For the mobile network operator (MNO), times have changed.
Today, roughly 20 percent of macro cells carry 80 percent of total cellular traffic during peak hours, according to Bell Labs (News - Alert) research presented in a recent TechZine article. As the authors note, behavior has changed so instead of providing a decent quality of voice over a wide area as users were on the move, now users are remaining relatively static during much of their cellular use.
Macro cells were not built for such behavior, which is why MNOs are increasingly turning to small cells technology. Small cells, whether with or without Wi-Fi, such as that offered by Alcatel-Lucent (News - Alert) with its lightRadio Wi-Fi solutions, allow MNOs to cheaply beef up areas that have added traffic.
“Small cells provide extremely focused capacity and coverage, but to ensure adequate service uptake deployment strategies must be appropriately focused,” the article’s authors contend. In fact, they go on to explain that, “Mobile network operators (MNOs) must understand exactly which small cells technologies, as represented by the Alcatel-Lucent 9360, in which locations, offer the highest potential to generate new revenues.”
Where and how many small cells an MNO should employ requires matching capacity with user behavior. This is not just a question of network, it also is a question of market research.
When deploying small cells, MNOs must look beyond the network and total cost of ownership and consider customer lifetime value (CLV), according to Alcatel-Lucent. CLV calculations inform MNOs on how much profit an average customer will generate over the lifetime of their relationship. When combined with market adoption models, CLV assessment becomes the total future lifetime value of this group of subscribers. This information helps MNOs assess the market uptake and future value of new small cells services.
Using CLV analysis, MNOs can gain into their customers’ average usage patterns in conjunction with particular types of locations. Tools such as traffic geo-location also help MNOs find the right geographical position for the placement of small cells or Wi-Fi access points to offload data from congested macro cells.
“This information helps MNOs precisely target their small cells deployments to increase profits and manage TCO,” according to the TechZine article.
When considering small cells deployments, the article also suggests examining how small cells can help differentiate an MNO, what upsell opportunities exist, the market for small office/home office customers and mid-sized businesses to be attracted by better coverage, and the percentage of smartphone customers in the area who sport Wi-Fi Alliance (News - Alert) Hotspot2.0 standard handsets.
“A standard business case is never adequate,” state the authors. In fact, they believe that, “Even MNOs in neighboring countries have very different requirements. Each MNO’s small cells business case must reflect their own environment, including commercial, operational, regulatory, environmental and geographic considerations.”
Small cell deployment is becoming a necessity for cellular off-load and competitive reasons as Wi-Fi proliferation has created a land grab in densely trafficked areas. However, one size does not fit all in this market and that is why careful consideration needs to be given in planning an implementation because mistakes can be time-consuming and costly on several fronts.
Edited by Peter Bernstein