Summary Bullets:
• Many of the newest small-cell products are radio units, coinciding with larger trends around C-RAN and 5G
• This trend poses challenges for the consolidating RAN-vendor landscape and could create opportunity for outsiders
Small cells, C-RAN and 5G are some of the most talked-about topics in mobile access infrastructure today, but how do they intersect? For starters, here’s one way:
Many of the most recently introduced small-cell products are actually radio units (RUs) that connect externally to baseband units (BBUs) rather than the all-in-one base stations (with BBU and RU in one box). Nokia, for example, announced its 2×5 W Metro RRH 2100 MHz in late 2014. Ericsson included the Micro Radio 2203 as part of the new Ericsson Radio System portfolio it unveiled in Q1 2015. ZTE introduced its R8402 “Pad RRU” around the same time. More recently, Huawei began promoting its 5 kg “Book RRU.”
(Note: It’s fair to ask, “What makes these ‘small-cell products?’” Granted, defining small cells can be tricky. But some of the primary defining characteristics are low power output and small form factor, both of which apply to all the above-mentioned products.)
These products — sometimes called micro-RUs — can satisfy part of the need for densification that drives small cells but aren’t burdened by the same feature parity or coordination challenges facing standalone small cells. Their proliferation in vendors’ small-cell portfolios isn’t shocking, as distributed architectures are already a major part of efforts to penetrate the enterprise small-cell space (see Ericsson’s Radio Dot System, Nokia’s FlexiZone Controller, Huawei’s LampSite, SpiderCloud’s E-RAN and ZTE’s Q Cell).
From a broader perspective, the rise of micro-RUs also reflects a more fundamental long-term shift toward C-RAN architectures. That shift could accelerate as vendors engineer ways to broaden C-RAN’s applicability beyond the traditional barrier of fiber scarcity. It could accelerate further as operators and vendors think about accommodating 5G technologies and use cases that require the advanced intelligence of centralized, coordinated processing units.
But in the near term, this trend has implications for the vendor landscape. As vendors bring more RUs to market, they add a lot of diversity to RAN portfolios, with a range of form factors and mounting options to meet a wide variety of siting scenarios and coverage needs. Maintaining this diversity can be somewhat challenging for vendors that are trying to keep their profit margins up. Especially as RAN vendors consolidate – and the top five RAN vendors become a foursome – they want as much scale as possible, which means similar products shipped in high volumes are preferable to very diverse portfolios that cover a wide range of potential needs. This dynamic creates opportunity for third-party vendors to sell to the top vendors; and because this opportunity is tangential to both the antenna and small-cell spaces, the crowd that could benefit includes folks from CommScope and Kathrein to SpiderCloud and Airvana. Such vendors could aim to get in on the ground floor of today’s small-cell space and be well-positioned for future C-RAN and 5G opportunities as well.