March 12, 2015 — Just last year AT&T was planning to roll out 40,000 new small cells by the end of this year. Last week they said “Nah.” So we have to ask… “Say what?”
This is an interesting development and, I have my perspective on why this went the way it did. Here is what I believe has to do with the decision by them.
AT&T said the integration of the Leap Wireless network provided extra capacity over the existing AT&T network and thus the need for additional capacity was diminished. Double your spectrum, double your capacity (or more, if you can aggregate adjacent spectrum). This actually makes sense.
Eventually the only part of the Leap’s network left standing will be the LTE data network (Leap was CDMA and AT&T’s customer base is GSM). But it will take some time to sunset all of the other Leap customers. You can’t just send everyone a new free phone and tell them to turn off the old phone. However, as they sunset CDMA, additional spectrum will result in even better efficiency. This makes sense too.
Small cells will be a necessary part of ANY carrier’s network. There is simply no way to cover the nooks and crannies of all environments with enough RF energy to allow a mobile device to work. This because carriers are using maco sites – or even small-ish (on buildings, for example – lower radiation centers then a traditional site) sites.
And that stays true, even in the vein of spectral efficiency – putting the smallest site with the best backhaul as close to the subscriber as possible. Translated, even if, or when you could cover mass areas with macro sites, you still don’t have the capacity. Small cells must play a role in a carrier’s network. No other way. But, when?
This is a bit of a setback for a lot of small companies in the industry and could be a major setback for some. However, if you’ve been in wireless long enough to have had a shot at this work, you know that sometimes it goes sideways. But don’t fret. Usually it is only a small window until the segment regains momentum. After all, the demand isn’t going down – regroup, reorganize, and get ready. It is just a matter of time.
I also believe that, from discussions I’ve had with people doing projects in this game, it may be that AT&T was just leading the way for the other larger carriers; we simply don’t know how to digest all of the work and sites that we need to deploy, and we’re just going to sit out the rush for a little while and figure out the technologies and details.
Furthermore, as the technology changes, and fewer and fewer 2G and 3G devices will be out there, the cost and complexity of deploying multiple technologies goes away. From that line of thinking, if you think VoLTE is around the corner, you would clearly wait to deploy.
And what if those crazy Google people really can make Wi-Fi calls seamlessly hand off between dirt cheep Wi-Fi access points and LTE networks? That would surely be a case where you might want to wait to deploy small sites until you can use a single technology.
Add to that the really inexpensive commercial, off the shelf, Wi-Fi. It is really not that far away – two years? It would require a handset refresh. More consideration for moderation.
I’ve continued to see nothing but panic in the eyes of other small cell service providers. Usually in the industry we see the same look on all the carrier’s favorite contractors. This is the first time in a long time that we’ve seen different expressions.
But there is good news. We are seeing the next generation of small cell hardware rolling out from the likes of Alcatel-Lucent, Ericcson and others. It is a very strong industry. We’ve had some bumps, and we’ll have more. However, there is absolutely no way the need for this technology is going away. It is just a question of how many iterations, when and where. Don’t let the AT&T decision scare you.
Richard P. Biby P.E. is the publisher of AGL Magazine and Small Cell Magazine and the founder of the AGL Media Group.