Wireless Data Costs for Small Cells With Embedded Wi-Fi Can Shrink to One Third of the Costs for Macro Cells
A new report from Senza Fili shows that combining cellular and Wi-Fi greatly improves the business case for LTE small cells, and even more for 3G small cells.
Seatte, WA (PRWEB) November 05, 2012
Small cells and Wi-Fi are the most powerful tools that mobile operators have to increase data capacity in their networks. These technologies enable them to meet the demand from a growing number of subscribers who have enthusiastically embraced smartphones, tablets and other data devices, and who generate rapidly increasing traffic loads, due largely to video content. A new report from Senza Fili demonstrates that mobile operators that deploy small cells and Wi-Fi concurrently can cut their wireless data per-bit costs up to two-thirds, compared with macro-cell costs.
Most mobile operators don’t get to choose whether to use small cells or Wi-Fi. To meet their capacity density targets in the high-traffic locations where subscribers gather, operators need to deploy both small cells and Wi-Fi, side by side. And subscribers demand both: Wi-Fi for fast and inexpensive wireless access, and cellular for mobility and coverage. Senza Fili’s latest report, “The economics of small cells and Wi-Fi offload,” explores the business model for the coexistence of small cells and Wi-Fi within the same network and identifies strategies that enable mobile operators to optimize the utilization of network and spectrum resources and to minimize per-bit costs.
Operators not only stand to benefit from using both Wi-Fi and small cells to boost capacity, they also can reap additional gains by deploying both in the same small-cell enclosure, increasing the capacity of each small cell and integrating Wi-Fi traffic more tightly within the cellular network.
“By deploying LTE, 3G and Wi-Fi jointly as part of an integrated sublayer of small cells, operators can meet their capacity targets faster, leverage their existing Wi-Fi footprint, and significantly reduce their per-bit costs,” says Monica Paolini, the report’s author. “The business case for small cells can be challenging, especially for 3G. Adding Wi-Fi to small cells strengthens the business case.”
Findings from the total-cost-of-ownership (TCO) model presented in the report include:
TCO for small cells and Wi-Fi ranges from 10% to 25% of the TCO for a macro cell, depending on the configuration of the small cell.
Because opex plays a much larger role than capex in the small-cell business case, configurations that reduce opex – such as multi-sector and multi-interface small cells – lead to a more robust business case.
The low marginal cost makes adding Wi-Fi, 3G or additional sectors to an LTE small cell an attractive proposition that reduces the number of sites a network operator must manage and increases capacity more rapidly.
Even at low densities, LTE small cells and Wi-Fi quickly take on a dominant role, relative to macro cells, in transporting mobile traffic.
Small cells and Wi-Fi enable operators to slash per-bit TCO by at least half. By combining cellular and Wi-Fi, operators can cut the per-bit TCO to a third of the TCO of macro cells.