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November 10, 2015

Dear Lens Subscribers,
Traditional solutions for improving indoor coverage have included femtocells and indoor DAS. But solutions based on indoor small cells are also starting to become more viable, with the emergence of robust LTE products over the past couple of years. Yet, this market hasn't really scaled yet. In my view, it's a business model/asset ownership issue. I believe the indoor small cell market will only achieve significant growth if a multi-operator, or neutral host type solution emerges. See the full column below

Also, there has been increased attention to 'Wi-Fi First' type services with Comcast's recent announcement that it is going to test a service in the coming months. In my view, there are in my view, there are two major usability issues that need to be addressed before Wi-First services are ready for the mass market. First, cellular and Wi-Fi networks need to 'get along' better. Second, these services need to be available on the majority of popular devices that users own, not a select number of customized devices, which is the case today. Read the full column, published in Tech.pinions and Re/Code.   
In This LENS
Indoor Small Cells: New Business Model Needed
Cellular and Wi-Fi Must Get Along Better
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Indoor Small Cells: New Business Model Needed
Continued growth in smartphone data usage from indoor locations is putting pressure on operators and building/venue owners to improve coverage and capacity indoors. Traditional solutions for improving indoor coverage have included femtocells and indoor DAS.
Solutions based on indoor small cells are also starting to become more viable. There has been quite a bit of action in the space lately: Ericsson reports its DOT product has been deployed in 40+ countries and 30+ operators, and has a partnership with HP. Airvana has introduced a new 4G only product, the OneCell, and was recently acquired by Commscope. And SpiderCloud has some of the larger operator contracts and has signed a reseller agreement with Cisco.
Yet, the indoor small cell market is still modestly sized, at under $250 million in revenues to the vendors (U.S. market). Why has it not scaled significantly?
  • We are still in the early days of LTE small cell products, and they remain relatively expensive (particularly since they support only one frequency),
  • Operators still tend to be reactive, rather than proactive, with regard to implementing small cells at a building or venue.
  • Enterprises/building owners are still hesitant to share in the cost, especially since small cells implementations are operator-specific.
  • Wi-Fi provides a good alternative for mobile data, and is even becoming more viable for voice coverage as more operators support voice over Wi-Fi.
  • Even though indoor solutions have improved, there is still some tricky engineering required to prevent or manage interference.
We believe the indoor small cell market will only achieve significant growth if a multi-operator, or neutral host type solution emerges. The small cell vendors talk about providing a neutral host solution, but at this stage of development, only the physical cabling (Ethernet) is being shared and each wireless carrier has its own small cell and associated controller. Additionally operators are not, at this point, prepared to give up control of equipment and resources. And building and venue owners are not generally prepared to share in the cost in a BYOD world where users switch operators with such greater frequency.
A neutral host model could become a viable solution for small cells, in certain situations:
  • Larger venues or campuses where there is a strong 'mobile first' requirement and perhaps combining indoor and outdoor components. Universities, schools, and hospitals are among the verticals which could lead in this area;
  • A business framework where the venue owner pays some of the cost or provides some infrastructure, perhaps combining small cell with Wi-Fi; and/or
  • Provision of proportionate benefits to participating operators, at lower cost than if they were to go it alone
We believe that an alternative framework for indoor small cells, be it neutral host, multi-operator, or operator agnostic solution, is an inevitability. However, it will take at least 2-3 years for this to develop. This is not really a 'technical challenge', in the sense that some small cell solutions could host an additional operator
today, with relatively modest tweaking. It is more of a business case, 'who owns the assets', and logistical challenge.
We also believe that relationships with third parties, such as systems integrators, VARs, need to be developed. Some of the incumbent DAS/small cell vendors could play an important role role in providing network management, backhaul, and power in a hosted small cell solution. And operators would have to get more comfortable with the concept, such as allowing OA&M to be hosted by a third party.

The major Ericsson-Cisco partnership announcement yesterday could be a powerful catalyst in this area. We are excited to learn more in the coming days.
If there was development in some of these areas, enterprises and venue owners might also be more prepared to put some skin in the game.

Cellular and Wi-Fi Need to Get Along Better
This is the Xfinity Wi-Fi map for downtown Boston.  Source: Comcast
There has been a lot of activity along the 'Wi-Fi First' front of late. My view is that cellular and Wi-Fi need to 'get along better' if these services are going to take off. Read the full column, which was published in Tech.pinions and picked up in Re/Code
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