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Small cells: on the rise in Middle East and North Africa

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Category: Business models, Metrocells, Small cells


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Small Cells MENA 2012

David Swift speaks to Pierre Chaume, Alcatel Lucent Vice President Middle East, about how small cells are helping operators meet ever-increasing demand for extended coverage and greater capacity across the MENA region

The Middle East and North Africa region is currently a hotbed of mobile device penetration experiencing massive demand for mobile broadband in both urban and remote locations – and small cells are helping to meet that demand. David Swift spoke with Pierre Chaume, Alcatel Lucent Vice President for the Middle East region, on his thoughts about the market now and in the future.

David Swift: How do you anticipate subscriber demand in MENA growing in the next 12 months?

Pierre Chaume: Mobile penetration in MENA and in the Middle-East in particular is over 100%. With more high end subscribers, small cells will be very attractive and I expect demand will certainly grow for small cells in the home and office driven by the fact that the price of small cells, particularly for the home, is declining. I believe that they will drop further due to economies of scale. So it will make it much easier for subscribers to afford an initial investment than to wait for the eventual deployment of macro cells in their neighbourhood to gain the coverage they require. I expect demand for data on wireless networks will grow very quickly as well which will make operators further consider deployment of metro cells in their networks. Demand for data and providing greater network capacity will be key drivers in the uptake of small cells looking ahead.

DS: What are the main drivers for small cell deployments in MENA?

PC: There are interesting statistics that show smartphone penetration in different economies in the world – in the UK 51%, France 30%, US 50%. You may be surprised to hear that in the UAE and Saudi the penetration is in excess of 60%. So I believe the first main driver for small cell deployments is smartphone penetration and the success of smartphones. Smartphones are high bandwidth consuming.

The second driver I believe is Average Revenue Per User, or ARPU. Higher ARPU means that users have more diverse usage of their smartphones, using them not only for voice, but for data and applications. Given this, subscribers in our region are looking, of course, for top end quality of services and coverage. Small cells deliver quality of experience, coverage and capacity and I believe that we experience good market traction for small cells in the Gulf region driven by the behaviour of high ARPU users using smartphones.

Furthermore, MENA is a competitive market. So the operators need to differentiate themselves. Small cells are the perfect way to differentiate and offer a solution in order to cope with the new behaviour of smartphone usage, which is extremely high data; on the move, in houses, in offices, in their own enterprise.

DS: Alcatel Lucent is driving Metro Cell deployments across Dubai, set to go live shortly – what new opportunities are you expecting this to bring to the region?

PC: There are plenty of opportunities, firstly linked to the evolution of wireless networks. What is important is that we are starting to mix macro cells with small cells in heterogeneous networks. This implies an interaction between both kinds of networks which will inherently create opportunities to support operators in ensuring full working between the macro and metro layer, while having a massive deployment of the third generation of wireless access. And we will start to see several deployments of 4G and LTE. I would expect a lot of opportunities, both in the small cell areas and in the macro cell areas, along with the services these kinds of deployments will require.

Talking about the quality of experience and quality of services, we offer powerful tools which are linked to Customer Premises Equipment (CPE) management, home device management, and mobile device management. More and more of these kinds of solutions will be required and so this is another area of opportunity for us.

DS: What have been the biggest obstacles to building a small cell infrastructure in the Middle East?

PC: I think there are three areas. From a small cell for the home perspective, one obstacle is the way the service provider will set its marketing campaign. The way it is going to market the small cells, the pricing, the initial fees, I think still here we have an area of work to support our customers in setting up and launching their small cells offering to market to drive continued adoption.

The second one I would say relates more to metro cell deployments, but is still relevant for small cells for home and office as well. There are countries in MENA where fixed broadband is not yet so well developed. You still have areas of development for fibre, DSL, new technologies around DSL and other forms of fixed broadband connectivity to be able to provide backhaul for small cells. As you may know in the UAE, fibre and fibre to the home is very well developed. But in other areas there is still a gap. So this must be an area of focus for us. Once we have numerous fixed broadband networks and options we will be better able to backhaul the small cells both in the home and in public spaces, which is critical to drive successful metro cell deployments. Backhaul is a significant challenge.

Finally, worth mentioning, but which is more a challenge of having continuous networks is deploying successfully together the macro layer and the small cell, really the metro cell, layer. Metro cell deployments pose many questions for our customers, “where should metro cells be deployed?”, “what is the best architecture?”, “how can thousands of metro cells be installed quickly?”…that’s where the Metro Cell Express solution comes in – a comprehensive solution designed to support our customers in overcoming obstacles expected with large metro cell deployments.

 

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