Capital expenditures on wireless infrastructure equipment will continue to increase this year as mobile operators increasingly transition to 4G Long Term Evolution (LTE), but more heterogeneous architectures such as small cells will also need to be deployed to ease flagrant data congestion, according to an IHS iSuppli Wireless Communications special report from information and analytics provider IHS.
Spending in 2013 on wireless infrastructure equipment-long a barometer of growth in the wireless space-is projected to reach $44.7 billion, up a solid 5 percent from $42.7 billion in 2012. Capital expenditures by mobile network operators are set to rise another 2 percent next year to $45.6 billion, on their way to $47.1 billion by 2016.
This year for the first time, LTE will account for the largest share of wireless infrastructure capital spending, equivalent to some $23.7 billion, up from $8.0 billion in 2012. And to allow capacity to keep pace with the increased usage of mobile broadband, carriers are actively investigating new strategies in areas of high data demand. This is because data traffic continues to explode, especially in major urban centers and conurbations, thanks to the near-nonstop use by consumers and business entities alike of smartphones, tablets, computers and other connected devices.
But instead of deploying new macro and micro base stations that form the crux of current networking architectures, carriers are now choosing to offload data traffic to Wi-Fi networks. Here they are selectively trialing heterogeneous networking architectures including small cell, cloud Radio Access Networks (RAN), in-building femto cells and hybrid base stations that support both cellular and Wi-Fi technologies.
For instance, metro cells-low-power base stations that can support approximately 100 to 200 simultaneous users-are being used to fill coverage holes while also adding networking capacity in areas of high data traffic. Such cells are typically mounted in public facilities like malls, street or traffic lights, and railway and subway stations, communicating with a core network to ensure that spectrum resources are properly managed and distributed, even while available capacity is maximized.
Although small cells cover a much smaller area than macro or micro base stations, the complexity of small-cell functionality rivals that of their larger cousins. Small cells are different from residential femto base stations, which are primarily intended to provide indoor coverage for consumer dwellings and support anywhere from 4 to 16 simultaneous users. Small cells are also distinct from the enterprise femtos aimed at office buildings and campuses that support up to 64 users.
In general, residential and enterprise femto base stations will be indoor solutions that address in-building coverage issues, while small cells are outdoor solutions that tackle questions of capacity. Both solutions will coexist alongside macro and micro base stations, as well as with Wi-Fi access points, in order to provide a heterogeneous networking architecture. By combining different elements of this type of architecture, carriers can deploy optimized solutions tailored to the coverage and capacity requirements governing the different locations of their networks.
Semiconductor suppliers, for their part, are trying to address the challenge of small cells with solutions that reflect their heritage. Suppliers like Texas Instruments and Freescale Semiconductor, for instance, are targeting the metro cell market with digital signal processing (DLP) solutions that they pioneered in the past. In comparison, companies like Mindspeed and Broadcom are addressing the market with scaled-up versions of their System-on-Chip (SoC) solutions.
Given the complexity of the requirements of small cells and the move by infrastructure vendors to seek an ecosystem solution common across multiple platforms, the DSP solutions of TI and Freescale have an edge over their rivals, IHS iSuppli believes. That being said, SoCs will still be able to successfully address many segments of the small-cell market.
All told, semiconductor suppliers must develop solutions that provide flexibility, speed and processing power needed to meet the requirements of the new standards. The ideal solutions will incorporate optimum levels of hardware acceleration, while simultaneously providing high levels of design flexibility.