Market Insight

Small cell market surges in 2017, energized by rural, remote and indoor deployments

March 23, 2018

Richard Webb Richard Webb Director, Research and Analysis, Service Provider Technology

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Following are highlights from the second half 2017 edition of the IHS Markit Small Cell Equipment Market Tracker, which includes data for the half-year ended December 31, 2017. The report tracks enterprise small cell and service provider small cell equipment, as well as small cells by application.

Worldwide, 2.3 million small cell units shipped during 2017, resulting in an increase of 39 percent year over year. Revenue totaled $1.8 billion in 2017 (+20 percent year over year), mainly driven by rural and remote areas, particularly individual large-scale deployments in India by Reliance Jio — and to some extent in China, which is no longer in the driver’s seat. In addition, the market benefitted from 4x4 MIMO and 256QAM upgrades on existing small cells, as new products that support these features are more expensive.

“We continue to see increasing small cell activity, with impact being made by enterprise small cell services offered by MNOs to attract high-value corporate and vertical customers,” said Richard Webb, associate director, mobile backhaul and small cells research at IHS Markit. “This enterprise segment is strongly fueling indoor small cells unit shipments, which are far greater than outdoor small cell rollouts.”

Longer term, IHS Markit projects the small cell market to hit $2.8 billion in 2022, growing at a compound annual growth rate (CAGR) of 9.6 percent over the five years from 2017 to 2022.

“The volume of indoor units will continue to increase above that of outdoor out to 2022,” said Stéphane Téral, executive director, mobile infrastructure and carrier economics research at IHS Markit. “However, outdoor revenue will be higher because outdoor small cells are significantly more expensive with new 4G features such as higher-order MIMO and 256QAM.”

Additional small cell market highlights

  • Driven by activity in China and India, Asia-Pacific led all regions in service provider small cell units, with 56 percent in 2017; the remainder of the bulk of small cell rollout activity was in Canada, Japan and the US
  • Typically, the larger the cell, the higher the ARPU — leading to suburban, rural and remote small cells having the highest share of small cell revenue
  • The indoor market, comprising the indoor urban and enterprise sub segments, is moving rapidly toward commoditization as volumes rise and service providers seek plug-and-play form factors
  • Some changes in small cell market share leadership are expected in 2018 as SpiderCloud’s lead is eroded by large players such as Nokia and Cisco

Small Cell Equipment Market Tracker synopsis

The biannual small cell report from IHS Markit provides worldwide and regional market size, forecasts through 2022, analysis and trends for enterprise small cell and service provider small cell (urban, rural and remote) equipment, and small cells by application (indoor and outdoor). The report also includes a small cell activity tracker.

Research by Market
Mobile & Telecom
Mobile Networks
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