Surge in LTE-U to drive indoor small cells market to $1.8bn by 2021

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Increasing support for unlicensed spectrum technologies, including LTE-LAA and Wi-Fi, will help the global indoor small cell market achieve revenues of $1.8 billion in 2021, according to ABI Research.

The research firm predicts support for LTE-based and Wi-Fi technologies using unlicensed spectrum within small cell equipment will grow to comprise 51 percent of total annual shipments by 2021 at a CAGR of 47 percent.

“Unlicensed LTE (LTE-U) had a rough start, meeting negative and sceptic reactions to its possible conflict with Wi-Fi operations in the 5GHz bands. But the ongoing standardisation and coexistence efforts [have] increased the support in the technology ecosystem,” said Ahmed Ali, Senior Analyst at ABI Research.

LTE-U enables the use of unlicensed spectrum as a capacity booster, anchored to a carrier in a licensed band. It builds to a large extent on the 3GPP’s release 10 on carrier aggregation, and will address markets in most need of additional spectrum.

Licence Assisted Access (LAA), defined in the 3GPP’s release 13, also makes use of both licensed spectrum for coverage and call set-up control, and unlicensed spectrum for data performance and capacity. But its coexistence mechanism is more stringent.

Early versions of LTE-U sought to avoid interference with technologies such as Wi-Fi by a technique called ‘carrier sensing adaptive transmission’, which went far enough for US law makers, notably, but not for European regulators.

LAA, along with newer versions of LTE-U, introduce the ‘listen-before-talk’ (LBT) protocol, which searches out a clear radio channel before transmitting, and is this way considered to share spectrum more fairly. Regulatory barriers have fallen away.

Both technologies are aimed at mobile operators with licensed spectrum, and are under consideration particularly by those with a limited amount of it. Europe will wait on the LAA standard, which will roll out as a default technology in 2017; other markets will deploy LTE-U small cells in the meantime.

Meanwhile, the IEEE and Wi-Fi Alliance are also developing a coexistence testing process to ensure unlicensed spectrum is shared more fairly by multiple technologies.

“The dynamic and diverse nature of indoor venues calls for an all-inclusive small cell network that intelligently adapts to different user requirements. Support for multi-operation features like 3G/4G and Wi-Fi/LAA access is necessary for the enterprise market,” said Ali.

The Small Cells Forum reckons 60 percent of enterprises will have deployed small cell technology by the end of 2017, as demand continues to rise. It claimed an installed base of 13.3 million small cells in 2015, with revenues topping $1 billion for the first time.

Latest shipment forecasts from analyst firm Mobile Experts predict the number of enterprise small cells to double during 2016, with sales growth of 270 per cent in the year. Mobile Experts says small cell shipments will rise to be worth $4 billion annually by 2020.

Meanwhile, the telecoms industry continues to test the technology. Vodacom and Huawei held LAA tests, aggregating licensed and unlicensed spectrum, in South Africa in June, as the pair launched the continents first 1GBps network.

In March, Telefónica and Ericsson combined unlicensed 5GHz spectrum and Telefónica’s own spectrum holdings to run an over-the-air demonstration of LAA technology in Spain.

With its roots in LAA, industry consortium MuLTEfire said in March it wants to offer an LTE-like experience without the need for any spectrum at all. The group, comprising Qualcomm, Intel, Ericsson and Nokia, is targeted stadiums, public venues and university campuses, and proposes a network of small cells transmitting entirely over unlicensed spectrum.