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Small cells, small thinking?


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Ken Wieland

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NEW BLOG: Many mobile operators are just not “getting it” when it comes to small cells. At least that’s the view of Simon Brown (pictured, below), CEO of small cell evangelist ip.access. He reckons operators need to “wake up” to the business case opportunity.

Speaking last week to a small group of journalists in London, Brown argued that operators tend to be too hung up on coverage and capacity. They wrap a complex set of engineering processes around small cell provisioning in much the same way as if they were rolling out a regular macro network. That unnecessarily drives up cost and lengthens deployment times.

simon brownMeanwhile, not enough attention is being paid to services that can drive incremental revenue. Operators, he argued, are not striking the right balance between technical and commercial considerations.

Brown acknowledged that some “leading operators” have seen the light – by focusing on service provisioning – but all too many are floundering in the darkness. Blinded by geographical and network engineering issues, they can’t see the commercial opportunities. Until they do, suggested Brown, growth in the small cell market will likely be hampered.

If Brown is right, unenlightened operators are missing out because of poor management and organisational structures ill-equipped to tap into new markets.

Rather than RAN boffins dominating discussions about small cell deployment, the ip.access boss wants more input from marketing and business-minded people. If operators listen solely to engineers, he said, they will miss out on commercial opportunities. They won’t be following the money.

“There’s a whole bunch of guys out there who are looking the wrong way,” said Brown. And that, he argued, is a management failing.

Of course, Brown has a vested interest. A small cell supplier, naturally, will want operators to buy more small cells. But leaving that aside, do mobile operators really deserve Brown’s kick up the backside?

Part of the ip.access argument seems to be that small cell engineering problems have largely been resolved, presumably leaving more scope to concentrate on services.

Network interference? Brown reckoned operators shouldn’t lose any sleep over it. Maybe he’s right. After all, ip.access is an experienced player in the market. It has been supplying small cells for more than ten years and has around 100 customers. That said, I’ve heard other vendors (perhaps with their own vested interests) say network interference is still a technical challenge. The argument here doesn’t seem to be settled.

There are also significant costs to bear, even if the small cell provisioning process can be made sleeker and more cost efficient. Think of micro-site acquisition and backhaul. Both are a strain on the small cell business case.

Brown argued, however, that a more targeted approach – identifying groups of people in the enterprise, perhaps, with vertical applications – would enable operators to see a business case more clearly for small cell rollout. And even if initial small cell deployment was driven by coverage and capacity reasons, said Brown, the subsequent building of various service offerings targeted at different subscriber groups would be at a much lower incremental cost since the infrastructure would be already there. ip.access calls it “business-case chaining”.

But what are these services that will generate incremental revenue? Among the things ip.access talks about are mobile operators extracting more value out of the RAN by using data analytics to understand better customer movement and behaviour. That information could then be combined with more accurate location data – courtesy of the small cell – for marketing and commerce. It could be that mobile operators don’t even sell services directly to customers but rather sell all this data – presumably with customers’ permission – to third-party data crunchers wanting to develop commercial services of their own.

It looks a promising area, but I wonder how important the small cell is to make these types of service happen. Unfortunately, the few mobile operators that do “get it”, according to Brown, are coy about revealing their identity. No case study presentations. Perhaps that’s understandable if they want to guard what they believe is a competitive edge, but a shame nonetheless. It would be good to get their views, as well as those that apparently don’t get it on small cells.

Maybe MWC 2014 will provide more operator insight.

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

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  • Commodore

    simon’s correct. But no one should be surprised if large carriers strategic thinking about small cells or any other innovation from outside of their engineering conventional wisdom is approached with a defensive viewpoint/bias.