Joe Madden, founder and lead analyst at Mobile Experts predicts that now that operators have deployed much of their 5G macro network, they will turn their attention to small cells and use the technology to fill in coverage gaps, solve capacity issues and provide in-building coverage.
Although small cell deployments didn’t get a lot of attention in 2022, industry trade group CTIA reported in its 2023 annual survey, released last month, that small cell deployments increased 13% in 2022 as compared to 2021. CTIA said that as of the end of 2022 there were 142,000 small cells deployed across the country compared to 125,000 at the end of 2021.
In addition, the Small Cell Forum, which released its Market Forecast Report 2023 in July said that the number of small cells globally increased 15% from the end of 2021 to the end of 2022 and the organization expects the same amount of growth in 2023.
However, the Small Cell Forum noted that it expects North American to have the slowest small cell growth compared to other regions like Latin America and Africa. The forum said that the reason North America will be slower is that it believes this market deployed more small cells earlier than other regions so its growth will not be as extreme.
Small cell uptick won’t be impeded by lower capex
Although U.S. wireless operators are reducing their capex spending this year that doesn’t necessarily mean than small cell deployments will be flat. Madden believes that an uptick in small cell deployments will occur even as operators pullback on their capex spending.
Verizon has said it expects its capex spending in 2023 to fall somewhere between $18.25 billion and $19.25 billion as compared to the $23 billion that the company spent in 2022. Likewise, T-Mobile has said that it expects its capex spending to be between $9.4 billion and $9.7 billion in 2023 a decrease from the $14 billion that the company spent in 2022.
AT&T spent a total of $24.3 billion on capex in 2022 but unlike its peers Verizon and T-Mobile, the company said it expects to spend around that same amount this year. However, the operator indicated that a large portion of that capex spend will go toward its fiber network, instead of its wireless network.
Executives at Crown Castle are also expecting an increase in small cell deployments. During the company’s Q2 earnings call with investors Crown Castle CEO Jay Brown said that the company expects to “drive double-digit small cell revenue growth starting in 2024.”
Besides filling in coverage and capacity holes, Brown said that he believes the popularity of fixed wireless access (FWA) as a 5G use case may also prompt more small cell deployments, adding that the company has seen increases in small cell nodes where operators have deployed FWA.
But Madden is less bullish on FWA’s popularity prompting more small cells because he believes that small cells are primarily helpful for adding coverage for mobile users, whose traffic patterns are unpredictable. Because FWA users are stationary, Madden said it is more economical for operators to solve FWA capacity issues by deploying radios in millimeter wave (mmWave) spectrum or adding more capacity to the macro network.
However, Madden said that there are other reasons to anticipate a boost in small cells. For example, he believes that there is growing interest from enterprises in building private networks and those networks will most likely use small cell radios.
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