No mobile operator has unlimited capital, time or resources. So, why should an operator prefer a scalable small cell system to provide 3G/LTE service in medium to large enterprises, rather than just offer femtocells to hundreds of thousands of small enterprises? Wouldn’t covering small enterprises have a bigger impact on subscribers and networks? We think not… here’s why.
1. The impact of enterprise small cells is not proportional to the number of enterprises (believe it or not!), but to the amount of floor-space they cover, because floor-space is proportional to subscribers. As data from the US Department of Energy shows, commercial buildings larger than 50,000 sq. ft., though they are just 5% of all commercial buildings, have more than 50% of commercial floor space (shall we call it the 5/50 rule?). Other studies show similar ratios in other major cellular markets.
2. If small cells are going to reduce macro cap-ex and improve customer experience, they must deliver capacity where it is needed – in places where thousands of smartphone-toting subscribers congregate. Consider the following… Let’s say a US operator decided to purchase 100,000 small cells and installed these at 100,000 small enterprises spread over the United States, will it be able to reduce its macro network investment? Will millions of subscribers see a marked difference in network quality? We think this is unlikely, as it does not target the medium-large buildings where the most important enterprises reside. Now, let’s say the same operator used 100,000 small cells to deliver capacity in 2,000 of its busiest buildings in New York, Washington DC, Los Angeles and San Francisco. By doing so, the operator would be adding capacity where it is needed most, in markets packed with high-ARPU subscribers, and where adding new cell sites is extremely expensive.
Perhaps, we are not saying anything that mobile operators do not already know. Every year, operators spend billions of dollars providing coverage inside large buildings using distributed antenna systems and dedicated macro cells. All that we are saying is that operators can leverage the lower price point of scalable small cells to open up a much larger building market that was previously unavailable. Conservatively, operators can triple the number of buildings covered, provide ten times the capacity, and do it all in less time and for less money than they did in the past!
– Amit Jain, Vice President of Marketing & Product Management