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From 4G Trends

We all love a fight, and for a long time small cells and Wi-Fi offload have been presented as competing approaches, mostly with Wi-Fi as the initial, cheap-and-cheerful solution that would eventually be replaced by carrier-grade small cell deployments in high-density areas.

This is not what is happening. The pressure on mobile operators to increase capacity – and especially capacity density (i.e., mbps per square mile) – is so strong that they cannot pick between small cells and Wi-Fi, but they equally need both. And this is because operators increasingly realize that the two technologies not only offer an incremental increase in capacity, but they can play a different, complementary role.

Although operators have been offering Wi-Fi offload for some time now, their approach is slowly evolving, towards a more extensive use of Wi-Fi, a tighter integration with their cellular networks, and a better management of Wi-Fi connectivity. While Wi-Fi access in public hotspots grabs most headlines, operators have come to value Wi-Fi most for offloading traffic from home. Across the world, the peak in data traffic is at around 9:00pm and a good portion of this comes from home usage. As most subscribers have a broadband connection and Wi-Fi in their homes, offloading this traffic is easy, effective, and low-cost to implement. (On the other hand, a widespread increase in capacity in residential areas would be very expensive.) As Wi-Fi offload captures an increasing portion of data traffic, operators have become more interested in integrating it within their networks, to retain visibility into their subscriber experience and to manage the traffic as required. In this perspective, the Wi-Fi Alliance PassPoint program, Hotspot 2.0, and SIM-based authentication are likely to provide a better Wi-Fi offload experience. Similarly, the acquisition of Belair by Ericsson – a vendor that for a long time has kept its distance from Wi-Fi – demonstrates that Wi-Fi has now come of age and become an integral component of new mobile broadband networks.

The expanding role of Wi-Fi offload however does not alter the demand for small cells. In a recent survey of mobile operators we conducted on behalf of Radisys and available here, operators agree on the need for small cells, even though the sense of urgency varies across geography (see graph). With its longer record track in dense deployments and indoor coverage, and more densely built urban areas, APAC is not surprising at the leading edge. European operators are also very actively working on their small cell plan, driven by higher concentration of subscribers in central areas, while a more spread out subscriber base explains the less urgency that North American operators have for small cell deployments.

The deployment scenario for small cells is very different from Wi-Fi hotspots. While Wi-Fi hotspots tend to be deployed at indoor locations and often leverage third-party infrastructure, small cells are mostly planned for outdoor locations, from where they can reach both outdoor and indoor subscribers. While wholesale arrangements are considered, most operators plan to deploy and operate their small cell infrastructure, and have it tightly integrated within a multi-layer HetNet topology.

Another key difference between Wi-Fi and small cells is the business case. Wi-Fi offload from residential locations and in most public hotspot has a compelling business case. Costs however can rapidly escalate if Wi-Fi is to be deployed very densely. This is where small cells can provide a more cost-effective solution, but strength of the business case is still being debated, as the deployment model is entirely new for mobile operators. In particular, backhaul is becoming the biggest variable (and challenge) in small cell deployments. Another key challenge is the interference management with multi-layer HetNets, where the small cells use the same channels as the macro cells. Unless interference can be successfully managed, the capacity benefits from small cells may not be fully realized, and hence this would raise the cost-per-GB and make the business case less attractive.

Most operators agree that, while there is still work ahead to resolve the business case and technology challenges, the need for small cells will intensify as LTE adoption grows, and Wi-Fi will continue to provide capacity relief, but itself will eventually run into spectrum and capacity limitations. And at this point, it may be the Wi-Fi network that will need an LTE small-cell offload.

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