The Asia-Pacific Small Cell 5G Market is expected to register a CAGR of 5.6 % over the forecast period from 2020 to 2025. A majority of the 5G networks are likely to be composed of small cells. Small cells are vital to the functionality of 5G networks because they provide increased data capacity that 5G demands. They also help providers reduce costs by eliminating expensive rooftop systems and installation costs, and they are expected to help improve the performance and battery life of mobile handsets.
- Asia-Pacific is expected to witness the highest growth rate owing to the increase in the adoption of mobile devices and various partnerships between vendors in the area of 5G. For instance, In January 2019, TPG Telecom collaborated with China's Huawei and placed small cell boxes on power poles across the suburb of Ryde, in Sydney's north-west, to augment the Australian governments plans for a 5G rollout.
- Additionally, over the forecast period, the small cell deployment is anticipated to increase to meet the growing demand for data traffic in IoT applications. Companies are actively and increasingly investing in small cell 5G network infrastructure to make an early move on the establishing 5G network. In the future, data transmissions for water supply valves, power supply switches, surveillance probes, and office devices are expected to be carried on small cells. This would require small cells to take more network connections and increase the network value, thus raising revenues for operators.
- With the increasing demand for networks, companies in the region are creating new approaches to small cell deployments. They have the potential to make small cells more affordable and attractive for both MNOs and vertical enterprises. Additionally, NFV and SDNs are the simplified and virtualized network options providing building blocks for enhanced capabilities through function centralization. Moving out the functions from the small cell base station results in a range of new skills and business models based on a reimaged, multi-operator RAN that enables as a consumed as a service.
- The 5G mmWave small cells are currently targeted to typically cover cell radii of around 100-200 m. They are generally on rooftops and light poles and for indoor hotspots in shopping malls, offices, and transit hubs. Further, small cells offer a cost-effective solution for completing the coverage gaps, with increased bandwidth and getting the networks ready for 5G and without the need to build expensive macro sites. With more high-frequency bands to be utilized for 5G deployments, macro base stations alone are expected to stand a lot of areas uncovered. It, therefore, becomes inevitable to use small-sized, low-powered small cells to improve user experience, particularly in cell-edge areas.
- The impact of the COVID-19 outbreak on the mobile industry is significant. In the short term, 5G rollout in several markets will be delayed further, and its services will be the hardest hit. Consumers may not in a position to spend on small cell 5G devices as it is still considered a niche. According to GSMA Intelligence's consumer survey, currently, the majority of the respondents in most markets had limited interest in upgrading to 5G services.
Key Market Trends
Telecom Operators are expected to Hold Significant Share
- Small cells are uniquely capable of handling high data rates for mobile broadband, and consumers for IoT, high densities of low-speed, low-power devices. This feature makes them perfect for the 5G rollout that promises ultra-high speeds, a million devices per square mile, and latencies in the millisecond range. Owing to this, telecom operators across the region are employing small cell technology for 5G rollout. Additionally, the network operators who are keen on CAPEX and OPEX costs reduction strategies are exploring how to put machine learning models in small cell designs as well.
- Moreover, the published PHY API for 5G by Small Cell Forum (SCF), the telecoms organization making mobile infrastructure solutions available to all, has stimulated a competitive ecosystem for vendors of 5G small cell hardware, software, and equipment. With the increase in data usage and demand for high-speed data, the telecom companies are benefited from the SCF's competitive ecosystem by increasing the market for the 5G network.
- Operators in the region have got multiple options to deal with coverage and capacity issues. The possibilities of purchasing an additional spectrum can prove to be expensive compared to deploying small cells for spatial efficiency (with up to 56x capacity gain over the next ten years). As network densification gains traction in the market with a 5G network, the small cell deployment is expected to become necessary. For instance, Ericsson's collaboration with China Unicom represents the most massive deployment of the Radio Dot System in Beijing (at over 500 commercial and residential buildings).
- Australian operators have already deployed a lot of LTE Small Cells infrastructure to fill the coverage holes from the macro cell sites and offer capacity for densely populated regions. Optus, the Singtel's subsidiary and the second-largest telecom in Australia, currently offers limited 5G service in parts of Canberra and Sydney with initial launches focused on 5G home broadband.
- In January 2019, Nokia collaborated with the company to supply its 5G RAN and Fastmile 5G CPEs. The company is planning to develop 1,200 5G sites across the country by 2020. In February 2019, it collaborated with Ericsson to deploy 50 5G sites across the cities of Sydney and Melbourne as part of a multi-vendor rollout.
China is Expected to Hold Major Share
- As Small Cells are touted to be a significant building block in 5G networks, many of the local network providers are also investing in the equipment, further expanding the studied market growth. For instance, in May 2019, China-based LTE Small Cell provider and a broadband access product manufacturer, T&W expanded its existing Small Cell product line by supporting 5G Small Cell solutions powered by Qualcomm FSM100xx 5G Platform.
- In November 2019, Akoustis Technologies, Inc., an integrated device manufacturer (IDM) of patented bulk acoustic wave (BAW) high-band RF filters for mobile and other wireless applications, has mentioned of introducing its first 5G small cell base station XBAW filter solution. This new XBAW filter is designed specifically for the challenging filtering needs for band 79 in the emerging 5G small cell network infrastructure deployed across China. The company has planned to commence its shipment to China of first samples to be delivered for evaluation by a new tier-1 customer in the country, a multi-billion-dollar global leader in telecommunications and information technology.
- In 2020, China Mobile, the world's largest mobile operator in terms of subscribers, has launched a tender for the second phase of its 5G network rollout. The Chinese carrier has already implemented the first phase of its 5G network deployment. In its 5G program, the carrier aims to acquire over 232,000 5G base stations as it looks to extend coverage to 28 regions across China. Currently, China Mobile provides coverage of 5G networks in 50 cities. The operator is expecting to have a total of 300,000 5G sites across China by the end of 2020. This could create a positive impact on the market as Small cells are expected to be a significant building block for 5G networks.
- However, the rollout of 5G by China Mobile could potentially face some disruptions by the spread of the COVID-19. In February 2020, the operator said that it was planning to push deployment of 5G infrastructure through the rest of the year, it was possible that the situation with coronavirus could affect these plans. The carrier aims to end 2020 with a total of 70 million 5G users, with a planned investment of CNY20 billion.
The Asia-Pacific Small Cell 5G market is quite consolidated. Some of the market's established vendors include Qualcomm Technologies Inc., Cisco Systems Inc., Ericsson, and Nokia Networks Inc, among others. These companies are executing strategic partnerships, with various telecom operators and enterprises increase the penetration of 5G network in the region by providing small cells as they provide the increased data capacity that 5G demands.
- March 2020 - China Unicom Beijing and Huawei together completed the first commercial installation of the telecom equipment provider's small cell 5G LampSite 300 MHz digital indoor system. The system, which was deployed at the Beijing Long Distance Call Building, supports network sharing between China Unicom Beijing and China Telecom Beijing and provides a downlink rate of up to 3.4 Gbps.
- March 2020 - -Keysight Technologies, Inc. announced that Qualcomm Technologies, Inc. is working with the company to accelerate small cell deployment supported by 5G virtualized radio access network (vRAN) architecture. The solution accelerates the verification of small cell RUs using the 5G NR capability of Qualcomm FSM 100xx to support a smooth transition from product design to manufacturing test.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support