Enterprises are Prime Market for Small Cell Solutions

Mobile service providers for a variety of reasons are looking at small cell solutions to not only meet capacity constraints but also to expand existing markets and create new ones.

This is not just about increasing the reach of macro-cellular networks in a time that has been characterized as a bandwidth crunch, and placing more capacity closer to heavily trafficked areas. In fact, a new report, “Small Cells Create New Opportunities in the Enterprise,” by Alcatel-Lucent’s (News - Alert) Bell Labs researchers, makes a strong case that service providers should target the enterprise market as important areas for revenue growth and increased customer satisfaction as enabled by small cell solution deployments. 

The report surveyed IT executives in Brazil, Singapore, Australia, the United Kingdom, Italy, Spain and Russia about small cells opportunities. Small cells, also known as femtocells, are small cellular base stations deployed in enterprise or home environments to augment cellular reception.

Key research findings in the report included:

• The obvious high interest in small cells to combat service capacity and performance challenges
• Enterprise willingness to pay for small cells as a premium service
• An opportunity with small cells with optional Wi-Fi to provide enhanced functionality through tight integration with enterprise PBX (News - Alert) systems.

The good news for mobile service providers is that in general small cells solutions are an easy sell in the enterprise.  There is awareness of what they are and what they are capable of delivering to enterprises. In fact, the report found that seventy-two percent of enterprises surveyed were aware of small cell technology, and 87 percent reported they would likely switch to providers who could guarantee in-building cellular coverage.

“Organizations experiencing mobile service performance challenges, such as dropped calls, poor voice quality, slow data and e-mail service, and poor in-building voice and data service, showed the highest interest in small cells,” Alcatel-Lucent noted in the report. Device choice and device and service cost were also factors influencing small cells solutions interest among enterprises.

Nearly 40 percent of those surveyed thought that small cells overlay was worth the effort for improved coverage. Slightly more reported they would pay extra to gain better cellular service in the enterprise.

“The sweet spot for incremental pay for premium services was 6 percent to 20 percent,” Alcatel-Lucent reported.

Almost 49 percent preferred to pay a one-time fee for the gains, with 42.1 percent instead preferring a contract extension. Only 9.1 percent reported an interest in paying for small cells solutions with an increase in monthly billing, the least popular payment method.

Integrating small cells with enterprise PBX solutions was the most popular small cell-based service, the report found that roughly 68 percent of those surveyed thought PBX integration would be valuable. Also popular were syncing content on mobile devices as part of in-office collaboration and mobile voice and video conference calling, each garnering favorable responses from around 60 percent of respondents.

Wi-Fi integrated small cells are important for enterprise customers as well. About 87 percent indicated that Wi-Fi integrated small cells were desired, with the same number indicating that it was important for mobile providers to replace existing Wi-Fi access points with the new small cells technology.

Another key research finding was the indifference of enterprise customers when it comes to installation. Although large enterprise customers showed greater interest in turnkey small cells services, overall respondents were split between self-installation and a willingness to purchase turnkey solutions.

Do enterprises want better wireless coverage?

The answer is not only a definitive yes, but a yes with a checklist of desirable attributes, i.e., Wi-Fi and PBX integration along with ease of use and reasonable billing options. At a time when mobile service providers are desperately trying to increase ARPU, decrease churn and develop business models that enable the profitable expansion of their networks to fund network expansion to meet the insatiable appetite for wireless broadband and create sustainable value, small cells aimed at enterprises will be key. This is a win/win since enterprises need to accommodate the bring your own device (BYOD) phenomena, and service providers need to create loyalty and opportunities for value-added services.