Iain Gillott iain@iGR-Inc - WordPress.com

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Presented at TFI Communication Technology Asset Valuation Conference, January 28‐29, 2015Please contact speaker or TFI regarding reproducing presentation material.

Iain Gillott(512) 263-5682

[email protected]@iGR Inc.com

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Presented at TFI Communications Technology Asset Valuation Conference

January 28-29, 2015Radisson Downtown, Austin, Texas

Introduction Why LTE bandwidth is increasing

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y ba d dt s c eas g What consumers do On-the-Go Where and when the bandwidth is used Why Small Cells…and what are they? Deploying a Small Cell Small Cell Costs

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h Small Cell Costs Future architectures

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Wireless and Mobile L d

Small Cell Architectures

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Market Research & Subscription

Services

End-User Quantitative and

Qualitative Studies

Content Marketing

Landscape Architectures

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hCustom Research Services

Content Marketing Products and Media

Support

The needs of the end-user are king, from the prepaid customer to the large global corporation

The ability to offer and deliver a range of content to all types of mobile platforms (including connected cars and wearable devices) is essential

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g Network bandwidth needs to be made available where and when the user

demands it, not simply where the operator is able to make service available◦ This includes inside buildings, in the home and in the air

Mobile is an integral part of any Cloud or IoT architecture, product or service Old and existing security and privacy rules apply to the new world of IoT, mobile

devices, networks, services and content The device market is highly competitive, with effectively two brands dominating

the mobile space globally◦ New market entrants need clear market and product differentiation in order to even get

noticed, never mind succeed All content, services and communities will be available from all devices, regardless

f l i i f d f b db d i

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hof location, time of day, or type of broadband connection New technologies are penetrating the ICT industry faster than ever, and the rate of

change is accelerating◦ For example, mobile network virtualization is now a reality and the next few years will see

mobile architectures transformed with the application of SDN and NFV

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70%

80%Smartphone Tablet Laptop

S t h d

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20%

30%

40%

50%

60%Smartphone used almost the whole time people are

awake!

Tablet increasingly used

at home in the evening –

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0%

10%

5 am to 7 am

7 am to 9 am

9 am to 11 am

11 am to 1 pm

1 pm to 3 pm

3 pm to 5 pm

5 pm to 7 pm

7 pm to 9 pm

9 pm to 11 pm

11 pm to 5 am

evening remember this

point

2,500

3,000

400,000

450,000

Total LTE Network Usage in North America, 2014-

2019 (GB)

LTE Connections North America, 2014-2019

(000s)

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1,000

1,500

2,000

,

150,000

200,000

250,000

300,000

350,000

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0

500

2014 2015 2016 2017 2018 2019-

50,000

100,000

2014 2015 2016 2017 2018 2019

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60%

70%General data use

General data communication

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530%

40%

50%

Check social networking sites

Update social networking sites

Engage in Audio / Video chats

Watch videos

Play online games

Listen to streaming music / audio

Download music

Download apps / games / software / files for aver t

he n

ext f

ew y

ears

m

atch

wire

line

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0%

10%

20%

At Home On the Go

Download apps / games / software / files for a mobile deviceDownload apps / games / software / files for a desktop / laptopUpload / download from a cloud storage

All of these

None of theseW

ill g

row

ovto

m

Download apps/game/software/files for computer

Upload/download from cloud storage

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Update social networking

Engage in Audio / Video chats

Watch videos

Play online games

Listen to streaming music / audio

Download music

Download apps/games/software/files for mobile device

pp g p

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

General data use

General communication

Check social networking

Update social networking

Wi-Fi Mobile Data Both

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3,000,000 Video: 60% of Mobile

Data Traffic

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1,000,000

1,500,000

2,000,000

2,500,000

Apps

Video

Audio

General ActivityVideo: 48% of Mobile

Data

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0

500,000

2014 2015 2016 2017 2018 2019

Data Traffic

9

0.600

0.700

WiFi Only

WiFi Offload - Carrier 0.600

0.700

2013 2018, I

nc, 2

015

0.200

0.300

0.400

0.500WiFi Offload - User

Mobile Broadband

Home WiFi

0.200

0.300

0.400

0.500

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0.000

0.100

0.000

0.100

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Macro networks cover metro areas relatively wellBut LTE devices tend to be used statically - video

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Creates capacity demand hotspotsHotspots move over time as people move

Not spots also exist and need to be addressediGR has model for bandwidth demand – network capacity for

a given area

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hSolution Description Technology # of Users Cell Radius

DAS Typically fed by a macro or micro base station. High power, multi-frequency,

UMTS, HSPA+, LTE Up to 1,800 users per base station

Up to 3 miles

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multi-carrier

WiFi A wireless access point connects a group of wireless devices to an adjacent wired LAN

802.11b/g/n; AC (forthcoming)

Up to 200 users per a 3-radio access point

65 feet

Microcell Short-range base station used for enhancing indoor and/or outdoor coverage

UMTS, HSPA+, LTE 32 to 200 users Up to ~1 mile

Metrocell High-capacity, low power device that fills in coverage holes within buildings

UMTS, HSPA+, LTE 16 to 32 users 10,000 to 20,000 square feet

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Source: AT&T’s Antenna Solutions Group, 2014

Picocell Typically used for indoor applications such as office buildings, airports and malls

UMTS, HSPA+, LTE 32 users Up to 750 feet

Femtocell A small, low-power cellular base station typically used for a home or small business

UMTS, HSPA+, LTE 4-6 users 40 feet

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Low cost, small form factor Light enough to be mounted in exposed and/or precarious locations

(poles, building sides, roofs, etc.Resistant to the elements and to tampering

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Resistant to the elements and to tampering Tolerate sway (from wind); this also applies to wireless backhaul systems Low power operations so as to provide targeted coverage/capacity Capable of monitoring the surrounding RF landscape to manage and

reduce interference from neighboring cells Fast and easy installation that can be done by skilled or semi-skilled

individuals who may (or may not) be employees of the mobile operator needing the small cells◦ This also applies to the backhaul connection, particularly if the installation requires a

wireless backhaul systemOnce po ered on the small cell sho ld connect to the ser er that

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h Once powered on, the small cell should connect to the server that authenticates the device and then provisions its main parameters, updates firmware/software if required, etc.

Self- provisioning of radio access network (RAN) parameters Low latency backhaul, to support the LTE X1 and S2 interfaces, and

support for multiple synchronization methods

iGR assumes that small cells will most likely be deployed into dense urban, urban or heavily populated suburban areas

Buildings, and their roofs, are ideal for small cell deployments Exterior building walls are also a possibility

Major $$$ factor

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Exterior building walls are also a possibility Street furniture

◦ Broad term that refers to any number of items typically seen in an urban landscape – benches, bill boards, bus stops, traffic barriers, traffic lights and signs, light poles, utility poles, garbage cans, etc.

◦ Some of the above are suitable for small cell deployment. Some are not◦ Deployable assets boils down to street fixtures that have elevation and access to power – poles

of numerous variety, bill boards, water towers, etc. Not all street poles (non traffic related) are created equal. In short, there a few types

of entities that own those poles: ◦ ILECs (the incumbent local exchange carrier) ◦ Utilities◦ Municipalities

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h◦ Municipalities◦ On utility poles, small cells (and any backhaul) would have to be attached in the

communications space where all the communications providers have their gear◦ Note that lamp/light posts may not have enough additional power/circuits to drive the small

cell attached to it. This would be an issue discovered in the site location process◦ Back-up power is typically not provided for in the current small cell deployments

Adhere to any zoning provisions related to the placement of small cells and permitting process◦ May also be building codes and landmark and historic preservation codes, aesthetic

requirements, power, environmental and safety regulation

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Options: Wired or Wireless Within each of those types, there are multiple options Fiber appears to be the preferred backhaul for cellular systems

Major $$$ factor

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pp p yregardless of their type, but fiber is:◦ Not always where it is needed◦ Very expensive to get to where it is needed, particularly for outdoor

deployments where trenching is required Note that fiber tends to be plentiful in urban areas and relatively

scarce in rural areas Some small cells might be backhauled to a nearby macro cell site

requiring that the bandwidth of the existing macro backhaul be increased

Mobile operator may have multiple co located small cells serving

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h Mobile operator may have multiple co-located small cells serving different “pain points” from a rooftop◦ May require a combination of wireless technologies (LOS and NLOS),

backhaul architectures (star, ring, etc.) along with local aggregation◦ No single backhaul topology will be optimal in all use cases◦ Flexibility is critical to successful deployments

LTE macrocells require a minimum of 100 Mbps and iGR expects that to scale rather quickly to 1 Gbps or even 10 Gbps as LTE devices increasingly penetrate

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e e 0 Gbps as de ces c eas g y pe et atethe market

Backhaul architecture for LTE has to support two interfaces: ◦ S1: the interface from LTE eNBs to the EPC (the EPC includes

the S-GW and the MME) ◦ X2: the interface connecting eNBs to other eNBs that are

typically organized into logical groups Current generation of small cells support only one

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hg pp yomnidirectional cell and one carrier per site◦ Amount of backhaul required for a single LTE carrier

(10x10 MHz) would be lower than what would be required for an LTE macrocell

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015

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10


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MCDS

Scenarios modeled includes the costs for 10, 50 and 100 cell deployments

Location scenarios are:

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◦ Existing pole◦ New pole◦ Building wall◦ Building roof

Type of small cells are:◦ LTE multimode◦ LTE RRH

Types of backhaul are:Lit fib i l d t h d

39 Scenarios modeled

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h◦ Lit fiber, aerial and trenched◦ Dark fiber, aerial and trenched◦ Lit fiber (transfer pricing), aerial and trenched◦ Dark fiber (transfer pricing), aerial and trenched◦ Wireless backhaul, point to multipoint

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Cost item Configuration

Type of Small Cell LTE multimodeExisting pole

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Location

Existing poleMake‐ready

One attachment

Backhaul

Lit fiberAerialLeased

500 feet25 Mbps

Installation requirements (per site)One installerBucket truck

1 Cell $xxxxx

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Capital expenses

1 Cell $xxxxx

10 Cells $xxxxxx

50 Cells $xxxxxxx

100 Cells $xxxxxxx

Operating expenses (per year)

1 Cell $xxxxx

10 Cells $xxxxxx

50 Cells $xxxxxx

100 Cells $xxxxxx

Cost item Configuration

Type of Small Cell LTE MetrocellBuilding roof

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Location

Building roofMake ready

One attachment

BackhaulWireless Backhaul

25 Mbps

Installation requirements (per site) One installer

1 Cell $XXXX

10 Cells $XXXXX

50 C ll $XXXXXX

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Capital expenses

50 Cells $XXXXXX

100 Cells $XXXXXX

Operating expenses (per year)

1 Cell $XXXX

10 Cells $XXXXX

50 Cells $XXXXXX

100 Cells $XXXXXX

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$64,160

$60,000

$70,000

CapEx

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$31,008

$20,000

$30,000

$40,000

$50,000

OpEx

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$6,670

$14,242

$868

$6,191

$0

$10,000

Highest cost scenarios Lowest cost scenarios Median costs for all scenarios

RAN

RRH PCRF

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Metro data center

EPC (distributed)

Local data center/Central

Office

National data center

IP core

SDN

EPC

RRH(on

building)

Macro(on tower)

Baseband UnitCPRI

100,000s

150,000

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Metro(lamp post)

S-GW P-GW

100,000s1,000 100 5

24

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Iain Gillott iain@iGR-Inc - WordPress.com