Small-cells and Distributed Antenna Systems (DAS) have been used in mobile networks virtually since the inception of the industry, but have always been niche solutions in radio network environments that are dominated by macro-cells. Within the last decade, industry players have seen massive network traffic growth, culminating with an increased interest in small-cells and DAS, and strategies to enable their mass market adoption. Technology vendors have honed their small-cell and DAS platforms, and by 2008-09 time-frame, the mobile industry had established the goal for each small-cell deployment to cost less than USD 5000 on average.
Today the mobile industry is still struggling in enabling the mass market adoption of small-cells, which typically cost between USD 40,000 and 200,000 each and take 15-18 months to deploy. Many indoor environments continue to lack adequate coverage even in cases where the building and venue owners or enterprise occupants are willing to pay for the radio equipment costs. Industry pundits commonly attribute lack-luster small-cell adoption to back-haul and site acquisition challenges. However, we contend that the challenges are more systemic, and a consequence of current mobile operator processes and procedures, which are architected primarily for macro-cells. In particular, macro-cell deployments are driven through structured and centralized network planning and site acquisition processes.
We believe that these processes need to be decentralized for small-cell and DAS implementations in a similar manner to the approaches used in the past for femto-cells. With this approach the planning processes would focus on managing the inventory and network parameter optimization for small-cells and DAS systems, as they are deployed in an ad hoc manner with opportunistic site acquisition strategies. In addition, we believe that Centralized SON (C-SON) and capabilities for quarantining network elements are crucial in ensuring that small-cell and DAS deployments don’t have an adverse affect on overall network performance.
While the industry has made tremendous progress with small-cell and DAS platform technology innovation, we believe that there is the need to advance modular designs, and enable more alternatives for small-cell back-haul and front-haul transmission solutions. Notable examples include mesh networking, point-to-point and point-to-multi-point microwave and millimeter wave technologies, and innovative base-band distribution strategies, which eliminate the need for dedicated fiber front-haul.
The notion of enabling diverse transmission technologies and decentralized network planning and site acquisition is disruptive to traditional operations. However, we believe that it is necessary for small-cells and DAS to achieve meaningful market scale.
For more than a decade mobile industry rhetoric has anticipated large scale small-cell and distributed antenna system (DAS) adoption as being inevitable for mobile operators to address localized network capacity and coverage demands. In response to the anticipated demand for small-cells and DAS, technology vendors have made tremendous progress in innovating their platform architectures to lower unit costs, improve performance and reduce implementation complexity. However, even with these efforts, small-cell and DAS adoption has languished relative to market expectations. Small-cells saw initial success for residential implementations, under the guise of femto-cells, but have failed to achieve meaningful scale in other environments, such as outdoors, and in public venues. DAS solutions have been deployed in large venues and in some cases in outdoor environments, but to date have only captured less than 10 percent of the addressable market.
Many of the challenges associated with small-cells have been reported in the past. For example, in our 2010 report entitled Repositioning femto-cells for market success – A global perspective we identified the need for mobile operators to shift away from macro-cell centric operational models that taxed small-cells with onerous implementation complexities. At the time the mobile industry had the lofty ambition for average small-cell deployment costs in the order of USD 5000. This is in stark contrast to small-cell costs today, which commonly range between USD 40-200,000 in mature markets like the United States, and with ground leases and back-haul costs that commonly rival those paid for macro-cellular sites. In addition to the cost, small-cell deployments are complex and have protracted time-lines, commonly requiring 15-18 months for zoning approval. The prohibitive costs and protracted implementation time-lines for small-cells must be addressed before meaningful market scale can be achieved.
DAS solutions are expensive and are generally implemented in large venues, such as sports stadiums, airports, train stations and campuses. Commonly DAS implementations are confronted with conflicting commercial objectives. Traditionally venue owners have favored neutral host DAS solutions to support multiple mobile operators, but are generally reticent to pay for cost of the DAS equipment. Mobile operators prefer opportunities to be the sole provider, rather than participating in neutral hosts, and are careful to prioritize their capital resources towards venues that are of strategic interest and provide adequate returns. Since mobile coverage is important, a growing number of venue owners are offering to pay for the DAS equipment costs and seeking operator support to enable mobile services. While operators are capitalizing on some of the DAS investments made by venue owners, the venue owner commitment is not always sufficient. Even when the DAS equipment is paid for, operators are still confronted by network planning and radio equipment costs. They are also constrained by operational priorities and the ongoing demands for the DAS solutions they support.
Companies including American Tower, Boingo, Crown Castle, Extenet, Insite Wireless, and Mobilitie, which specialize in real estate and infrastructure management, are capitalizing on the commercial complexities of small-cell and DAS implementations to provide outsourced neutral host solutions. While these players are primarily focused on large indoor venues, Crown Castle has been pursuing an outdoor DAS (O-DAS) strategy, for which it has acquired extensive dark-fiber resources and is deploying neutral host radio nodes in strategic locations. Even though Crown has spent on average in excess of USD 100,000 for each radio node, with the lion’s share of its cost being in fiber backhaul, it is seeing favorable financial yields to drive further investments. While this is good for Crown Castle and illustrates the strategic importance of small-cells, we believe that it is cost prohibitive for mass market small-cell adoption and illustrates the need for implementation and architectural changes to enable lower cost deployments.
As the mobile industry grapples with strategies to improve localized coverage and capacity using small-cells and DAS solutions, there are a variety of activities that aim to positively impact market progress. These include:
While small-cell and DAS adoption will benefit from these market activities, we believe that it will continue to happen at a glacial pace. Without these operational changes, mobile operators will continue to favor macro-cell deployments. In this report, we investigate the changes that are needed, particularly in the areas of network planning and site acquisition, and operational automation to accelerate small-cell and DAS adoption.
While both small-cells and DAS solutions deliver localized capacity and coverage for mobile networks, conventional DAS and small-cell architectures are vastly different, see Exhibit 1. Small-cells are fully contained low power base stations, which are distributed throughout a network coverage area and use traditional microwave, copper and fiber back-haul to connect to small-cell controllers or directly mobile core networks. When deployed, each operator normally has its own small-cell radio equipment, rather than using a neutral host. In contrast, DAS solutions consist of centralized base station equipment, which connects to remote antenna and radio infrastructure that is distributed throughout the coverage area of the DAS. By centralizing the base station equipment, an operator can deploy and connect a conventional macro or small-cell base-station to the DAS infrastructure. DAS is readily implemented with neutral host architectures, since it allows each operator to continue to maintain their own base station equipment.
Exhibit 1: Comparison of DAS neutral host and small-cell solutions to support three mobile operators
Source: Tolaga Research 2016
Mobile operators tend to resist the notion of sharing radio resources, particularly in the case of small-cells. For this reason, each of the three small-cell networks depicted in Exhibit 1 are deployed with parallel equipment, which generally increases the radio infrastructure requirements and deployment logistics for multi-operator implementations. Relative to DAS, each mobile operator has many more radio nodes to manage in small-cell implementations, which drives the need for SON based operational automation.
Technology vendors including Ericsson, Huawei, Nokia, CommScope/Airvana and SpiderCloud have evolved small-cell architectures to support a wide variety of deployment scenarios.
SpiderCloud’s solution incorporates a controller to manage clusters of small-cells deployed throughout its coverage footprint. Each SpiderCloud small-cell is a fully functioning base station, with Ethernet based connectivity to the controller.
Ericsson has its RBS-6402 and RBS-6501 platforms for outdoor and in-building applications, respectively. Ericsson also has its Zero site platform, which has embedded small-cell functionality in energy efficient street lights.
In 2013, Ericsson introduced its DOT platform, sporting an architecture that is well suited to relatively small indoor installations, particularly when nearby macro-cell resources are already available. Rather than requiring high bandwidth and low latency CPRI (Common Public Radio Interface) front-haul connections, the DOT enables a combination of Ethernet and dedicated fiber front-haul cabling, see Exhibit 2. In particular, each radio node (aka DOT) connects over Ethernet cable to indoor radio units (IRU) and each IRU connects over a high bandwidth CPRI front-haul connection to a digital unit, which is essentially a standard macro or small-cell base station. Each IRU converts the signals to an intermediate frequency (IF) (as opposed to RF) that can be transmitted over dedicated Ethernet cables to the Radio DOTs. At the DOTs the IF signals are converted to RF and transmitted through the DOT antennas.
The Ericsson DOT preserves the centralized base station functionality used for DAS, and can connect to existing macro or small-cell radio equipment. For example, it might be connected to a sector of a rooftop macro-cell to provide coverage inside the building below. While the DOT is not well suited for neutral host implementations, and its scope for expansion limited, it is well positioned as a single operator solution for relatively modest installations, or in overlaid configurations as part of larger implementations.
Huawei has a similar small-cell portfolio to that of Ericsson, sporting several conventional small-cell solutions, and its LampSite platform, which enables a distributed architecture that is similar to Ericsson’s DOT solution, albeit with radio units that have greater scalability and output power.
Exhibit 2: Schematic Overview of the Ericsson DOT
Source: Ericsson, 2014
Nokia also has a portfolio of conventional small-cell solutions comparable to those offered by Ericsson and Huawei. In addition, Nokia has its Flexizone small-cell solution, which we believe leads the industry in delivering DAS-like centralization, without the need for expensive CPRI front-haul interfaces. It achieves this by placing the latency sensitive base-band functions of the Physical Layer (Layer 1) and part of the Data Link Layer (Layer 2) in the remote radio units, see Exhibit 3. Other players including Ericsson and Huawei are following similar but different proprietary approaches. We believe that in the future, most small-cell clusters will be deployed using this approach because of the added performance and front-haul efficiencies that it enables. In addition, we believe that it is unlikely that standards will be adopted. Instead, each vendor will maintain its own proprietary front-haul solution; in many respects paralleling the Abis proprietary interfaces that were used for GSM back-haul.
In indoor environments, mobile operators do not necessarily dictate the radio base station equipment vendor that is used for the small-cell implementation. However, in outdoor environments, operators generally insist on overlaid small-cells being provided by the same radio equipment vendor as their macro-cell underlay (e.g. Ericsson, Huawei or Nokia) to ensure feature transparency. As a result, small-cell solutions provided by players who lack macro-cellular equipment, like Commscope/Airvana and SpiderCloud are primarily constrained to opportunities in indoor environments.
While DAS benefits from enabling centralized and dedicated radio base station equipment for each mobile operator in a neutral host configuration, there are several challenges that confront system designers. In particular, the radio signals from the base-stations must be transported over active DAS infrastructure when deployed in large installations. This necessitates dedicated copper or fiber connections as opposed to shared Ethernet to support the low latency and high bandwidth needed to ensure the integrity of the radio signals is maintained. In most cases, CPRI or proprietary adaptations to CPRI are used.
In addition, neutral host architectures can create conflicts of interest amongst competing mobile operators. To avoid these conflicts, infrastructure management companies like American Tower, Boingo, Crown Castle, Extenet, Insite Wireless, and Mobilitie provide independent neutral host solutions. While these players typically focus on installations in large venues, we expect that there will be growing opportunities for these players and others in smaller venues, campuses and mixed use development environments. These opportunities will be fueled by a variety of factors including the increased need for network densification, increased market competition, and the growing use of unlicensed spectrum technologies for local mobile services.
Exhibit 3: An Illustration of the Nokia Flexi Small-Cell Platform
Source: Tolaga Research 2016
In recent years, network equipment vendors like Commscope, Corning/MobileAccess, JMA, Solid, and new entrant players like Dali Wireless have been advancing their DAS solutions. These advancements have been primarily focused towards reducing the cost and complexity of front-haul architectures and improving the efficiencies of remote radio resources. Commscope has acquired a variety of radio frequency cabling, component and antenna companies to become a dominant player for ancillary radio equipment. Commscope expanded its DAS infrastructure portfolio with the acquisition of TE Connectivity in January 2015. The TE Connectivity solution supports relatively traditional active DAS architectures and uses a proprietary front-haul connectivity protocol so that it requires less bandwidth relative to conventional CPRI. Dali Wireless is a start up company that has introduced a proprietary radio routing solution, which uses digitalized routing techniques for dynamically managing traffic demands amongst distributed radio resources. Its solution is targeted primarily towards DAS installations with ultra-high capacity demands.
Since the deployment scenarios for DAS are diverse, there will be a continued need for a variety of DAS technology architectures for the foreseeable future. In addition, while there are strong operational drivers that favor DAS architectures, the impact of these drivers will be diluted in the future as small-cell architectures evolve and mobile service providers increasingly embrace operational automation. As this occurs, we believe that it will become increasingly difficult to distinguish between DAS and small-cells, and that the industry will require new taxonomies that distinguish between use-cases rather than technologies.
The most common justification for the lack-luster market adoption of small-cells, and to some extent DAS, is the challenges in site acquisition and in provisioning back-haul/font-haul transmission resources. While these two areas are challenging for small-cell implementations, we believe that until the mobile industry transitions from deployment and operational strategies designed for macro-cells, small-cell and DAS adoption will continue to languish in spite of efforts to resolve site acquisition and back-haul challenges.
The general deployment and operational activities for radio network equipment are summarized in Exhibit 4. These functions are well defined for macro-cell deployments, and are generally adopted for small-cells and DAS, largely because they align with the operational work-flows, organization structures and incentive plans that mobile operators have in place.
Exhibit 4: General Deployment and Operational Activities for Radio Network Equipment
Source: Tolaga Research 2016
A service provider’s network planning and site acquisition activities are closely aligned, as is illustrated by the process flow in Exhibit 5. Sophisticated network planning tools are provided by specialist companies like Celplan, EDX Wireless, Forsk, Infovista, Radplan and Siradel. While these tools were originally developed primarily for macro-cell network designs, features have been added to the platforms to enable modeling for small-cell, DAS, Wi-Fi offload and heterogeneous network architectures. However, we believe that there are a variety of fundamental factors that hinder network designers from capitalizing on these features. Notable examples include the following:
Exhibit 5: Network Planning and Site Acquisition Operational Work-flow
Source: Tolaga Research 2016
Rather than maintaining highly centralized and controlled network planning and site acquisition activities, we believe that mobile operators must evolve towards decentralized planning strategies, akin to those adopted for femto-cell deployments. With current planning processes, many venues, office buildings and apartment blocks lack coverage even when the radio infrastructure costs are covered. Mobile operators have limited resources and therefore must prioritize their efforts, often to the detriment of viable small-cell and DAS deployment opportunities. With a decentralized approach, mobile operators could allow certified third parties or enterprise IT employees to install the radio equipment. Self optimizing network (SON) provisioning and configuration management techniques could be used to configure the equipment and to update inventory databases, such as those used for network planning tools. Performance measurement data could also be used to verify and certify installations, and quarantine mechanisms instituted to ensure poor installations do not adversely impacted new deployments.
Acquiring small-cell sites in outdoor environments and public areas has proven challenging and costly for mobile operators. Commonly the most suitable sites, (such as street poles and traffic lights) are managed by municipalities, who are notoriously slow in availing site resources and often hindered by protracted approval processes. These processes can be further complicated by regulatory approvals, such as rights-of-way for fiber back-haul. Given these complexities, and the centralized approach that mobile operators are taking to small-cell planning and site acquisition, only the most strategic sites are acquired. While regulators such as the FCC in the United States aim to introduce regulations to ease site acquisition challenges, we do not believe these efforts will be sufficient to drive mass market small-cell adoption.
Currently there is no silver bullet to address the challenges in acquiring sites for outdoor small-cells, particularly with current network planning techniques. However, we believe that efforts to address these challenges are more likely to succeed with decentralized network planning. For example, with decentralized planning, operators could pursue strategies to crowd-source sites from urban retailers and small businesses. In many cases, small businesses are located in urban canyons where small-cell capacity is needed. For this approach to be effective, the small-cells would need to be designed for plug and play deployment, possibly even including steerable antenna equipment.
Depending on the implementation, small-cells might use one of a variety of backhaul techniques, including point-to-point, point-to-multi-point or mesh wireless or basic broadband access.
It is likely that with the right operational models, mobile operators will also find compelling and scalable opportunities with companies that provide urban services, such as billboard advertising and garbage collection and possibly transportation services.
If small-cell sites can be crowd-sourced in sufficiently large numbers, mobile operators might be able to introduce fail-over techniques and only partially provision the small-cell sites depending on traffic demands and the relative performance of the individual sites.
Architectural engineering, civil works and EF&I (engineering, furnish and install) activities represent a significant proportion of the overall cost for base station deployments. Small-cell equipment providers have made tremendous progress in eliminating EF&I costs by simplifying small-cell form-factors to essentially reflect that of Wi-Fi access points. This is particularly the case when small-cells are deployed on standardized fixtures, such as street poles, bus shelters and traffic lights. For example, is Ericsson’s Zero-Site, which is integrated directly into energy efficient street lights. In addition to units with standardized form-factors, we believe that there will be a growing need for modular architectures so that small-cells can be embedded in other items at the time of manufacture. Furthermore, with network densification, smaller base station form-factors will be needed. A notable example, is a prototype small-cell base station that Qualcomm integrated in a USB module.
The engineering, civil works and EF&I costs and complexities for DAS can be significant, particularly for deployments in large venues. In some cases, the DAS infrastructure is deployed with neutral host architectures to defray costs amongst multiple mobile operators and to eliminate the need for parallel radio infrastructure. DAS architectures can vary greatly amongst implementations and can include both passive and active RF signal distribution technology, and in an increasing number of cases are complemented with overlaid small-cell equipment. Exhibit 1a illustrates a traditional DAS implementation that hosts three mobile operators with active radio distribution that leverages fiber or copper twisted pair (front-haul) technology. Companies like CommScope, Corning/MobileAccess, JMA, and Solid provide front-haul solutions. Depending on the size of the installation, the front-haul implementation of a DAS can cost between several hundred thousand and several million US Dollars.
While dedicated front-haul cabling is required for CPRI or CPRI-like interfaces, dedicated cabling is also commonplace for Ethernet based DAS systems. In some cases this is a consequence of the positioning of the remote antennas, but more commonly enterprises have a policy to separate telecom services from their own IT infrastructure. However we anticipate that if enterprise IT departments are given greater autonomy in the design and implementation of the small-cell and DAS infrastructure, they are more likely to leverage existing IT cabling for front-haul connectivity in cases where Ethernet can be used.
Today it is usual for small-cell configuration and optimization parameters to be calibrated using SON automation tools. In most cases this is delivered using Distributed SON (D-SON) solutions, provided by the equipment vendors. However, to enable the decentralized network planning and site acquisition processes that are proposed in this report, we believe that it will be necessary to implement Centralized SON (C-SON) solutions, and tight integration between inventory management, planning and optimization functions. C-SON provides the necessary functionality to ensure that ad hoc small-cell and DAS deployments don’t negatively impact overall network performance.
Backhaul/front-haul and core network integration has and continues to be a major challenge for small-cell and DAS implementations. This is particularly the case for outdoor DAS (o-DAS) where fiber front-haul is required. While technically fiber is an ideal transmission solution, it is not viable for most small-cell/o-DAS deployments. This is clearly illustrated by the average cost of Crown Castle’s o-DAS deployment, which typically exceeds USD100,000 per radio node. While CPRI and CPRI-like implementations benefit operators by supporting centralized base station equipment, we believe it will be superseded with capabilities being developed by Ericsson, Huawei and Nokia to distribute the base band functionality between central controllers and remote radio heads. With this approach, front-haul connectivity can be deployed over Ethernet connections with standard microwave radio transmission. While this will result in proprietary front-haul implementations, it will dramatically reduce the transmission demands required for small-cell and DAS systems.
In addition to reducing front-haul bandwidth and latency demands, we believe that it will be necessary for operators to leverage a wider range of transmission solutions to enable the adhoc site acquisition strategies discussed in this report. Notable examples include, the use of local fixed broadband access networks, point-to-point and multi-point microwave, mesh networking and millimeter wave technologies. To avoid excessive small-cell and DAS infrastructure SKUs, we anticipated continued efforts to enable modular architectures, to ease the deployment challenges when varied transmission solutions are needed.
Even though small-cells and DAS have been fueled by tremendous hype and expectation, they have only seen modest adoption. Industry pundits commonly blame the lack-luster performance of small-cells and DAS on back-haul and site acquisition challenges. However, we believe that the cause is more systemic, and attributable to processes and procedures of mobile operators, which continue to be essentially designed for macro-cell networks. Until operators are successful in transforming their processes and procedures, we believe that small-cells and DAS will continue to languish. In particular, we believe that it is important that operators modify their network planning and optimization activities from current approaches which are highly centralized, to those that allow planning to become increasingly decentralized and adhoc. We believe that by changing network planning in this regard, venue owners, enterprises and business owners will become empowered and vested in the successful deployment of small-cells and DAS equipment. This change is not trivial and requires increased operational automation with techniques like C-SON to ensure that overall network performance is maintained. It also requires standardized and modular small-cell and DAS infrastructure form-factors and technology changes to enable greater diversity in terms of the back-haul and front-haul transmission solutions that can be used.
While the operational changes proposed in this report are challenging, we believe that they are necessary, particularly as market demands drive the need for network densification with mass market deployments of small-cell and DAS infrastructure.