calls and provide faster, more reliable data connections and coverage.

Small cells are low-powered radio access points that improve indoor and outdoor coverage to increase capacity and offload traffic – as much as 80 percent during peak times. Alcatel-Lucent, one of the leading femtocell companies, offers the 9360 portfolio of small cells.

According to Alcatel-Lucent research findings from five countries across North America, Europe and Asia, the small cells marketplace in the United States, the United Kingdom, Germany, Singapore and Taiwan will be worth €6.1 billion in total by 2014, with over 34 million subscribers predominantly using unlimited voice, video calling and SMS services.  The findings are highlighted in Alcatel-Lucent’s whitepaper titled, “Small Cells Technology Fuels New Consumer Market Opportunities.”

Alcatel-Lucent holds 25 mobile operator commercial femtocell deployment agreements and is supporting more than 20 trials, according to company officials. Publicly announced customers include: Telefonica in Spain, Etisalat and du in the United Arab Emirates (UAE), MegaFon in Russia, and Vodafone Group, who selected Alcatel-Lucent as its preferred vendor for nationwide “Sure Signal” femtocell services in the UK and New Zealand.

The cost-savings benefits alone are enough to bring attention to this technology: Alcatel-Lucent predicts that by 2014, total CAPEX and OPEX savings as a percentage of revenue from the introduction of small cells will be:

  • 117 percent in the U.S.
  • 57 percent in the U.K.
  • 48 percent in Germany
  • 350 percent in Singapore
  • 168 percent in Taiwan.

The most significant results for operators can be found among consumers that currently bundle their telecommunications services: Between 50 percent and 80 percent would opt for a small cells package if it were available, according to Alcatel-Lucent. “This percentage translates into millions of potential subscribers in some markets, making small cells the key upcoming growth service of the future,” the whitepaper said.

The interest level in small cells services is across all countries. In terms of popularity, the white paper found:

  • People with an unlimited calling plan ranked small cells services as most popular
  • Not far behind were those with an unlimited video calling and SMS plan
  • In most countries, the family-oriented heavy-user segment – a.k.a. those with high expectations of quality and a high number of hours spent online and making calls – was “markedly ahead in its enthusiasm for the services.”

Looking ahead, while small cells benefit 3G service deployments, their importance will only grow as the industry moves towards higher capacity 4G / LTE, especially in urban environments.

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