New independent research shows that 60% of enterprises surveyed across the globe expect to have deployed small cell technology by the end of 2017. The research, conducted by enterprise specialists Nemertes on behalf of the Small Cell Forum (SCF), surveyed 500 enterprises across 17 sectors.
In addition, the latest independent market shipment forecast by analysts Mobile Experts shows the number of enterprise small cells shipped is predicted to double during 2016, with a sales growth spike of 270% forecast for this year. Mobile Experts forecast enterprise small cell shipments will rise to be worth $4 billion annually by 2020.
The research was unveiled at Mobile World Congress last week (22-25 February 2016) by the Small Cell Forum with the research pointing to ‘a sharp uptake in enterprise small cell deployments and a growing appetite among businesses to adopt the technology’.
The data highlights from both sets of research released by Small Cell Forum showed:
• Some 60% of companies surveyed expect to deploy small cells by end 2017
• 13.3m small cells now deployed
• More than 3m small cells shipped in 2015 alone
• Non-residential small cells accounted for almost 40% of last quarter shipments
• Small cell revenues topped $1bn for the first time in 2015
• Non-residential small cells represented 65% of revenues
• Enterprise small cell shipments more than doubled in the year with forecast growth of 270% in 2016
• In building coverage – for voice and data – fuels enterprise demand
• 94% of businesses said poor in-building coverage impacted their operations
• Improved security and location services highlighted as small cell opportunity.
The SCF argues that taken together, the research results highlight a major and growing market opportunity for operators to sell business services and solutions based on small cell deployments.
Small Cell Forum chair Alan Law said: “The results are in and the evidence is clear. There is a growing market for operators, a real appetite among businesses, and an opportunity for new services and solutions that can be enabled through small cell deployment.
“It is also clear,” he added, “that as an industry, we have to continue to deliver the innovation to realise the potential of this market. We will need multi-operator small cells, we will need to integrate licence exempt technologies, and we will need to simplify deployment. Small Cell Forum Release Six: Smart Enterprise, published this week in Barcelona, includes significant moves across all those areas,” said Law.
“The enterprise market offers tremendous opportunities for operators,” Law explained. “But it has to be about more than just coverage and capacity if it is to drive significant revenues – it has to be about new services and solutions as well. Small cells are ideally placed to be the key enabler that unlocks that potential.”
Nemertes research in detail
The research found that of the 500 enterprises surveyed, 14% already had deployed small cells, 46% plan to do so this year or next, and 23% are evaluating the technology. Organisations of all sizes are looking at small cells to deliver improved coverage, capacity and service innovation.
“Although many organisations across all sectors are interested in small cells, many remain unclear on the benefits they offer,” said Robin Gareiss, president of Nemertes Research. “Our research shows there is a significant opportunity for vendors and service providers to educate the market and provide solutions that improve the quality of mobile services.”
The research covered businesses across 17 vertical sectors across the globe. Some 30% of responses were from North America, with the rest drawn from Asia (28%), Europe (25%) and Central/South America (17%). The largest business sector represented was financial services, which also accounted for the highest number of existing deployments.
In percentage terms, however, the logistics and distribution industry, together with the retail sector, are the most enthusiastic current adopters with more than 20% of businesses in those sectors already using small cells.
At the same time the research showed that businesses are also looking for some advances from within the small cell industry. In particular, businesses would prefer multi-operator small cells and closer integration with WiFi services.
Despite all the attention on data capacity, poor quality voice connection was seen as the biggest challenge facing many businesses – cited by some 45% of the respondents compared to the 36% who listed slow data or email as the prime concern.
The growing business dependence on mobile connectivity was emphasised when 94% of respondents said that the quality of in-building cellular coverage had an impact on their business performance – on a scale of 1-10, some 42% gave it a rating of between 8-10 in terms of seriousness, with the healthcare sector notably prominent in these scores.
Many of those surveyed were also looking beyond the important improvement in coverage and capacity and towards new services and ways of working that could be driven by mobile.
Some 48% said they were interested in small cells as they would provide better connectivity for app-based services, a figure particularly notable for being ahead of voice connectivity which scored 43%. The potential for new services driven by small cells was also shown by the high scores for improvements in security and productivity which both scored 30%.
For those businesses with public locations – such as retail outlets and transport hubs – small cells delivering improved cellular coverage for visitors and customers scored highly at 42%. Support for mobile commerce applications (38%) and for improved social media engagement with visitors (36%) also emphasised the opportunity for app-based services using small cells for location-aware solutions.
Mobile Experts research in detail
The latest figures from Small Cell Forum providing by Mobile Experts show the total small cell market reaching some 13.3 million units in 2015 with some three million units shipped in the year alone.
Significantly, urban and business sales dominated small cell revenues in the year, accounting for 65% of the total as the market topped $1 billion for the first time. Forecasts show that this total market figure is set to reach $2.4 billion in 2016.
The figures show that in 2015, enterprise small cell shipments reached 400,000, more than doubling in the year, while the urban market grew nearly four-fold in 2015.
Small Cell Forum predicts that the rise of the enterprise will continue this year with forecasted shipment growth of 270% in 2016 with enterprise revenues alone reaching $1bn. Urban shipments too will continue to rise in the coming year – by more than double – as network operators continue to densify their networks using small cells. Over the two-year period, both the enterprise and the urban small cells markets will have experienced near ten-times growth.
Although residential small cells still account for the vast majority of shipments in the year, the second six months saw the shift towards non-residential small cell really accelerate to account for almost 40% of the total in the final quarter.
For the first time, non-residential small cell shipments reached almost half a million units (496,000) with North America and the Asia Pacific accounting for almost 60% of the total. In Latin America, non residential small cells represented 35% of the total market in the full year. Europe remains the largest market for small cells with 1.1 million units shipped in 2015.
The residential small cell market is predicted to continue to account for between 2.5 and 3 million units every year, but 2017 will see shipments of urban and enterprise small cells overtake the residential number and close in on 6 million annual sales by 2020. By 2020 enterprise small cell shipments alone will rise to be worth $4 billion annually.
Law said: “The numbers show the increasing importance of small cells to mobile usage. Whether it is operators looking to densify their networks, shopping malls looking to take advantage of mobile commerce, or businesses looking at new mobile-driven solutions, the small cell is central to the development. By 2020 these figures suggest small cells will make up around 85% of network infrastructure.
“This is now a market worth more than $1 billion annually,” he added, “and the question is no longer why do we do need small cells, but how can we deploy them at pace and what services can we drive using them. It’s a major market shift that is set to continue throughout 2016.”
An executive summary of both the Nemertes and Mobile Experts reports are available free of charge from Small Cell Forum at www.scf.io.
See also: New Small Cell Forum guidance aims to make the enterprises smarter