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Small Cells and HetNets from Alcatel Lucent, NSN and Ericsson pay off now for 3G Networks
Immediate Operator Value for Throughput wherever 4G/LTE is 2 to 3 years away
Boston, MA - July 29, 2012 - In a new report Strategy Analytics challenges the recent focus on small cells for 4G/LTE. Small cells leverage next generation architecture but bring the biggest immediate financial and performance benefits to 2.5G and 3G networks.
The Strategy Analytics Wireless Operator Strategies (WOS) service report, "Small Cell Economics - Key to 3G Profitability" finds that small cells are a very cost competitive way to upgrade 3G macro cells. Pico or Metro Cells have 25% lower Total Cost of Operations(TCO).
The report:
- Describes alternative ways to increase capacity and coverage
- Reviews Ericsson, Qualcomm, Alcatel Lucent and Nokia Siemens Networks(NSN) estimates of throughput improvements and cost savings
- Creates a new model for the Total Cost of Operations (TCO) of four systems – outdoor Femto cells, Pico/Metro Cells, new 4G and traditional 3G Macro Cells
to address the question "Are Small Cells actually less Costly?"
"In this new analysis small cells cost significantly less than 3G macro cells for the same coverage area but slightly more than new 4G/LTE macro cells” noted Sue Rudd, Director Service Provider Analysis. “This is largely due to the ‘consumer electronics-like' vulnerability of very large numbers of small cell sites that require installation and ongoing maintenance."
"Cost is not the only reason to choose small cells since they offer faster installation for rapid upgrades in throughput” added Phil Kendall, Director Wireless Operator Strategies "Estimates vary but small cells will probably increase throughput by over 200% as a 'HetNet underlay' in legacy 3G 'hot zones' or at the edge of macro cells where data throughput is poor. Throughput improvements could reduce Cost per Mbps by 30%".
Small cells will enhance both operator performance and profitability if deployed appropriately and the report identifies seven ‘use cases’ for small cell deployment. The market opportunity for these will be estimated in a forthcoming outlook and forecast..
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