Small cells are the future of mobile data. At least, that’s what mobile operators say they believe; roughly 98 percent of mobile operators said small cells are essential to the future of their business, according to an Informa (News - Alert) poll.
There’s good reason for valuing small cells, which are micro access points that are easy and cheap to install, and typically serve between four and 32 concurrent connections per installation. The value proposition of small cells includes both cost reductions and increased revenue, according to a recent Alcatel-Lucent (News - Alert) (ALU) webinar, Are you getting Small Cells fast enough?
On the revenue side, according to a recent ALU whitepaper, Turning Small Cells into Big Profits, small cells deliver higher user satisfaction through better connection availability. This cuts down on churn and therein leads to higher revenue retention. It also enables new service bundling options and the opportunity to migrate users to higher data and voice tiers if the operator chooses to make the added access from small cells and metro cells a value-added service. And, as an insightful podcast, Are you getting to smalls cells fast enough?, it brings more accurate location services and better presence-based services.
On the cost reduction side, it is a cost-effective way to increase network capacity, reduces operations costs, and lowers backhaul costs through the ability to offload traffic from macro-networks.
Perhaps the customer service gains are the most important reason why small cells are increasingly a weapon of choice for operators. Aside from price, poor network coverage is the biggest reason for churn, according to Alcatel-Lucent. In fact, roughly 56 percent of users surveyed by ALU reported that poor coverage was their reason dissatisfaction with their current mobile network. Further, 60 percent of businesses surveyed said they’d be very likely to switch to a service provider that offered better quality of service.
Operators are already engaged with small cells and testing various models for the technology’s use. Spring has more than 1 million small cells currently deployed, and AT&T (News - Alert) is estimated to be using about a million small cell installations. Alcatel-Lucent reports that it is involved with 60 commercial deployments and 20 ongoing trials.
Vodafone (News - Alert), which has been experimenting actively with small cells, found that in Greece its use of small cells reduced churn from 68 percent to a mere 8 percent, and 96 percent of its customers in Ireland who used its small cells value-added service said they would recommend it to a friend.
For Vodafone, after a soft-launch it now offers small cell access through its Sure Signal plan, which gives users “anywhere” cell reception via small cell installations in exchange for the right to serve users ads. It also sells in-home small cells that its customers can use to ensure that they have good mobile connectivity in the home or their office.
This is just one way that small cells are being used by operators. No matter how the technology is offered, however, one thing is clear: small cells are changing the way mobile network access is delivered.
Edited by Peter Bernstein