Installation of massive, conventional cell towers is increasingly impractical and costly in high-density urban centres.
In contrast, energy-efficient small cells are typically not much larger than a Rubik's cube-sized small cell that can fit in the palm of your hand. The small cells can be mounted on street lamps, bus shelters or buildings in any city location. The cube-shaped miniature base station will allow operators to install city centre networks quickly and easily without resorting to a new set of macro towers and base stations. The cube is now the answer to the mobile broadband industry's spectrum crisis.
But with the growth of small cells, expected to surpass the number of regular cell towers by a factor of 10 times in the next couple years, the "connection" to the Internet suddenly becomes extremely complex for mobile operators.
What's at risk
The mobile backhaul market is expected to grow from US$7.7 billion in 2012 to US$9.7 billion by 2016, thanks to continued demand for wireless broadband coverage by consumers, according to a recent report from Infonetics, a Silicon Valley-based research group.
Consider the case if those radios are not well-connected; as much as US$1 trillion in mobile services revenue could be at risk.
4G mobile expects significant improvement in both speed and coverage. If telecom operators cannot keep up with the technology and deliver on 4G's promise, there is a chance that the business will be hit hard by a market reshuffle that results from the delays in wireless infrastructure upgrades.
Ric Clark is vice president of Asia Pacific Marketing, Strategy and Public Affairs at Alcatel-Lucent
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