There’s a wide variety of potential sites and different owners to manage. It’s not just lamp posts, but CCTV poles, bus shelters, advertising billboards and retail signs, as well as the sides and rooftops of buildings.
Site approvals can be slow and involve many parties, including site owners, tenants, local municipalities, mobile network operators, equipment vendors, installers and various sub-contractors. The processes, skills and partnerships required are very different from those for larger cell towers.
Initial deployments have seen mobile network operators rolling out their own independent small cell networks rather than sharing with other operators, which increases costs considerably.
Market pressure is building to address these issues so that small cells can deliver the extra capacity that is required in busy metropolitan districts.
Over recent years, we’ve seen several companies offering ‘Small Cells as a Service’. Fixed and cable network operators with extensive fibre assets, field staff and business customers have promoted the concept of outsourcing.
For example, Virgin Media UK has for some time offered to provide wireless and wireline backhaul for large-scale small cell deployment. It will install equipment on request, enabling the mobile operator to remotely configure and manage it.
A neutral host goes one step further. Acting as a third party, it arbitrates between the mobile operators, metropolitan districts and site owners. Each mobile operator only has to deal directly with a handful of neutral host companies, simplifying the operational and commercial arrangements. The neutral host would interact with a large number of site owners as well as the local planning authorities.
A neutral host can combine backhaul networks shared by multiple network operators. Small cells from different host operators could be deployed alternately along a series of lamp posts, sharing the same high-capacity wireless backhaul grid. Dual-band small cells can support two separate networks in their own frequencies, reducing the number of units that is required.
Although not essential, it’s likely that the neutral host would take an active role in the deployment and ongoing management process, sub-contracting installation to engineering companies already familiar with street deployments of CCTV or telecom equipment. Local municipalities typically have pre-approved contractors for such work, and cross-training staff should be fairly straightforward.
Neutral hosts may also directly manage the backhaul traffic, routing this through their own small cell gateways and distributing an aggregated feed to each mobile operator.
It is likely that operators would want to retain direct control of RF parameters within each small cell, delegating aspects of management of backhaul capacity and QoS to meet pre-agreed service level agreements.
Potential neutral host players
This neutral host business model has already been widely used indoors, for stadiums, shopping malls and apartment buildings, where a common DAS system is deployed. In some scenarios, one network operator takes the lead, installs the entire system and permits other operators to connect their own base stations for a fee.
Alternatively, a third party installs the DAS and offers to connect any operator. There’s no reason why this approach could not also be applied outdoors.
Examples of this business model include Boingo, which offers a mix of DAS, small cells and carrier Wi-Fi within the same site to serve the mix of traffic. Clearsky is another US company with its own multi-tenant, multi-operator small cell gateway.
RAN equipment vendors are also keen to get in on the act. Alcatel-Lucent and Huawei have both assembled a comprehensive database of verified urban small cell sites. Ericsson recently went one step further and announced plans to launch a neutral host service in the US, which will initially be for indoor deployments.
Several of the backhaul service providers are also investing in this potential opportunity. Towerstream has acquired rights to a large number of rooftop sites in major US cities, including Manhattan, for which it also provides backhaul.
Wi-Fi is already demonstrating this model
Some city municipalities have made agreements, giving site access in exchange for a ‘free basic Wi-Fi’ service. Several London boroughs, Manchester and Southampton have assigned rights to Arqiva to install Wi-Fi and small cells in return for up to 30 minutes’ free Wi-Fi use per day.
Virgin Media has installed carrier-grade Wi-Fi in most London Underground stations.
All mobile network operators have wholesale access, with none having cellular service underground. It’s an environment with limited space, restricted access at many times of the day, and wouldn’t be feasible for each operator to deploy equipment independently.
Cable companies have also deployed carrier-grade Wi-Fi extensively in some countries. Examples include Comcast in the US, Ziggo in the Netherlands and Telenet in Belgium. Several of these operate as MVNOs and use Wi-Fi as a cost-saving measure to offload traffic from their MNO partners.
However, service quality is variable and security is a concern. Some of these services are wholesaled to other network providers, but the vast majority serve their own customers.
The benefits to a municipality
Municipalities are keen to enable ubiquitous wireless service to stimulate local business growth and civic digital services. It’s simpler to negotiate with a single entity that can provide comprehensive service for all citizens. They also need to be seen to offer equal access to street furniture to ensure fair competition.
A neutral host can also point to similar arrangements elsewhere to educate what ‘best practice’ procedures can achieve. The industry definitely needs a more standardised process for site acquisition. A ‘cookie-cutter’ approach might be too big an ask in the short term, but it could certainly be a lot smoother.
Adopting the same planning rules for equipment size, form factor and placement helps to reduce complexity and speed up deployment, by cutting down the amount of bureaucracy involved in the process.
Mobile network operators will also contribute towards the cost of site rental, provided this is set at a reasonable commercial level.
Benefits to mobile network operators
While they’re reluctant to lose control, mobile operators would soon see the benefits of outsourcing site acquisition to a third party.
Access to a pre-validated database of available sites streamlines their planning process and speeds up deployment. And cost sharing between multiple operators makes the business case far more attractive.
Some neutral hosts have access to capital funds and can offer services over a longer period. This shifts operator CAPEX to OPEX and also serves to improve their financial performance.
Opportunity for new entrants
A breakthrough in urban small cell deployment could be achieved by adopting a new commercial model.
Municipalities need to open up access to their street furniture on a fair basis to competing operators. Empowering a neutral host would be a very effective way to arbitrate between the stakeholders involved. And it would also enable the industry to scale up more rapidly to ensure success for all parties.
The scope is greater than that offered by today’s cell tower companies or equipment suppliers alone, offering an opportunity for new entrants to compete in this emerging market.