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Rethinking the Small Cell Business Model

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Mobile Data Traffic Causes Small Cell Business Model Rethinking

Wireless data traffic continues to grow at an unprecedented rate. Cisco reported that in 2011 mobile data traffic experienced a 2.3 fold increase, reaching over 597 petabytes per month. To meet this demand, the wireless industry has recognized a need to add small cells to the deployment options. A small cell can be defined as an access point that provides a higher capacity over a small coverage area.

The business economics for deploying small cells differs from that of traditional micro and macro cells. By definition, many more small cells are required to provide the same coverage as one macro base station. The site acquisition, installation, and backhaul facility costs associated with deploying lots of small cells are considerably higher than the cost of deploying a macro cell. For small cell deployments to be financial viable, a new economic cost model is needed.

Over the past year, Intel and its partners have been conducting small cell trials that incorporate intelligence at the base station. This intelligence can be used to run network and application services on the base station. Trial results show that deploying intelligence at the access point can radically change the traffic profile, making the cost of deploying small cells increasingly viable.

Test results showed that deploying applications that improve the compression and transcoding of video stream, coupled with predictive and proactive data analytics, substantially reduced peak traffic loads. Reducing peak traffic loads has two profound effects. First, it significantly improved the subscriber’s experience as loading web pages and downloading videos is notably faster. Second, it reduced the required data rate of the backhaul connections. For service providers that lease their backhaul connections, the savings are considerable.

This paper discusses several applications and techniques that reduced the peak traffic on a base station by over 45 percent. It then uses an industry recognized business model to quantify one of the key benefits, backhaul operational costs.

Read the full Mobile Data Traffic Causes Small Cell Business Model Rethinking case study: http://www.intel.com/content/www/us/en/communications/communications-small-cell-study.html