SCF: 68% of small cells will be enterprise by 2026

Enterprise is poised to account for a lion’s share of small cells deployed over the next several years, making up 68% of the total installed base by 2026, according to a Market Status Report by the Small Cell Forum (SCF).

Including outdoor urban and rural environments, SCF expects a total of 38.3 million small cells to be installed by that time. The forecast (which adjusts 2020-2021 for a moderate impact from COVID-19, and lays out best- and worst-case scenarios due to the pandemic) estimates a compound annual growth rate (CAGR) of 13% for deployments and upgrades between 2019 and 2026. 

The Small Cell Forum is a group focused on lowering barriers to large-scale deployments of small cell networks, including commercial and technical initiatives to expand the ecosystem. Its report is primarily based on a survey of 78 mobile operators worldwide and 26 other small cell deployers including private network operators and neutral host providers.

SCF anticipates around 4 million enterprise small cells deployed in 2026 alone (for a total of 26.2 million), compared to about 2.1 million in urban environments that year (total of 11.1 million).  In rural and remote areas, 957,000 radio heads are expected to be installed by the end of the period, with CAGR of 19%.

Until 2021, enterprise environments with highest demand and deployment numbers are expected to include retail, government, and finance. SCF said that will shift to transport and manufacturing as technologies like 5G, edge computing, and AI become more prevalent.

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Notably, it's not all about network operators that are deploying to densify and serve enterprises. Instead SCF found significant diversity, saying new entrants will operate more than 70% of indoor enterprise networks by 2026 and up to 30% of the installed base of outdoor small cell networks.  

“Not all will be new companies – there will be incomers from the cloud, Wi-Fi, tower and enterprise/private network spaces, among others. But there will also be increasing opportunities for innovative new players, such as neutral hosts, private network operators, city or enterprise specialists, who will favor flexible mobile infrastructure with end-to-end security offered by small cells,” the report stated.

It added that some may hold newly owned spectrum, but a bigger portion will tap newly available shared or lightly licensed spectrum.

The group doesn’t think these small cell deployments will be in place of mobile operator’s rollouts, but incremental instead – estimating that 75% of the small cells deployed by non-traditional operators wouldn’t have happened otherwise.

When it comes to success in enterprise, service providers said the top three factors for either accelerating or holding back small cell deployments include lower opex costs than current systems (42%); ability for plug-and-play deployment to reduce cost and risk (36%); and clearer case for return on investment (34%)

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Even though there’s increased room for newer entrants, traditional MNOs will still dominate small cell operations in urban environments. The report shows CAGR of 22% for MNOs city small cell deployment, and still operating 70% of city cells on a standalone basis or though shared deals.

Neutral host operators, however, will deploy urban small cells more and more, accounting for 14% of new rollouts by 2026.

More than half of survey respondents cited access to affordable sites as a key factor for the pace and scale of small cell deployments, with 38% calling out a standard process for site and equipment approvals.

In the U.S., delays for small cell and other 5G infrastructure siting approvals have been an issue. The FCC recently adopted a new 5G infrastructure upgrade order, in the aim of streamlining the process for technology upgrades at existing sites.

Overall, the SCF report noted its best case and worst-case scenarios for the small cell market varied widely because of “considerable uncertainties in the market”  – with a difference of 16 million radio deployments between them.

“Factors which affect this variation include the immaturity of 5G platforms and business models; immaturity in industrial and IoT business models; potential impact of the Covid-19 pandemic and recession; uncertain timescales for operators to adopt key enablers such as AI-enabled automation or cloud-native networks.”

For the COVID-19 impact, SCF anticipates a bounce-back starting in the fourth quarter this year to be offset by uncertainty in the enterprise sector. Short-term disruptions to supply chain, standards and financing dragged down Q2 and Q3 estimates for 2020, but by the end of 2021 it said the forecast is near to pre-pandemic estimates.