SCF050 - Market-Status - Jul 2020

DOCUMENT
050.10.4
SCF market status report

July 2020
Small cells and digital transformation
workplan.smallcellforum.org/2021
Contents
Introduction 4
1. Overview and forecast 6
2. Enterprise deployments and drivers 10
3. Urban drivers 13
4. Diversification of small cell deployers 16
5. Management and automation 21
6. Architecture choices 23
7. Conclusion 26
About the survey 27
DOCUMENT 050.10.4 | SCF market status report | July 2020 2

Note
Throughout the forecast, a small cell unit refers to a radio unit, unless otherwise
stated. In some cases, multiple units may share one baseband unit.
See About the survey for methodology. Surveys were carried out
in the first quarter of 2020 and respondents included 78 mobile
operators worldwide and 26 other deployers such as private
network operators, neutral hosts and fixed-line operators.
Forecasts for 2020 and 2021 have been adjusted for a moderate scenario of
Covid-19 impact. At the current time we expect this to cause short term disruption
to supply chain, standards and financing, and have downgraded estimates for
the second and third quarters of 2020 accordingly.We expect a bounce-back
from the fourth quarter, including some acceleration of deployment because
of increased demand and stimulus programs, but offset by uncertainty in the
enterprise sector. By the end of 2021, our forecast is close to the pre-pandemic
estimates, but the worst-case scenarios set out in this report take account of
the negative impact potentially persisting into 2022. In our best-case scenario
for the impact of Covid-19, deployments and upgrades could be 19% above
the base forecast by 2026, while in the worst case, they would be 11% below.

Introduction
Each year, Small Cell Forum publishes a Market Status report,

built around a detailed forecast of deployment of small cell
networks in a range of scenarios, plus in-depth analysis of
the factors driving or holding back those roll-outs.
The core data source, as always, was a survey of about 100

operators about their plans for the next six years. Some questions
have remained constant since the first report, in order to track
changing patterns of adoption through comparison. Those include
questions about expected deployments by cell numbers, timescale
and business case; as well as key drivers and barriers.
Other questions are added or changed, based on input from Forum

members, to reflect the evolving state of the market. In this year’s
study, for instance, there was greater focus on network sharing, private
networks and open architectures than in previous reports, mirroring
the rising interest of the industry as a whole in these areas.
Both the questions and the responses reflect the way the small cell sector
has changed in recent years. As the industry has developed, so it has
diversified in many directions. This reflects the growing maturity of the
sector, the broadening of the use cases that small cells need to support, and
the rising variety of form factors and spectrum bands that are required.
Diversification makes SCF’s work more vital than ever
So, small cells now come in a huge variety of form factors, from tiny wall
mounted access points serving enterprise venues and private industrial
networks, , to mini-macro cells which can serve a dense urban hotzone.
The use cases they support are also growing increasingly varied, as
cellular connectivity becomes critical not just for mobile broadband,
but a whole range of business functions and services, driven by trends
such as Industry 4.0 and the Industrial IoT. Many of the emerging
applications for enterprise and industrial 4G or 5G are reliant on excellent
ubiquitous coverage, including deep inside buildings, or in remote areas
or urban canyons. This can only really be achieved with small cells.
Diversity is also seen in the organizations deploying and monetizing

small cells, with neutral hosts, private network operators and
enterprise integrators joining conventional mobile network operators
(MNOs). Just as cellular networks need to support a widening variety
of connectivity requirements and applications, so the classic MNO
model will not enable all those profitably. In some cases, the sharing
of infrastructure via neutral host platforms can transform the profit
case for a roll-out, as well as supporting many service providers
– with future evolution to a more dynamic, on-demand access to
connectivity, following the same pattern as the cloud industry.

In other cases, private or specialist operators will be best placed to
understand and deliver the requirements of a particular industry or
location, and to be able to build a strong business case around that.
Finally, there is diversification of architecture. Small Cell Forum has

a long history of developing and promoting common platforms and
interfaces, which provide scale and uniformity, on which many vendors and
operators can innovate. This approach is even more vital at a time when
deployers are looking for different architectures to support different use
cases or environments. Important trends include disaggregation of the
network; the migration towards cloud-native platforms; the definition
of open interfaces between network elements; and the integration
of edge computing with small cell networks and business models.
Diversity breeds innovation and means there can be a small cell platform
and business case for each different requirement. But it comes with the
risk of fragmentation and chaos. Preventing this, by distilling common
industry requirements into a work program which supports open,
unified platforms, is the heart of SCF’s mission. The work program for
2020-2021 reflects the themes and requirements outlined above, and
these are the focus for this year’s Market Status survey and report.

1. Overview and forecast
Our top-line global forecast for deployment and upgrade of small

cells shows a healthy compound annual growth rate (CAGR) of 13%
between 2019 and 2026, rising from a rate of 2.7 million in 2019
to 6.3 million by the end of the forecast period. That represents a
cumulative total of 38.3 million small cells deployed (Figure 1).
While the highest CAGR (24%) will be seen in the urban environment,
this is coming from a lower starting point – in 2019, over 80% of
deployments were in indoor enterprise, industrial and campus settings.
Enterprise small cells will account for the largest number of deployments
throughout the period and by 2026 will account for 68% of the installed
base, with a CAGR of 9%. Rural and remote small cells will be increasingly
prominent as a result of the ubiquitous coverage requirements of
some industrial and IoT applications, for instance in transportation or
mining. The CAGR will be 19% in the period and by the end of 2026,
957 thousand rural and remote radio heads will have been installed.
4,500
4,000
3,500
3,000
,000 RUs
2,500
2,000
1,500
1,000
500
0 Figure 1.
2019 2020 2021 2022 2023 2024 2025 2026 Deployments and upgrades
of non-residential small cells,
Enterprise Urban Rural and remote
global, by environment
There are still considerable uncertainties in the market, so there

is significant variation between best case and worst-case forecasts.
Factors which affect this variation include the immaturity of 5G
platforms and business models; immaturity in industrial and IoT
business models; potential impact of the Covid-19 pandemic and
recession; uncertain timescales for operators to adopt key enablers
such as AI-enabled automation or cloud-native networks.
All of these factors may have a greater effect (positive or negative)

than currently anticipated, with a knock-on impact on the forecast.
The scenarios are also based on how quickly or slowly the industry
addresses the most important barriers to large-scale deployment
of small cell networks, as detailed in sections 3 and 4.

Lowering those barriers at the earliest possible stage is the
central purpose of Small Cell Forum, and Figure 2 indicates
the large number of deployments that are at stake.
In the best-case scenario, the uncertainties listed above will have the
minimum likely impact on operator confidence and on their pace and
scale of deployment, and the key barriers will have been addressed
as rapidly and effectively as possible. That would result in a CAGR of
18% and a cumulative total of almost 49 million radio units installed
by the end of 2026 – 11 million more than in the base forecast.
10,000
9,000
8,000
7,000
6,000
,000 RUs
5,000
16 million
4,000
(cumulative)
3,000
2,000
1,000 Figure 2.
Deployments and
0
2019 2020 2021 2022 2023 2024 2025 2026 upgrades of small cells in
all environments, global,
Best case Base case Worst case best and worst case
If the reverse proves true – uncertainties have a persistent impact and

barriers are slowly or inadequately addressed – the CAGR would be
10% and the cumulative total at the end of 2026 would be almost 33
million – 5.5 million fewer radio units installed than the base forecast
predicts. The downside in this forecast is less extreme than the upside
because some of the key barriers are being addressed already – for
instance, activity by many regulators to ease siting restrictions and
to open up shared spectrum have made stronger progress than we
expected a year ago, while enterprise and rural/remote deployments will
be boosted by many countries’ economic stimulus and 5G programs.
However, there is still a lot to lose, with a difference of 16 million

units between best and worst cases by the end of 2026 – a huge
figure which highlights why the work of SCF is so critical so
that the industry can take collective and united action to lower
barriers and respond to commercial drivers for densification.
Of course, 5G will be a significant driver of that densification. Many

of the deployment models that will be most important to justify the
investment in 5G will require dense zones of capacity, indoor and outdoor,
as well as ubiquitous coverage. This is true of many enterprise and IoT
use cases, as well as smart cities and transportation, not to mention
the ever-rising levels of mobile data consumption by consumers.

The pandemic may have driven a great deal of that usage indoors
onto wireline and Wi-Fi connections, but in general, there is a
rising trend for activities like gaming and video streaming to be
carried out on mobile devices, even when the user is stationary,
especially in public spaces like cafes, parks, venues or transport.
However, these patterns are not specific to 5G and are already clearly
seen in 4G. Deployment of 5G small cells will only overtake that of
4G in early 2024 (Figure 3). The current wave of investment in private
networks and city or enterprise small cells is mainly focused on 4G,
and those networks will have a multiyear life before they will be
replaced by 5G. For most operators, it is important to deploy flexible,
virtualized core and RAN platforms, with high levels of automation,
so that 5G can be easily introduced alongside existing networks.
7,000
6,000
5,000
,000 RUs
4,000
3,000
2,000
1,000
0
Figure 3. 2019 2020 2021 2022 2023 2024 2025 2026
Deployments and
upgrades of small cells 5G NR Non-standalone 5G NR Standalone
by radio technology LTE or 3G/4G 5G/4G combined BTS
Total 5G
08
In the total period from 2019 to 2026, 20% of the cumulative total will
be combined 4G/5G units and these will experience the highest CAGR
at over 90%. By 2026, 54% of the installed base will be 5G or 4G/5G
multimode, and 94% of new deployments will be 5G or 4G/5G.
In regional terms (Figure 4), current deployments of small cells, as

well as the start of 5G rollouts, are dominated by China and North
America. In 2019, China and south-east Asia accounted for 44% of
small cell deployments, followed by North America on 25%, with
Europe in a distant third place on 12%. By 2026, China and south-
east Asia will account for 36% of the cumulative installed base, and
North America for 19%, while Europe and south Asia (led by India)
will account for about 15% each. The highest CAGR will be seen in
south Asia (28%) closely followed by Middle East and Africa on 27%.
7,000
6,000
5,000
,000 RUs
4,000
3,000
2,000
1,000
Figure 4.
0
Deployments and upgrades
2019 2020 2021 2022 2023 2024 2025 2026
of small cells in all
NAM CALA Europe S Asia E Asia MEA environments, by region

2. Enterprise deployments and drivers
In the enterprise, the potential upside is high, if barriers are removed

quickly and the best-case forecast proves true. There is the opportunity
for the industry to deploy 25% more enterprise small cells in the
period from 2019 to 2026, in that case (the risk of the worst case
equates to 10% fewer than expected in the same period).
Many industry sectors are highly interested in cellular connectivity that is

optimized for their particular requirements, whether those relate to
enhanced reliability, security or responsiveness. That has the potential to
drive a rapid increase in deployment of small cells in many industries.
But many organizations are also keen to reduce their perceived risk by
relying on integration and support from a trusted partner or specialist
vertical industry service provider. And even more are keen to ensure that
cellular networks are fully under their control, in the same way as their
other connectivity. Those demands will change the shape of the value chain,
and if the maximum number of small cell networks are to be deployed, it
will be essential that barriers are removed to non-traditional operators,
including enterprise specialists (see Section 4).
Figure 5 shows that, in the base forecast, enterprise small cell deployments
will grow at a CAGR of 9% to reach almost 4 million in 2026, and a
cumulative total of 26.2 million. However, the best-case scenario would see
a CAGR of 13%, to reach 5.3 million radio unit deployments in 2026 and a
cumulative total of 32.8 million. In the worst case, the CAGR would be 7%,
and the cumulative total 23.7 million units. That equates to a difference of
over 9 million installations, depending on how effectively enterprise
requirements are satisfied and barriers removed.
6,000
5,000
4,000
,000 RUs
3,000
9 million
2,000 (cumulative)
1,000
Figure 5.
0 Deployments and upgrades
2019 2020 2021 2022 2023 2024 2025 2026
of enterprise and industrial
Base case Best case Worst case small cells, global, best
and worst case

Adoption of dense networks by enterprises will focus mainly on indoor
environments, or indoor/outdoor campus scenarios, in which cellular has
particular advantages over wireline or Wi-Fi alternatives as staff, visitors or
robots move between buildings. Retail parks, government centers,
universities and manufacturing complexes are examples of these kind of
environments and high demand will be seen in these verticals. In some cases
this will materialize at an early stage – the highest deployment numbers in
2019 to 2021 will be in retail, government, finance and entertainment venues.
In the later years, verticals with a greater reliance on 5G or emerging
technologies like edge computing and AI will start to gather momentum,
with transport and manufacturing particularly important (Figure 6).
Agriculture
Academic and education
Entertainment media arts and sport
Hospitality and catering
Manufacturing
Healthcare
Transport
Utilities and energy
Local government
Government
Retail
Finance
Figure 6. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Deployments and upgrades ,000 RUs
of enterprise and industrial
small cells by vertical market 2019 2020 2021 2022 2023 2024 2025 2026
The survey respondents were asked about their drivers and barriers to
deploy enterprise small cell networks, including the attitudes they were
seeing among target customer bases; the SCF survey was complemented by
insights from a separate study, by Rethink Technology Research, of about
100 enterprises.
As Figure 7 indicates, the main factors that will either accelerate or hold
back enterprise small cell deployment – depending on how these demands
and risks are addressed – are led by considerations of cost and ease of
operations.
A total of 42% of service providers say that lower opex costs than current
systems will be essential to their enterprise success. While capex only just
features as a top concern, operators say they need to be able to reassure
enterprises that the opex will be low and predictable, whether by offering
the small cell networks on an as-a-service basis with a fixed fee for all
management and analytics; by engaging in cost/risk sharing with the
enterprise (a top 10 issue in its own right); or by driving down the overall
total cost of ownership for a system that the enterprise buys outright.
Other cost-related issues in the top 10 include a clear overall return on

investment (ROI) case; and access to low cost or shared spectrum, to avoid
having to buy dedicated airwaves or to lease them from MNOs.
011
Most of the other factors relate to simplicity to deploy and run the systems:
• plug-and-play roll-out, which reduces cost and risk whether it

is being handled by the enterprise or the service provider;
• automated operations, or alternatively the ability to

outsource this to the service provider on an aaS basis;
• a simple migration path to 5G when that becomes desirable.
Many enterprises and specialist providers are increasingly interested in

support for open RAN architectures, as a way to access a broad supply
chain and innovation base, and to reduce cost through open, interoperable
systems.
And since many enterprises will already have WiFi installations, it will be
important not just to allow for integration and coexistence with those
networks, but to make it clear to industries how the addition of cellular will
provide greater value and capabilities. In some verticals, there are many sites
Figure 7. without any wireless connectivity, and cellular can be demonstrated to
Key factors that will support better functionality – ports, airports, factories and large venues are
accelerate or hold back examples. In other settings, the two networks will be complementary and
enterprise small cell there will be a case for both being deployed and managed by a common
deployment before 2023 integrator or service provider.
% placing in top 3
0 5 10 15 20 25 30 35 40 45
Lower opex costs

Plug-and-play deployment
Clearer ROI case
Automated or outsourced network operations
Clear framework for cost/risk sharing between operator…
Low cost or shared spectrum
Simple migration path to 5G
Support for open RAN architectures
Clearer differentiation from WiFi
Deep integration with WiFi
Lower capex equipment cost
012
3. Urban drivers
In the urban market, there are different drivers and barriers, resulting in a
different pattern of deployment. Urban small cell networks will be slower
to get to large scale, largely because of the need to involve many
stakeholders and convince them of a common benefit; the complexity of
siting and approval regulations; and the fact that the macro networks often
deliver ‘good enough’ performance outdoors, in a way they often do not
inside buildings.
The roll-out of a small cell layer to complement the macro network will be
driven partly by the need to fill gaps in coverage and urban canyons; or to
address hotspots of data demand; but also by emerging new applications and
services that will require excellent coverage and quality of service, from
smart city and public safety use cases to 5G-era transportation, augmented
reality services and immersive communication.
Figure 8 shows the difference between the best- and worst-case forecasts
for urban small cells. In the base case, urban densification will drive a CAGR
of 24% to reach deployment of 2.1 million radio units in 2026, and a
cumulative total in 2019-2026 of 11.1 million. There will be a sharp uptick in
deployment from mid-2022, which will only ease off somewhat in 2026
when the first wave of 4G and 5G densification will have been almost
completed in leading countries like China and North America.
Looking further ahead, there will be a second phase in the later 2020s,
driven by major large metro projects in emerging markets in parts of
sub-Saharan Africa and Asia, as well as second-tier city rollouts in India and
parts of Latin America.
3,500
3,000
2,500
,000 RUs
2,000
1,500
1,000
6.8 million
(cumulative)
500
Figure 8.
2019 2020 2021 2022 2023 2024 2025 2026 of public urban small cells,
global, best and worst case
Base case Best case Worst case

In the best-case scenario, the CAGR will be 31%, with the sharp increase in
deployment coming over a year earlier, in early 2021, enabled by earlier than
expected easing of regulatory and funding barriers. That would lead to total
cumulative installation of 15.1 million radio units by the end of 2026. That
would be 6.8 million units more than the worst-case scenario, which would
result in an installed base of 8.3 million, and a CAGR of 18%.
As in the enterprise space, then, the rewards of addressing market

requirements and demand quickly, by firming up the commercial and societal
proposition and lowering the barriers to at-scale deployment, are significant.
Figure 9 indicates the main factors that could accelerate deployment, if they
are addressed more quickly and effectively than we currently anticipate
- especially in 2020 to 2022, which would kickstart the best-case scenario.
But the same factors could similarly slow down adoption if they are not
addressed in a timely manner.
According to the service providers surveyed, the number one factor

influencing speed and scale of adoption is access to appropriate sites at an
affordable price. Just over half of respondents named this a top-three
consideration, and several other top 10 factors also relate to sites and
approvals. A standard process for equipment and site approvals is the third
most important factor, according to the survey, placed in the top three by 38%.
These regulatory issues also relate heavily to the second-placed accelerator/

barrier, the reduction of total cost of ownership (TCO), cited by 46%.
Despite progress in some markets – in some US states, for instance, and in Figure 9.
EU-wide policy – there is still too much complexity, bureaucracy and Key factors that will
fragmentation in city siting and deployment processes. This increases cost accelerate or hold back
and operators often have to follow different rules in each region or even deployment of urban
each city, making scalability very difficult. small cells before 2023
% placing in top 3
0 10 20 30 40 50 60
Access to affordable sites
Lower TCO
Standard process for approval
Automation across domains
Shared cost of deployment (with other operators or with city etc)
Clear smart city or industrial use business cases
Availability of 5G
Affordable backhaul
Outsourced network operations (e.g. neutral host, cloud)

Affordable or shared spectrum

However, operators recognize that reducing TCO is not all about regulation.
They are also prioritizing the adoption of changes that will help reduce cost
in other ways. Automation across all domains from radio units to backhaul
and core is seen as a critical enabler by almost one-third of service
providers, and affordable backhaul and spectrum also figure in the top 10,
though the need for shared spectrum is less prominent than in the
enterprise sector, where there will be a more rapid diversification of the
kind of companies deploying and running the networks (see Section 5).
As in the enterprise space, there is also an intensifying focus, compared to

previous surveys, on new ways of rolling out and running networks, so that
costs and risks are reduced for all stakeholders. Sharing costs and networks
with other operators or with the city itself is seen as a key enabler by 30%,
while 18% want to be able to outsource some operations, or the network
itself, to a neutral host or as-a-service provider.
015
4. Diversification of small cell deployers
The survey reflects an increasing diversity in the organizations which will

deploy, manage and monetize small cell networks. The core research base of
MNOs is supplemented by a rising number of non-traditional deployers of
mobile infrastructure, to recognize the fact that there will be a steady rise in
the number of small cells that are deployed and run by companies that were
not rolling out cellular networks before 2018.
By 2026, as many as 30% of the installed base of outdoor small cell

networks, and 71% of indoor enterprise systems, are likely to be
operated by new entrants to the cellular segment. Not all will be new
companies – there will be incomers from the cloud, WiFi, tower and
enterprise/private network spaces, among others. But there will also be
an increasingly rich soil for innovative new players, whether these are
neutral hosts, private network operators, city or enterprise specialists.
Some may be new owners of mobile spectrum; a larger number will

be harnessing new sources of shared or lightly licensed spectrum.
Some will deploy 5G from scratch, especially towards the end of the
forecast period; larger numbers will start with 4G densification.
In general, these deployments will be incremental, not substitutions

for roll-outs that would otherwise have been made by established
MNOs. Our estimate is that over three-quarters of the small cells
that will be deployed by non-traditional operators between 2020 and
2026 would not have been implemented at all had MNOs been the
only organizations able to build small cell networks. And increasingly,
those MNOs will leave behind former concerns about sharing active
infrastructure, and will see these new small cell networks as an
opportunity to extend their own reach and services cost-effectively.
In many cases the new operators will complement MNO business models
rather than competing directly. For instance, an MNO may find it difficult
to make a strong business case for an indoor or dense city deployment,
but will happily ride on a third party network so that its subscribers
have unbroken service when they venture inside or into a hotzone.
The biggest categories of alternative enterprise deployer are private

operators and neutral hosts. The former deploys and runs a network
specifically for an organization, sector or location, using shared or dedicated
spectrum, or leasing an MNO’s airwaves. The latter builds a small cell
network which can then support multiple service providers on a wholesale
basis (and those can include MNOs). Again, the spectrum may be shared
or leased, and some regulators, such as those in The Netherlands and
Ireland, are earmarking some 5G spectrum for wholesale activities.
Both these groups have multiple sub-categories, and specific business

models will vary in different verticals and countries. In both cases,
they may be deployed by a separate division of an MNO or telco;
and some conventional operators aim to support virtual private
or neutral host networks in future via 5G network slicing.
016
In the meantime, the growth of private cellular networks is
gathering pace now, starting in 4G, while a significant uptick is
expected on the back of enterprise 5G requirements, as well
as a leap in neutral host roll-outs around 2023-2024.
Figure 10 shows the growth in deployment of enterprise small cells by

non-traditional service providers, or by enterprises themselves. As well
as the categories outlined above, some enterprises will be served by a
‘heavy MVNO’ – a company which delivers most of its services via an
MVNO agreement with a main operator, but builds out some small
cells, sometimes with a private core and edge compute node, to extend
the edges of that virtual coverage into a specific enterprise location.
By 2026, private operators will have drawn level with MNOs in terms
of the installed base of cells they run, while they will still account for
25% of new deployments. From 2025, they will be overtaken by neutral
hosts in the pace of roll-out, and in 2026, neutral hosts will account for
30% of new deployments in that year, and 20% of the installed base.
4,500
4,000
3,500
3,000
,000 RUs
2,500
2,000
1,500
1,000
500
Figure 10.
0
Deployments and upgrades
2019 2020 2021 2022 2023 2024 2025 2026
of enterprise small cells
Private operator MNO Neutral host Heavy MVNO Enterprise direct by operator type
In the urban environment (Figure 11), conventional MNOs will remain the
dominant operators throughout the period, and will deploy at a CAGR of 22%.
Their growth will be outpaced by the other categories, especially the

neutral hosts, whose shared infrastructure model lends itself particularly
well to an environment where good sites can be in short supply, or complex
and expensive to arrange. Neutral hosts will deploy at a CAGR of 40%, and
by 2026, will account for 14% of new roll-outs and 12% of the installed base.
Meanwhile, private operators will account for 9% of the base, heavy MVNOs
for 6%, and the cities themselves for 3%. The MNOs will, however, still run
70% of the cells, on a standalone basis or with sharing deals between two or
more, to address the inefficiencies of having multiple networks deployed in
the same city areas.
017
2,500
2,000
1,500
,000 RUs
1,000
500
0 Figure 11.
2019 2020 2021 2022 2023 2024 2025 2026 Deployments and
upgrades of urban small
MNO Private operator Neutral host Heavy MVNO Enterprise or city
cells by deployer type
Regionally (Figure 12), Europe will drive the deployment of small cells by
non-MNOs at a far faster rate than overall densification. The particularly
challenging siting issues in this fragmented region will encourage neutral
host models, while many regulators have been active in opening up
spectrum for enterprise, industrial or shared use. While Europe will account
for 12% of the radio units deployed cumulatively in 2019 to 2026, it will
account for 20% of the non-MNO installed base.
East and south-east Asia will account for the largest numbers of non-MNO
small cells globally, but new models will be less dominant, partly because
they are quite rare in the biggest market, China. This region will account for
42% of non-MNO radio units, compared to 44% of the total base, while
South Asia - driven by India’s need to diversify the business model amid
intense pressures on MNOs – will deploy 12% of alternative cells in the
period, compared to 9% of the total.
1,800
1,600
1,400
1,200
,000 RUs
1,000
800
600
400
Figure 12.
200
Deployments and
0
upgrades of enterprise
2019 2020 2021 2022 2023 2024 2025 2026
small cells by alternative
deployers, by region NAM CALA Europe S Asia E Asia MEA

An emerging trend is to enhance the business case for deploying small cells
by integrating them with other capabilities such as a private, usually
virtualized packet core, and/or an edge computing node. This enables service
providers to create fully functioning, cloud-based and self-contained
networks for a discrete location such as an enterprise campus, metro area
or transport route. The combination of a core and an edge node means that
traffic, data processing and analytics can mainly be handled locally and
according to the rules and priorities of the enterprise, ensuring rapid
response in low latency applications as well as full control of security and
privacy. That allows the service provider to meet stringent SLA provisions
for some sectors, and to offer a wider range of services and added value
than with connectivity alone.
Of the service providers in the survey, which intend to support edge

computing along with small cells, the most common business driver was to
provide direct services to their subscribers by incorporating edge into the
public small cell network – for instance, improved video streaming quality
for consumers in a city hotzone, or rapid analytics response for business
customers. However, as Figure 13 shows, by 2026 there will be greater focus
on harnessing edge computing to enhance the proposition for private and
enterprise network models, or to support other service providers with
neutral host and edge-as-a-service options. Most importantly, a strong
infrastructure base combining edge cloud and connectivity can support
multiple models simultaneously, improving revenue and ROI – by 2026, 27%
will be supporting at least two business models.
100
90 Two or more models
80
% of suppoting SPs
70 Private enterprise model

60
50 Edge as-a-service
40
30 Support other SPs e.g. ind
MVNO
20
Direct services to subscribers
10
0
2020 2021 2022 2023 2024 2025 2026
The emergence of new demand for 5G edge services, especially in the Figure 13.
managed enterprise environment, will drive deployments (Figure 14), and a Key business models for
local core can further expand the services an operator can provide, with small cells + edge 2019-2026
local subscriber management and clear traffic prioritization according to (% of SPs supporting edge)
parameters set by the client.

By 2026, 75% of enterprise small cells are expected to be collocated and
coworking with either a private core, an edge node, or both, and deployment
of all three elements together will rise at a CAGR of 39% in the period (this
does not mean the three elements need to be in one physical unit, though
there will be a gathering trend to deploy the local, virtualized packet core
and RAN baseband on the edge node, using spare processing and storage
resources on the same node to support other services for the customer).
1,400 80
1,200 70
60
1,000
% of small cells
50
,000 RUs
800
40
600
30
400
20
200 10 Figure 14.
0 0 Deployments and
2020 2021 2022 2023 2024 2025 2026 upgrades of indoor and
enterprise small cells when
With private packet core With edge compute
colocated with private
With both % of total cells EPC and edge compute
Edge computing will be important in expanding the small cell business

model for a variety of deployers, but another key factor in enabling a
diversity of service providers is the opening up of spectrum. Many private
and neutral host networks will continue to rely on spectrum leased from
MNOs, and on MVNO agreements in order to achieve roaming and wide
area coverage.
However, for industries that have very specialized requirements, some

regulators and enterprises want their own dedicated spectrum so there is
no risk of a conflict of interests between their own connectivity priorities
and those of the operator. Regulators in Germany, the UK, The Netherlands,
Malaysia and others have allocated spectrum, in different ways, for industrial
use, while some sectors, such as public utilities and transport, already own
their own spectrum in many countries, and are lobbying to keep those
rights, or extend them (the US utilities sector is an example).
Many of the spectrum allocations made to industry are in middle bands or

millimeter wave bands, both well-suited to small cell deployment in localized
areas. This is also true of the trend to open up more spectrum on a shared
basis, with the USA’s CBRS scheme being a trailblazer. Such plans rely on a
Spectrum Access System (SAS) to prevent interference between different
users, and so provide better protection against poor QoS than fully
unlicensed bands such as 2.4 GHz.Various shared, dynamic or lightly
licensed spectrum plans are being implemented or considered round the
world, often with a view to lowering the barriers to extending connectivity
to underserved areas, to industries and to smaller businesses and operators.

As Figure 15 indicates, we expect shared spectrum to be a major driver of
small cell deployment, especially in the enterprise, opening the gates to a
wide range of deployers which could not afford to buy or even lease
spectrum on a static contract basis, but will be able to access spectrum for
low or no cost, or on a pay-as-you-go basis.
By 2026, shared spectrum will support 38% of the total installed base of
small cells across urban, rural and enterprise environments. Licensed
spectrum below 3 GHz will still account for the largest base, with 29% in
total, but new deployment in these bands will have been falling since 2021,
and at a CAGR for the whole period of (-20%). By contrast, CAGR in Figure 15.
deployment of radio units in shared bands will grow at 47% in bands between Deployments and
3 GHz and 5.9 GHz; 37% in bands from 6 GHz to 20 GHz, including the new upgrades of small cells
expansion bands in 6 GHz; and 69% above 20 GHz - in the millimeter wave in all environments,
bands where many regulators are encouraging flexible usage, especially for global by spectrum
enterprise applications, because of the plentiful airwaves on offer. band (primary band)
7,000
6,000
5,000
4,000
,000 RUs
3,000
2,000
Sub-3 GHz licensed Sub-3 GHz shared
3-6 GHz licensed 3-6 GHz shared
1,000
6-20 GHz licensed 6-20 GHz shared
Above 20 GHz licensed Above 20 GHz shared
0
2019 2020 2021 2022 2023 2024 2025 2026

5. Management and automation
As seen in previous sections, simple and efficient management, with

a high degree of automation, is seen as a critical enabler of at-scale
deployment of small cells, in a way that can support demands for
rising density and functionality, while also keeping costs down.
Management and automation is the focus of an important area of SCF

work, whose publications reflect some important trends, including:
• The need to harmonise management in order

to enable cross-domain automation
• Rising use of AI and machine learning in small

cell planning and management
• The need for very high precision in planning and

optimization, which can also be aided by AI/ML
• Planning for a multistage roadmap that evolves from existing

expertise in areas of automation such as SON, and evolves
to full orchestration of a cloud-native, end-to-end network,
while also integrating legacy and physical elements.
Together, these efforts will not only enable lower TCO and
increased scale, but will make it easier for service providers to
deliver new applications and to share resources flexibly.
Key drivers of investment in automation are often tied to the migration

to new architectures, including 5G (or 4G/5G multimode). As Figure Figure 16.
16 shows, more than half of operators believe automation of the small Level of importance
cell network is essential to achieving hyper-density, or a full end-to- of small cell network
end zero-touch system; about two-thirds think it is either essential automation to key operator
or valuable for implementing 5G, slicing or Cloud-RAN at scale. architectural changes
100
80
% of MNOs
60
40
20
0
Cloud-RAN Hyperdense Zero-touch 5G NR Network slicing Support VNF
networks networks orchestration
Essential Valuable Unimportant Don't know

And when asked about densification at any level, 36% thought automation
was critical or very important for 4G small cells, and 63% for 5G (Figure 17).
45
40
35
30
% of SPs
25
20
15
10
5
Figure 17.
0 Operators’ rating of the
Critical Very important Important Unimportant Don't know
importance of automation
4G 5G in densification
Figure 18 shows the expected pace of automation of small cell networks,

including the adoption of AI. This shows that, by 2026, almost all small cells
will be planned, optimized and managed by heavily automated systems
– 97% across 4G and 5G. That does not mean there will be no human
intervention at all, as some operators will continue to rely on some manual
processes for highly skilled decisions. However, these will increasingly
be supplemented or even replaced by AI/ML tools. By 2026, 84% of 5G
small cells will managed by systems that have some AI/ML component.
7,000 120
6,000 100
5,000
80
% automated
,000 RUs
4,000
60
3,000
40
2,000
Figure 18. 1,000 20

Deployments and 0 0
upgrades of automated 2019 2020 2021 2022 2023 2024 2025 2026
4G and 5G small cells, and
5G automated 4G automated
percentage automated,
including percentage with AI automation Total % automated
AI-enabled automation 5G % automated % 5G with AI automation

6. Architecture choices
Many of the decisions operators and enterprises need to make to facilitate

at-scale densification relate to commercial and regulatory issues rather
than technology. But that does not mean the technology has become
simple. Densification is often being accomplished hand-in-hand with other
significant network changes, such as virtualization of the core and RAN,
migration to cloud-native architectures, and adoption of disaggregated
networks, sometimes based on open RAN and core interfaces.
Figure 19 indicates that these migrations are at a very early stage for
commercial small cell networks, though many more operators have new
platforms in trial networks. When it comes to four of the potential new
small cell network architectures under consideration, there remains a
high degree of uncertainty about when, or whether, to start roll-out.
Almost 30% are unsure about timescales for a disaggregated small cell
RAN, 33% about virtualizing the baseband, 36% about when they might
go cloud-native in the small cell RAN, and 47% about the possibility of
having a small cell network hosted in a third party or public cloud.
However, over one-third of operators do expect to deploy disaggregated

and/or virtualized RAN before the end of 2023, while the other two
trends will gather more pace after 2023. By the end of 2025, 64% of
operators will have implemented cloud-native RAN, and over half will
have at least some small cell networks hosted in a third party cloud.
50
45
40
35
30
% of SPs
25
20
15
10
5
0
Figure 19.
Deployed 2020-2023 2024-2025 Later/don't know
Timescale to deploy small
Disaggregated RAN small cell vRAN small cell cell network architectures
Cloud-native RAN small cell Cloud-hosted small cell - % of service providers
All this is coupled with requirements for a greater diversity of small

cell form factors and mountings, to support a wide range of use
cases and physical environments. So there is intense pressure on
the vendors and supply chain to produce components, interfaces
and platforms that are uniform enough to ensure massive
scale, while flexible enough to allow for many architectural and
design options to be supported as requirements evolve.

This has made SCF’s work on 5G iterations of the FAPI interface, as well as
the split option 6 architecture for virtualized networks, more vital than ever.
The momentum behind fully open, interoperable networks is growing

among operators of all kinds, and is particularly strong among alternative
deployers in the enterprise sector – the open architectures promise the
kind of improved TCO and service flexibility that is needed in the rapidly
evolving enterprise market, and new entrants are in a good position to
adopt a new platform at an early stage since they have no legacy to manage.
The interoperability will be enabled by open interfaces between

network elements – between radio units and distributed or centralized
baseband units; between RAN and core; between different base
stations the same network, including 4G and 5G coexistence; between
virtualized and physical elements. SCF is making a significant contribution
to the push for open interfaces in every part of the network.
Deployment of small cells based on open interfaces such as those defined

by SCF will see significant acceleration after 2022, as architectures mature,
commercial equipment reaches scale and operators choose the most
appropriate standards for particular use cases or deployments. The CAGR
in deployment of small cells based on open interfaces will be 150% in 2020
to 2026 and will be led by alternative operators, as Figure 20 shows.
100
90
80
70
60
% of RUs
50
40
30
20
10
Figure 20. 0
Percentage of deployments 2020 2021 2022 2023 2024 2025 2026
of small cells based on
One or more MNOs or telcos Wholesaler/neutral host
open architectures,
by deployer type Private/vertical operator Enterprise
One of the key decisions is the disaggregated architecture to choose – to

stick with an integrated small cell, to have a one-split design with a radio
unit separated from a single baseband unit; or a two-split design with a
radio unit, and the baseband functions divided between a distributed unit
and centralized unit. There are many variations in how these three units are
located and combined on cloud infrastructure, and most operators are still
considering their options. However, one thing is clear – different scenarios
will require different architectural approaches, depending on specific
requirements of latency, coverage, power efficiency and so on, and most
operators will adopt more than one architecture for different scenarios.

Figure 21 shows that, of the many functional splits on offer, a single
split based on Option 6 (as supported by SCF’s specifications) is the
most popular choice in indoor enterprise and in private industrial
environments, while the emerging two-split options are gaining
ground initially in campus and dense urban small cell hotzones.
100
90
Other
80
70
All two-splits
60
% of SPs
50
One split O7
40
30 One split O6
20 Figure 21.
Percentage of small cell
10 Integrated
service providers planning
0 to deploy each architecture
Indoor Private Campus Dense Rural public
before 2025, by environment
enterprise industrial urban
In the enterprise and industrial environments (Figure 22), there will be

a gradual decline in new deployments of integrated small cells, though
they will continue to be important for smaller premises and certain
use cases. The biggest growth will be in the two-split, three-unit RAN
architectures, which will have a CAGR of 61%, though heavily weighted
to the period from 2023. By 2026, they will account for 32% of new
radio unit deployments and 19% of the enterprise installed base. They
will be displacing traditional DAS (distributed antenna systems) to some
extent, especially from 2024, though DAS and integrated small cells will
still have the largest shares of the total installed base in 2026 (29% and
31% of radio units respectively), thanks to fairly long upgrade cycles.
4,500
4,000
3,500
3,000
,000 RUs
2,500
2,000
1,500
1,000
Figure 22.
0 of indoor, enterprise
2019 2020 2021 2022 2023 2024 2025 2026 and industrial small
cells by architecture
All-in-one Two-unit Three-unit DAS

Conclusion
This year’s Market Status report and forecast shows that small
cell networks are at a critical juncture. Rising demand for new
cellular services and use cases, especially in enterprise and industrial
sectors, will deliver opportunities for many new deployment
scenarios, often supported by new types of service providers.
There are important emerging enablers of this growth, such as

shared spectrum, open interfaces and automation, and all these key
enablers are being actively developed and promoted by SCF work
items. However, there are still risks which could reduce the expected
levels of roll-out – some well-known to the small cell industry, such
as siting and regulatory barriers; some new, such as uncertainty
about emerging but immature architectures and business models.
SCF’s work program for the year ahead will focus on lowering
the barriers, increasing confidence and enabling the new use
cases and business opportunities, with the goal of seeing an even
more positive outlook for the industry in next year’s report.

About the survey
The SCF Market Status report is based on surveys and forecasts

conducted by Rethink Technology Research on a twice-yearly basis.
The most recent survey attracted response from

98 organizations. These conprised:
• 68 mobile-only or fixed/mobile operators, in

tiers 1 and 2, from a global base.
• 32 other organizations planning or deploying cellular

networks including neutral host providers, private
network operators, cable and fixed-line operators.
The respondents are members of an opt-in panel which Rethink has

been recruiting since 2004 to study many aspects of cellular network
deployment and business case. All respondents are pre-qualified and
typically have senior executive roles in the networks or CTO functions.
The survey included questions about:
• Current deployment of small cell networks
• Estimated deployment of small cell networks

by year, over the coming five years
• Breakdown of those deployments by spectrum band; radio

technology; indoor/outdoor; public/private; architecture
• Current and planned deployment of edge compute

nodes, collocated with small cells
• Business model for deployment (e.g. densification of

macro network, enterprise network, neutral host)
• Drivers and barriers to deployment – what factors would

accelerate or delay their planned deployment plans, or
encourage them to deploy small cells for the first time?

All responses are provided with guarantee of anonymity but
responses are analysed by region, operator type etc.
The responses provide key inputs to Rethink’s proprietary

forecast model. This also includes other data and
metrics which will affect the forecast, such as:
• past history of actual deployment (9 years’ history)

• expected availability of different kinds of spectrum by region
• expected regulatory and other government decisions by region

• expected availability of new technologies and standards
• vendor expectations for adoption patterns etc
Depending on whether these developments occur earlier or later

than expected, (or not at all), best and worst case scenarios are
identified in terms of quantity and timing of deployments.
In the most recent survey, the survey identified the top 10 enablers
which operators believe would accelerate their plans if implemented.
These have been included in the model to identify a best case (if
all the key enablers are implemented in the short term), and a
worst case (if none of them is implemented in the short term).

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DOCUMENT

SCF market status report

1. Overview and forecast 6

2. Enterprise deployments and drivers 10

4. Diversification of small cell deployers 16

5. Management and automation 21

About the survey 27

DOCUMENT 050.10.4 | SCF market status report | July 2020 2

DOCUMENT 050.10.4 | SCF market status report | July 2020 3

Each year, Small Cell Forum publishes a Market Status report,

The core data source, as always, was a survey of about 100

Other questions are added or changed, based on input from Forum

Diversification makes SCF’s work more vital than ever

Diversity is also seen in the organizations deploying and monetizing

DOCUMENT 050.10.4 | SCF market status report | July 2020 4

Finally, there is diversification of architecture. Small Cell Forum has

DOCUMENT 050.10.4 | SCF market status report | July 2020 5

Our top-line global forecast for deployment and upgrade of small

There are still considerable uncertainties in the market, so there

All of these factors may have a greater effect (positive or negative)

DOCUMENT 050.10.4 | SCF market status report | July 2020 6

If the reverse proves true – uncertainties have a persistent impact and

However, there is still a lot to lose, with a difference of 16 million

Of course, 5G will be a significant driver of that densification. Many

DOCUMENT 050.10.4 | SCF market status report | July 2020 7

In regional terms (Figure 4), current deployments of small cells, as

DOCUMENT 050.10.4 | SCF market status report | July 2020 9

In the enterprise, the potential upside is high, if barriers are removed

Many industry sectors are highly interested in cellular connectivity that is

DOCUMENT 050.10.4 | SCF market status report | July 2020 10

Figure 6. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Other cost-related issues in the top 10 include a clear overall return on

• plug-and-play roll-out, which reduces cost and risk whether it

• automated operations, or alternatively the ability to

• a simple migration path to 5G when that becomes desirable.

Many enterprises and specialist providers are increasingly interested in

Lower opex costs

DOCUMENT 050.10.4 | SCF market status report | July 2020 13

As in the enterprise space, then, the rewards of addressing market

According to the service providers surveyed, the number one factor

These regulatory issues also relate heavily to the second-placed accelerator/

Access to aﬀordable sites

Standard process for approval

Automation across domains

Shared cost of deployment (with other operators or with city etc)

Clear smart city or industrial use business cases

Outsourced network operations (e.g. neutral host, cloud)

DOCUMENT 050.10.4 | SCF market status report | July 2020 14

As in the enterprise space, there is also an intensifying focus, compared to

The survey reflects an increasing diversity in the organizations which will

By 2026, as many as 30% of the installed base of outdoor small cell

Some may be new owners of mobile spectrum; a larger number will

In general, these deployments will be incremental, not substitutions

The biggest categories of alternative enterprise deployer are private

Both these groups have multiple sub-categories, and specific business

Figure 10 shows the growth in deployment of enterprise small cells by

Their growth will be outpaced by the other categories, especially the

DOCUMENT 050.10.4 | SCF market status report | July 2020 18

Of the service providers in the survey, which intend to support edge

70 Private enterprise model

DOCUMENT 050.10.4 | SCF market status report | July 2020 18

Edge computing will be important in expanding the small cell business

However, for industries that have very specialized requirements, some

1. Overview and forecast 6

2. Enterprise deployments and drivers 10

4. Diversification of small cell deployers 16

5. Management and automation 21

About the survey 27