Carrier spending on deployments of small cells, centralized RAN (C-RAN), distributed antenna systems (DAS), and WiFi is expected to hit $15 billion by the end of this year, a new forecast from SNS Research indicates.
According to SNS, the expenditures will be driven by demand for improved in-building wireless coverage as well as the need to meet a massive ramp in mobile data traffic. Additionally, densification with small cells will precede the roll out of 5G networks using millimeter wave spectrum with decreased propagation characteristics. Advancements including small cell virtualization, neutral hosting, and utilization of shared and unlicensed spectrum are expected to propel the heterogeneous network market to a compound annual growth rate of more than 18 percent from 2017 through 2020.
Back in March, IHS Markit reported small cell shipments were already up 43 percent in 2016.
Wells Fargo Senior Analyst Jennifer Fritzsche recently noted one of the firm’s wireless experts estimated small cells will need to be installed every 200 meters. MoffettNathanson in its own research added “small cells can be expected to become increasingly attractive as an alternative to acquiring spectrum as time goes on. All else being equal, network densification should therefore command a higher and higher portion of a carrier’s capital budget.”
Fritzsche separately reported tower company Crown Castle estimates there are 200,000 small cells in the market today, and the company believes that figure could grow to the four million to five million range. Crown Castle already has 25,000 additional small cells in its pipeline, Fritzsche noted, and U.S. wireless carriers are outlining their small cell plans. T-Mobile CTO Neville Ray, for example, said during a recent earnings call the Un-carrier already has around 15,000 small cells built, with contracts to build 25,000 small cells in its pipeline.
In separate reports, SNS estimated spending on virtualized small cells will surpass $1 billion per year by 2020, while virtualized RAN infrastructure and software spending will total $2.6 billion annually by 2020. The advent of standardized 5G NR infrastructure will trigger even more spending, with SNS pegging that opportunity at $21 billion by the end of 2025.
Filed Under: Infrastructure