Why small cells are poised for growth in Latin America

Small cells mean big changes for mobile networks

Already an important element in 3G networks globally, small cells enable network coverage to be easily extended to accommodate data growth, especially in busy outdoor areas. However, as operators move to 4G/LTE networks and introduce heterogeneous networks (HetNets), small cells become even more important.

Why?  Because LTE technology promises higher bandwidth in the radio interface, end-users also expect better service, lower latency and more throughput. This also adds requirements for backhauling small cell traffic, which must not become the bottleneck.

“The mobile network is undergoing the biggest and most rapid change in its history due to small cells – they now account for 63% of all base stations globally. In 2013 we’re going to see it spill into the streets, shopping centers and enterprises,” predicts Gordon Mansfield, the Small Cell Forum’s Chairman.

Mobile broadband and LTE to drive small cell growth

The small cell market is forecast to hit $2.7 billion by 2017, according to Infonetics Research. Geographically, Infonetics expects Asia Pacific to lead the small cell market in 2013 with 50% of all units shipped, followed by EMEA with 34%, North America with 14% and Latin America with just 2%.

Why are the numbers so low for Latin America? One reason is the level of existing mobile infrastructure. In Latin America, 3G networks are still growing and in some cases have only recently been implemented. LTE is still in the early stages of adoption, with some early deployments in 2013 and more spectrum frequency auctions expected in 2014. The price and availability of 4G handsets (since some 4G deployments in Latin America use different frequencies than in the United States and Japan), have also limited take-up.

Another major factor is the relatively slow adoption of mobile broadband, partly due to socioeconomic factors. While Latin America as a whole has roughly the same number of subscribers as, for example, North America and Western Europe, the percentage of Latin American customers with mobile broadband is service far lower. In turn, the total traffic generated by those subscribers is much less.

As increased capacity is one of the main drivers for small cells, this helps explain why the trend towards small cells has been relatively slow in Latin America. Over time, this will change as demand for mobile data increases, and small cells are increasingly discussed by operators as a future element of their mobile networks.

Find Out More at Futurecom

Tellabs will be discussing these and other issues at Futurecom in Brazil, October 21-October 24, 2013.

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