What Capacity Problem?! A View on the Small Cell Market.

By | July 22, 2016

small cellsSmall cells have existed and been talked about for about a decade now. The technology and market went through different phases tracking 3G, LTE and now 5G technologies. Yet, the deployment of small cells has been timid and numbers fall below expectations. The fundamental thesis behind small cells is that demand for capacity exceeds supply. The market speculated that small cells is the solution to close this gap. But in fact, this thesis has several flaws.

One flaw is that operators are running out of capacity. The answer is at least not yet – not in a manner that necessitate large scale deployments of small cells. The height of the small cell hype cycle coincided with the introduction of LTE in virgin spectrum. Networks were lightly loaded, ample capacity was available and operators would rather migrate users from 3G to LTE and defer small cell deployments. The business case for small cells was not competitive with macrocells and will continue to be so unless there are major changes in the manner small cell sites are acquired and deployed.

The capacity problem exists, but in a pin-point, case-by-case basis which makes addressing it in a broad brush difficult if not futile. The lesson: investments thesis built on generalizations rely on luck more than on execution to succeed.

More on my view on small cells are available in this interview with TIA Now at at this link, or at this link: