All the large equipment vendors are chasing the next big wave in infrastructure investments: 3G and 4G/LTE outdoor small cell deployments. Small cells are small cell towers that can be placed on walls, on top of light poles, bill boards, and many other sites. As we continue to generate more data traffic with our smartphones and as we expect better and better mobile service demanding access to high-speed connectivity anywhere at any time, mobile network operators’ macro cellular networks (e.g. large cell towers) get congested and cause both capacity as well as coverage gaps, which will negatively impact customer experience while accessing the internet on their network. In a saturated market it is more important, and cheaper, for mobile network operators to retain their customers than acquiring new ones.
The small cell market is going to be a high growth market throughout 2016. Forecasts published by Alcatel-Lucent (NYSE: ALU), who is recognized as the leader in this technology, point towards the following estimated spending on small cells by service providers worldwide:
2013: $0.5 billion / 750,000 units
2014: $1.0 billion / 1.25 million units
2015: $1.6 billion / 2.0 million units
2016: $2.0 billion / 2.5 million units