Market Watch

Small Cells to Play a Big Part in Network Architecture of the Future

March 25, 2011

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As data traffic on the networks of mobile operators continually grow at exponential rates, driven primarily by rising consumer adoption of video streaming services, mobile operators are carefully looking at their business models and network deployment plans. Around the world, MNOs are trying to create plans that allow them to deploy 3.75G and 4G networks while also profitably monetizing data traffic.

Increasingly, operators are moving to tiered pricing plans based on the amount of bandwidth consumed. IHS believes that this is the first step in the attempts of operators to transition their networks from dumb pipes to metered dumb pipes, and then eventually to smart pipes.

To successfully monetize data traffic, operators will have to migrate their networks to smarter networks that can provide dynamic quality-of-service guarantees, prioritize traffic, offer certain services that can be exempt from data traffic ceilings, and present differentiated pricing plans that allow consumers to choose options tailored to their needs (e.g., consumers could choose to pay price premiums for the option to access video streaming applications, or choose plans that only offer data services and web access.)

To do this, operators will need to evolve their networking architecture into a heterogeneous architecture involving a combination of macro cells, micro cells and small cells, co-existing with femto cells and WLAN mesh networks. Such heterogeneous architectures will have to be optimized with end-to-end solutions, which will allow operators to implement service-level policies on data packets through their networks.

A critical part of this future network architecture will be the implementation of small architecture. Small cells—also referred to as pico cells and metro area cells—will allow operators to deploy 3G/4G network coverage in dense urban areas possessing a high concentration of mobile data users. If properly implemented, small cells can be tuned so that the network capacity is aligned with periods of high use. For example, small cells in urban downtowns can be turned off at night when data consumption by enterprise users in these areas decline.

If operators are able to successfully monetize data and manage the bandwidth crunch, it is clear that networks will have to evolve from the current homogenous architecture into intelligent, managed heterogeneous architectures.

This means tremendous opportunities will be available for infrastructure OEMs, silicon suppliers and software providers to offer differentiated end-to-end solutions, and for operators to take advantage of the explosive growth in data.

Read More > Mobile Infrastructure Market: LTE Poised to Provide the Next Uplift

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